A Detailed Look At International Pension Plan Benefits

Overseas pension

Last updated 02 May 2019

 

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What You Must Know About International Pension Plans

An international pension plan is a retirement planthat can be availed in another country or jurisdiction outside of UK. The UK government will recognize this scheme if it is regulated and recognized for tax purposes in the country or jurisdiction where it is established.

For the past decade, more than 5 million UK residents have chosen to accept overseas employment opportunities or have decided to move abroad for various reasons. Getting an overseas pension can be beneficial and can prove to be a good opportunity to invest in tax free jurisdictions thereby maximising benefits. Read our guide how to choose the best QROPS jurisdiction.

Who Is Eligible For An Overseas Retirement Plan

  • UK citizens that are planning to move abroad permanently
  • UK citizens with one or several UK schemes who want to minimize annual fees
  • UK citizens that are employed in an international company

Don’t miss our article about Pension Entitlement And Drawdown. It will help you make the right move with your pension scheme.

What Are The Benefits Of An Overseas Plan

  • Tax-free inheritance to your beneficiaries upon your death
  • No more annuities to buy
  • Minimal bank fees and charges
  • High fixed deposit rates unlike what you are currently getting from your provider
  • Easy access to offshore funds in any currency you like
  • Freedom to take a 25% lumpsum payment or a regular periodic income for the rest of your life
  • Flexibility in terms of investing your funds to any business ventures you like for maximum growth potential of your money

Despite the huge benefits of an overseas plan, you should be aware that different countries and jurisdictions have different rules about wealth tax and other related costs. Make sure you have researched about this before taking an overseas scheme.

Overseas Plans Vs Annuity

Annuities are not always the most efficient financial vehicle, and with the recession driving the economy weaker, it is not a good idea to just give your money (as capital) to an annuity provider and hope that the interest rates would go up. Find Out More About A UK Pension.

Of course, if this is what will determine the worth of your fund, chances are it will not be enough to guarantee you security and comfort in your old age.With an annuity, you cannot have any control to your funds because the financial institution where you have invested it to will re-invest it in schemes they see fit. Of course, there are pros and cons in getting an annuity but why risk your money when you know that it can grow faster and bigger in an overseas plan?

Here’s why you should choose to move your assets to another jurisdiction. Moving from one country to another for a new job or business venture is a big responsibility, but having to pay high taxes and other charges for your UK pension is another thing. Getting an international pension plan will ensure that you can maximize your benefits and ensure that your beneficiaries will benefit from all your assets and savings in case of an untimely death.

You can have total control over your funds through an offshore scheme that is right for your specific lifestyle and financial requirements. Find an overseas pension that will bring the highest compound interest to your money. Did you know about the advantages of Expat Pension?

An offshore plan is the best financial decision for a UK resident who plans to live abroad permanently. It provides attractive benefits that conventional plans in the UK cannot offer. Read on to find out more about this type of scheme.

If you are planning to move and leave the UK to settle abroad, then it is time for you to get an international pension plan. It is ideal for anyone with a UK pension. You can transfer your UK retirement plan to an offshore scheme and let your investments grow. Make sure to read our detailed article with all the information you need to know about Pension Transfer.

What Are The Benefits Of An Offshore Plan

Anyone with a UK pension can transfer to an offshore scheme and benefit from great money management and returns. We’ve prepared in depth guide on how to find the Best Pension for you.

It Gives Total Freedom For Investment

Conventional UK-based plans have a lot of restrictions imposed over plan holders in terms of managing their funds. With an offshore plan, your funds can be transferred to tax free offshore jurisdictions where you can get better benefits. You have the choice of deciding what to invest your money in.

It Frees Your Beneficiaries From Any Tax Burdens

The least your loved ones will want to deal with when you pass away are taxes, whether inheritance tax or income tax. When you transfer to your funds into an offshore plan, they won’t have to worry about that anymore.

It Provides Many Tax Exemptions

Once you have been a permanent resident of another country for five years, you won’t have to pay any kind of HMRC-imposed taxes when you transfer your funds into an offshore plan.

It Allows You To Avoid Getting An Annuity

Annuities gained negative perceptions because it restricts the plan holders from accessing their funds until the due time stated in the plan. When you invest in an offshore scheme, you don’t have to get an annuity especially if you like the idea of using your funds for investments.

It Lets You Gain Access Yo Your Funds In Any Kind Of Currency

It is important for business-savvy individuals to hold assets and funds in different currencies due to unstable exchange rates for the past several years. Make sure your offshore scheme can hold a mix of British Pound, Euros, US Dollars, and other currencies. Find Out More About UK Pensions.

What Are My Investment Options

One of the strongest aspects of an international pension plan is the holder’s freedom to be involved in different asset classes and investment portfolios such as the following:

  • Bank accounts
  • Commercial property
  • Government securities stock
  • Life company offshore bonds
  • Traded endowment policies
  • Unit trusts, exchange traded funds, and investment trusts
  • Stocks and shares
  • Insurance funds
  • National savings products
  • UK agricultural land
  • Forestry and green properties
  • Real Estate Investment Trust (REIT)
  • Land areas in big holiday resorts abroad

Costs Involved In Setting Up An International Pension Plan

The costs for setting up an offshore plan will fall into three basic categories.

  • Formation Fee. What you pay for management and maintenance of your funds
  • Annual Management Charge. What you pay for the continuous investment of your funds
  • Advisery Fees. What you pay to financial advisers handling your funds

If you find this article helpful, make sure to check also our article about Offshore Pension Scheme.

