Should expats transfer their pensions following PPF bad news

Published:  1 Sep at 6 PM
Want to get involved? Become a Featured Expat and take our interview.
Become a Local Expert and contribute articles.
Get in touch today!
After the UK Pension Protection Fund’s recent warning of shrinking retirement incomes, many expats worldwide are considering transferring their pensions.

According to the PPF in its role as protector of salary-linked pension plans, many expats nudging closer to retirement are expecting gold-plated final salary deals. Given the present economic circumstances, it’s clear they have been misled, with the PPF urging pension scheme providers to tell it like it is to their members.

The PPF’s protection scheme ensures most UK pensioners receive a minimum of 90 per cent if the promised amount no matter the state of the economy or that of the pension providers themselves. Even should the provider be declared bankrupt, the 90 per cent amount will still be paid. However, there’s a cap of £36,000 per year on retirement at age 65, less if retirement is taken early. Those who’ve paid in to get a higher annual sum are certain to be disappointed.

Many pension savers 50 years old or younger should now prepare themselves for an at least 10 per cent drop in their final salary pension amount. Of the half-dozen UK final salary pension schemes, five are struggling due to market conditions and may not be able to pay a full pension to their members. If cashing in at the present moment, savers should expect just 60 per cent of the provider’s commitments.

Whilst the above is scary enough, expats living and working overseas are being advised not to rush towards pension transfers to QROPs. Many expats hubs are happy hunting grounds for less than ethical, unqualified and often illegally working FAs, all of whom are experts in putting pressure on new clients rather than using expertise in their recommendations. At the present time, expats with pension schemes from former employers are being strongly urged to do nothing, at least until they have taken reliable, paid advice from a UK-based, FCA-registered IFA as to the best move for their money.
Like this news?

Comments » No published comments just yet for this article...

Feel free to have your say on this item. Go on... be the first!

Tell us Your Thoughts On This Piece:

Your Name *
Email * (not published, needs verification one time only)
  • Facebook
  • Follow us on Twitter
  • RSS feed
  • Facebook

Latest Headlines

News Links

News Archive