Pensions
How many of us ever make a conscious effort to spend time considering and planning our retirement? When it’s often deemed an issue that will affect us only in the distant future, it is easy to relegate the topic to the ‘back burner’ and spend our energies coping with our all-too-often frenetic working conditions, our families and fitting both into busy social lives.
Yet, providing for retirement is a significant consideration and one we all need to take a long honest look at because it affects not only ourselves but our families too. Deciding when we can afford to retire, yet maintain a particular lifestyle, requires careful planning.
We must begin saving for retirement, even if we are just starting at work. Regular contributions now will mean more opportunities to secure the continuation or improvement of our lifestyle when we start to ‘draw down’. The longer we contribute, the easier it will be.
Very few of us know the capital amount we will need at retirement. We may already know what we would like to do when we retire or even have a vague ‘bucket’ list: our homes are paid for; we may want to travel widely; take care of our children and grandchildren; concentrate on the hobbies we haven’t had time for while working… How much will all this cost? How much will we need coming in each month, each year?
This, of course, is where professional financial planning comes in. We need help to ascertain our personal pension situation as it stands now, what the shortfall is and what we need to save to achieve our ‘game plan’.
Hard facts from the UK
At 65 the average man can currently expect to live another 18 years in retirement, according to the Office for National Statistics.
At 65, the average woman can expect to live another 21 years in retirement. By 2022 there will be more people over 80 than there are children under five.
Those between the ages of 25 and 44 are saving only about one-third of the amount they need to be to support their current lifestyles into retirement.
There are a variety of perceived barriers to saving for retirement, including a strong sense of wanting to ‘live for today, competing demands on income and a poor understanding of the available pension options. This is especially true of the young (source: Department of Work & Pensions research report).
Around 50% of working women do not have a company pension plan. Only 20% of women will receive an adequate pension when they retire.
If you already have a UK pension, do you know where your money is invested and how it performs? Will it be enough for your retirement?
A Globaleye pensions specialist will be able to answer these questions for you and help you work towards peace of mind for the future.
Pension Transfers For British Ex-Pats
SIPP (Self-Invested Personal Pension)
A SIPP is a personal pension plan that works like other personal or stakeholder pensions in terms of tax benefits, contribution limits and retirement options, but with a better choice of investments. A SIPP is also a way of amalgamating old pensions into one pot.
- Benefit from a broad spectrum of investment options creating more significant flexibility Benefit from a phased retirement
- Move your SIPP to another jurisdiction using a QROPS plan if you retire abroad and never return to the UK.
- Before taking a lump sum, taking an income or buying an annuity, the fund is free of Inheritance Tax (IHT) to beneficiaries.
Tax Implications
Tax penalties do apply if you return to the UK within five years, and the Trustees of the QROPS must continue to report to HMRC for ten full tax years after the transfer.
However, if you leave your pension in the UK in a SIPP for example, you will pay your highest marginal income tax rate on the income taken
– wherever you are in the world. Once you have drawn the fund down or even if you only take the tax-free lump sum, then, if you were to die after this period but before you have purchased an annuity, HMRC will tax the balance of the fund by 55% if your next of kin want to receive the whole fund back as a lump sum.
Your next of kin has other options, including purchasing an annuity. Still, it would always be wise for them to seek financial advice before deciding the best way forward for their circumstances.
International Private Pensions
We have talked predominantly about British ex-pat pensions so far. Still, Sameer Alam also works with clients worldwide, offering a suite of international private pension solutions to complement the client’s home country’s government contributions.
Government pensions worldwide invariably fall short of even current income levels, let alone provide for retirement, leaving most people unable to stop working.
YOUR NEXT MOVE…
Sameer Alam consistently delivers unbiased and professionally tailored pension solutions, providing clients with the best advice at all levels. Contact us for a bespoke service with one of our highly qualified international pension specialists and find a way to significantly grow your pension pot.
Sameer Alam has the tools, expertise and advice to ensure you are heading towards a well-funded and happy retirement. Just pick up the phone or email us now.
The advice we provide in this guide is free and without obligation.
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