Pensions

With a Defined Contribution plan (‘money purchase’), such as a SIPP, you can: 

• Access a wide selection of investment managers and funds.
• Tailor your investment portfolio.
• Leave your money in your pension fund in the UK and draw an income (provided scheme rules allow)
• Take ad hoc lump sum payments with no limit, whenever you like.
• Receive a secure regular retirement income by buying an annuity.

If you’re an expatriate, you can: 

• Withdraw the whole amount and reinvest in a more tax-efficient arrangement for your country of residence, potentially also helping with estate planning.
• Transfer into a Qualifying Recognised Overseas Pension Scheme (QROPS) that may provide more benefits.

The right option will depend on your circumstances, objectives, risk tolerance and other retirement savings – and of course the tax implications and benefits, especially since the UK 2024 Autumn Budget. This has made many more transfers to QROPS liable to the Overseas Transfer Charge, and also brought pensions within your estate for UK inheritance tax from April 2027.

A Qualifying Recognised Overseas Pension Scheme enables expatriates to move their pension out of the UK. This means you can:

• choose the currency of your income
• receive payments gross of taxation without the need to apply to the tax authority.
• control who will inherit the balance on your death
• and avoid any future adverse UK pension reforms.

QROPS are not the right approach for everyone, especially now the 25% UK Overseas Transfer Charge applies to retired expatriates in Spain, France, Portugal and Cyprus. (Malta and Gibraltar residents have local QROPS and can continue to benefit from an exclusion from the charge.)

Spanish tax residents should also note that Spain applies a personal income tax charge to the fund value when a non-EU pension contract is transferred into an EEA pension scheme.

Talk to your Blevins Franks financial adviser before taking any decision.  We’ll navigate the complex tax and jurisdiction issues across the UK and your country of residence and outline your range of options to establish the best pension solution for you.

A less well-known option for UK nationals living abroad is to set up a Qualifying Non-UK Pension Scheme (QNUPS).  This allows you to increase the value of your retirement fund by transferring or contributing non-UK pension assets, and can offer a highly flexible and tax-efficient wealth planning structure. Much depends on your country of residence and personal situation, so professional advice is crucial.

Have you built up pension ‘pots’ in several different schemes over the years? Tracking, administering and investing money across multiple schemes is costly and time-consuming. It usually makes sense to consolidate them into a single larger pot, which can be administered more efficiently and managed more strategically.

Pension tax rules, rates and opportunities vary enormously between one scheme and another and one county and another. A withdrawal on which you pay 5% in one country can attract a charge of 40% in another. Some “government” pensions remain taxable in the UK, while others don’t. We know all the rules in the UK and in all the countries where we operate, and can make a plan so that you’ll never be caught out. That advice really is too valuable to ignore.

What’s more, while you face crucial decisions at the point of retirement, your circumstances are also likely to change in the following years. We’re committed to providing an ongoing, proactive service for as long as you need us, and our plans are flexible to suit your changing needs.   With advisers in both the EU and UK, this service will seamlessly continue if you relocate in future.

Alongside pension planning, we provide a range of services to offer a genuinely holistic approach to financial planning:

Tax planning
Minimising the tax you pay on income, gains, pensions, wealth and inheritances

Investments
Preserving your wealth through investment strategies tailored for you and your personal circumstances

Estate planning
Organising your affairs so that your legacy can be passed to your chosen heirs as tax-efficiently as possible, in both the UK and your resident country

Trusts
Advising on and administering trustee and corporate structures, where they suit your financial objectives