Missing pensions can wreck the best-laid expat retirement plans

Published:  1 Nov at 6 PM
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Millions of pension savers risk losing out due to missing pensions.

British workers paying into occupational pensions are being warned they may lose their savings due to missing pensions. Numbers as high as three out of every four pension savers have no real idea how much they’re worth, nor how much they will need to spend as retirees, whether as expats or in the home country. Amongst the worst affected are those who’ve taken early retirement and moved overseas to less expensive countries, as they’ve often lost track of their entitlements. Especially if retirement plans involve becoming an expat in an unfamiliar land, keeping control of your savings is essential.

In addition, almost three-quarters of those paying into direct contribution pensions have no idea how much they’re losing due to payments to fund managers and the pension providers themselves. Recent research has shown rampant charges can eat away at the value of funds, with cutting just one per cent a year from charges meaning a £27,000 difference to a fund’s value. Other problems can occur for those transferring from mostly workplace direct benefit schemes, as valuable benefits and guarantees can be lost should the transfer be via an online execution-only platform.

Some 90 per cent of pension savers admitted they’d not taken financial advice before transferring their pension savings, whilst three quarters of those surveyed had no idea as to whether they’d lost out on benefits and guarantees by making the transfer. For many, the digital world and its advice can be positive, but it also provides a free-for-all to those looking to take financial advantage of the general lack of knowledge surrounding pensions and other financial matters.

Advice on how to avoid making a huge financial mistake includes being aware of the risks involved. If it’s just too easy to transfer your pension savings simply by a couple of clicks, that’s one sign you need to think twice before doing so. Questions such as how your funds will be invested, a comparison of the new scheme against the old one and the exact details of charges and management fees need to be answered before you make a decision affecting your financial future in retirement, expat or not.
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