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Drawing UK Pension Benefits Overseas
Until very recently the UK pension system was incredibly complicated, especially for Expatriates with UK Pension Entitlements living around the world. Thankfully a number of significant improvements have been made since April 2006, in particular the introduction of QROPS.
What is a QROPS?
The name itself means Qualifying Recognized Overseas Pension Scheme and for anyone intending to remain outside of the UK for the foreseeable future with existing or potential UK based Pension Entitlements, these can have a number of benefits:
- HMRC Approved
- Ability to draw income Gross for certain schemes
- No need to ever purchase an annuity. Currently rates are at an all time low.
- No UK Inheritance Tax Charge when passing your entitlements to beneficiaries.
- Access to potentially higher levels of Tax Free Cash.
- More Investment Choice and Currency Options.
- More flexibility for drawing income.
When is a QROPS Not Suitable
If you are intending to return to the UK within the next 5 years then the benefits detailed above will not apply when you return. Additionally many defined benefit schemes such as Employer final salary schemes as well as Police, Military, NHS and other government provided schemes, normally provide a level of benefits which even after the deduction of taxes are normally better than a transfer to any other type of Pension Scheme.
UK State Pension Entitlements
Currently the Basic State Pension is £95.25 for a single person and £152.30 for a couple but your entitlement depends on your record of National Insurance Contributions. From April 2010 you will need to have made 30 years contributions to receive the full entitlement.
The basic State Pension cannot be transferred to any other type of scheme but you can draw benefits in a wide range of countries and depending on whether your country of residence has a tax treaty in place with the UK, you may be able to draw benefits free of tax but you might need to pay tax on the income you receive to your local revenue.
Put us to the test and contact us today
To find out more about how we can help, please contact us today by clicking on one of the links below. You may find it helpful to complete our detailed Online Analysis for Drawing UK Pension Benefits Overseas. This is designed to give you some quick feedback and some guidelines on how to draw UK Pension Benefits in the most effective way whilst overseas.
Click here to go to our Detailed Online Analysis for drawing UK pension Benefits Overseas.
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1. No need to buy an Annuity
2. Income paid gross
3. No tax charge on passing assets to Beneficiaries.
more than the surrender value paid by the bank or insurance company who sold you the policy.
Perhaps you need access to cash or would like to look at more suitable investment options.
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