How have you planned your retirement? Are you the type of person to have all of the finances sorted, then work out what your budget will allow you to do? Or do you make plans for what you want to do and let the money work itself out?
If you are planning to retire abroad but keep your UK pension back home, you may wish to consider what restrictions your UK pension may impose on your retirement. Fortunately, compulsory annuitisation is being scrapped so older people will not find themselves shoe horned into purchasing an income bearing product as their 75th birthday looms on the horizon.
However, the UK pension regulatory regime may still have a hold over your retirement plans. Were you planning to release a lump sum to buy a property in your new homeland? Perhaps you had designs on your investments to provide the funding for a once in a lifetime holiday or to help out with your grandchildren’s school fees, or even to help them onto the property ladder. Given that the restrictive nature of UK pensions may not allow lump sums to be withdrawn that are large enough to be any help, what can you do about it?
The answer to that question may depend on whether you have started taking benefits from the pension yet. If you have, your options for transferring it to another destination may be limited. However, if you have not, you may be able to get a QROPS.
A QROPS is a Qualifying Recognised Overseas Pension Scheme, which means that it is a foreign pension scheme that has been authorised to accept transfers of UK pension assets. Not only might you be able to find a scheme in a jurisdiction that may authorise larger withdrawals than the UK does, but your pension will also be free from UK tax!