An international pension fund works like any other UK pension scheme in terms of contribution payments, annual limits, and qualifications but it is a more suitable option for anyone with a UK pension because of its attractive benefits.

Saving Up For An International Pension Plan

Saving up for an offshore fund is the best financial decision a person can make in order to maximize the growth potential of his/her money.

Because of the growing number of overseas employment opportunities, many UK residents are drawn to working and living abroad in order to provide a better life for their loved ones and secure their retirement as well.

Because of this, it becomes impractical to settle with what conventional providers offer in the UK. Make sure that the international pension plan you are choosing is HMRC-regulated. It should also be recognised in the country or jurisdiction where it is offered for tax purposes.

What Are The Reasons For Building Up An IPF

You can transfer your UK fund to an international pension plan through a QROPS or QNUPS transfer scheme. It is right for you if:

  • You hold a UK pension
  • You have plans to live outside of UK permanently
  • Your job demands you to move from one country to another
  • You want to consolidate your UK accounts into one scheme
  • You want to reduce your annual fees and bank charges

Have you ever asked yourself if Self Invested Personal Pension (SIPP) may be right for you?

What Are The Reasons For Building Up An IPF

You can transfer your UK fund to an international pension plan through a QROPS or QNUPS transfer scheme. It is right for you if:

  • You hold a UK pension
  • You have plans to live outside of UK permanently
  • Your job demands you to move from one country to another
  • You want to consolidate your UK accounts into one scheme
  • You want to reduce your annual fees and bank charges

Have you ever asked yourself if Self Invested Personal Pension (SIPP) may be right for you?

Benefits Of An International Pension Plan

  • Reduced bank charges and annual fees
  • Tax-free pension fund for your beneficiaries
  • No need to purchase an annuity
  • High fixed deposit rates
  • Easy access to your money in any currency that you need
  • Your choice to take a lump sum payment or a monthly income upon retirement
  • More control over the management and use of your funds for business transactions and investment opportunities

This type of pension scheme provides huge benefits and is ideal for anyone with a UK pension. However, you have to be aware of the different rules and tax requirements that different countries create. You have to weigh your overall maintenance costs and tax-related fees for this type of scheme against your projected profit and interest. Make sure to check our article about HMRC And HRMC schemes. It will help you make an informed decision about your pension plans.

What You Should Do

The demanding needs of your overseas business or employment opportunities are enough to keep you busy all the time. Dealing with taxes, absurd charges and low performance of your current plans should be the least of your worry. If you want to gain more control over the way your money is going, save in an international pension plan. This is one of the best options to ensure that you will have a comfortable life during retirement.

Contact us and talk to our reputed financial adviser and find an offshore scheme that will satisfy your specific business requirements and lifestyle goals. If you find this article useful, make sure to read more about the advantages of Foreign Pension.

Foreign retirement plans do not function differently from other forms of UK schemes in the market today. It is also a means of saving up for your future so you can rely on a comfortable and regular monthly income during your retirement years. A foreign pension scheme is established outside the UK and recognized by the government. We’ve prepared a detailed article with all you need to know about HMRC And HRMC Pension Schemes.

Rules Concerning Foreign Retirement Plans

  • It should be regulated in the country or jurisdiction where it is established
  • It should be recognized for the purpose of tax-related transactions in the country or jurisdiction where it is established

Make sure to read about the new pension rules and minimum pension.

Are You Eligible For A Foreign Plan?

  • If you are a previous residence in the UK but now live and work in another country
  • If you are a UK citizen who keeps one or several UK schemes but wants to consolidate your funds into one account
  • If you work as an internationally mobile employee
  • If you have no plans of going back to the UK to live there

Benefits Of A Foreign Plan

Foreign plans allow you to benefit from these:

  • Not paying anything to the HMRC upon death
  • Not being forced to purchase any kind of annuity
  • Minimizing taxes on your funds or enjoying tax-free funds (depending on country or jurisdiction) taxes and bank fees
  • Getting lower bank fees and annual costs
  • Getting higher fixed deposit rates than what is offered by your current provider
  • Getting easier access to your offshore funds
  • Having the freedom to get a 25% lump sum or a regular monthly income
  • Having the freedom to take your fund to any currency of your choice

Rules Concerning Funds Transferred To Foreign Pensions

  • The UK Basic State Pension cannot be transferred into foreign plans
  • The funds will undergo a “benefit crystallisation event” where it will be tested against the lifetime allowance of the plan holder
  • Your current scheme should be duly recognized by HMRC as being established in any member state of EU
  • Funds from foreign plans cannot be accessed until the retirement age (55 years old)
  • You are required to put in at least 30% of your estimated fund value if you declare that you might take an initial lump sum payment upon retirement
  • At least 70 per cent of the fund will be paid out to you as a regular monthly income
  • If you are resident of another country or jurisdiction for less than five years, you must fulfil your required reporting duties to HMRC

Find Out More About UK Pensions. You can talk to our reputed financial adviser who knows the pros and cons of each international pension plan.

If you have significant investment portfolio you need to protect, getting an offshore plan is one of the best financial decisions you can make. Here are some more facts about overseas schemes. Choose a jurisdiction where your assets can match your specific business requirements. Having a professional on your side can be a relief especially when you are faced with a decision that can enable you to gain more benefits with your retirement scheme.

If you find this article useful make sure to check our detailed guide on Pension Transfer. It will help you with your future plans.

John Lawson

John Lawson

John advises business, individuals, and organisations on pension planning. As you’ve probably realised by now, we’re invested in helping people like yourself understand a little bit more about how equity release options work.

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