Exploring your pension options when moving abroad
The amount of British people choosing to spend their retirements abroad is increasing year on year. People are escaping to places all across Europe and even further afield in a bid to find the sun and simply relax, but it?s a huge decision to pack up your entire life and start over again in a brand new country. Once you?ve made the choice to pack up your life and go overseas it?s down to you to make sure that all business you?ll be leaving behind is dealt with, and that means organising any pensions that you may have invested in over the years.
Which option is best for you?
While you could just leave your pension exactly where it is, heading abroad expands your options greatly and you?ll find that there are two routes that hold the most potential; SIPPS and QROPS. Both schemes have their advantages but by consulting with your financial adviser, you?ll soon see that they will benefit you greatly as a non-UK resident. There are a few factors that you should consider before making your decision as to which plan to invest in, so be sure that you always have the most up to date information at hand.
SIPPS, also known as Self Invested Personal Pensions, are the kind of scheme you want to go for if you like to take an active role in your finances and keep in touch with what your money is up to. You decide where your investments are made and will be responsible for making sure that the costs and taxes are met. Building a SIPP gives you access to a huge variety of different savings opportunities, and once you reach your mid-fifties, you?ll be able to pull out a lump sum of up to 25% as well as knowing that you?ve got a decent, regular income.
Will QROPS work better for you?
Qualifying Recognised Overseas Pension Schemes (also called QROPS) work in a different way to SIPPS. Even though you?re paying into a scheme that is essentially subject to British law, the investments that have been made on your behalf will eventually become subject to the tax laws of where you have chosen to move to. Again, you?re allowed to draw a large sum on retirement, but you should also be aware that the annual running costs of QROPS are significantly higher than the alternative.
No matter what scheme you select, just make sure to consult with a professional before you make a final judgment. Once you?ve made your choice, investigate all the options that are open to you and then you can begin to prepare for your future. Then all you need to do is make your move and settle in to your new place in the sun.
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