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Should I Transfer My UK Pension?

The reasons for undertaking a UK pension transfer will differ for each client. In some cases it might not make financial sense to undertake a pension transfer if, for example, you have a UK pension with certain benefits or guarantees. However, some of the key benefits of transferring your UK pension can include:

MORE REASONS TO CONSIDER A TRANSFER:

 

  • Consolidation

Having the ability to consolidate more than one UK pension into one easier to manage pension wrapper.

 

  • Taking Control

Being able to determine your own pension drawdown strategy and to retain the capital value of your UK pension.

 

  • Investment Options

Being able to determine your investment strategy based upon your risk appetite including having the option to invest and draw your pension in GBP or USD.

 

  • Full Pension Flexibility

Enjoying all of the UK pension flexibilities introduced by the UK Government on 6 April 2015.

 

  • Lump Sum

Being able to take a 25% cash lump sum free of UK tax from age 55.

 

A transfer is not appropriate for all individuals. There are disadvantages that must be evaluated including the cost of transferring and the ongoing costs and expenses, multiple layers of fees the client will bear and will impact overall performance, loss of guaranteed annual pension, loss of protections provided by the UK’s Pension Protection Fund (PPF) and exposure to investment risks to name a few.

 

SIPP Transfers

 

A SIPP (or Self Invested Personal Pension) is a type of UK registered personal pension that, as opposed to a conventional UK personal pension, can offer greater flexibility and individual control. In many ways, it is similar to an Individual Retirement Account (IRA) in the US.

SIPPs have typically been much more flexible than other types of UK pensions and now with the new UK pension flexibilities introduced on 6 April 2015, they offer even greater retirement and wealth planning opportunities.

Key Benefits:

  • Increased Pension Flexibility

  • Consolidation Of Several UK Pensions Into A Single Scheme

  • Transparent Fees And Charges

  • Ability To Pass Pension Funds On To Family Members After Death

  • Ability To Utilise Multiple Currencies

If you would like to learn more about SIPPs, feel free to contact us for an initial consultation.

No guarantees of investment success are offered. Investing involves risk including the loss of principal. A transfer is not appropriate for all individuals. There are disadvantages that must be evaluated including the cost of transferring and the ongoing costs and expenses, multiple layers of fees the client will bear and will impact overall performance, loss of guaranteed annual pension, loss of protections provided by the UK’s Pension Protection Fund (PPF) and exposure to investment risks to name a few.

Record High CETV's

Cash Equivalent Transfer Values (CETV) for UK private pensions have hit new highs in recent years. Firms are actively trying to de-risk their liabilities by incentivising members to transfer their UK pension. When calculating a CETV for a UK pension transfer, the most important investment return factor used by a scheme actuary is the risk-free investment return based on UK gilt yields which are currently at a record low level.

Legacy Planning

Your pension can be passed onto your chosen beneficiaries free from the limitations and restrictions commonly imposed by company pension schemes which reduce the benefits for loved ones. Typically, upon the passing of a scheme member, Defined Benefit schemes will only provide around 50% of the benefits to your spouse and should both parents pass after their children are out of full time education, they will receive nothing.

Market Risk

The pensions crisis in the UK has been widely reported on for many years. With company pension deficits running into the billions and a recent string of high profile corporate bankruptcies causing large schemes to collapse into the PPF (where benefits are then capped and reduced), reviewing your pensions and being aware of your options is an important consideration.

Frequently Asked Questions

What are my options when transferring my UK pension?


A common vehicle for expatriates in the US when transferring is a Self-Invested Personal Pension (SIPP for short). Our team of Investment Advisors are on hand to talk through all the pros and cons of each options available to you.




Who can transfer their UK pension?


In some cases, a UK pension transfer is not possible. Public sector unfunded defined benefit scheme members are prohibited from transferring, and if you are within one year of retirement age, it is left to the discretion of the trustees of the scheme.




How long does it take to transfer my UK pension?


The process of transferring your UK Pension typically ranges from 2-4 months but this is dependent on a number of factors which can mean this time is reduced or exceeded. Thankfully our team are on hand to handle the process for you to ensure it's as effcient as possible.




Does it cost me money to review my pension options?


No, the process of reviewing and exploring your pension(s) and options is completely free.




Does it cost money to transfer a UK pension?


Yes, we charge an upfront one-off fee to process your actual UK pension transfer. The exact cost of transferring your UK pension is dependent on a number of factors, however the process of exploring your options is completely free. Additionally, there will be costs you will incur on an ongoing basis from the trustee and platform providers.