If you’re a British expat looking to take control of your retirement, our defined benefit pension transfer service can help. Our specialists will provide tailored advice based on your situation, helping you determine if a transfer is the right choice.
With our service, you can join over 3,387 expats in gaining greater flexibility and control, allowing you to:
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With a defined benefit pension, a spouse typically receives 50% of your pension when you die. Children over 21 or 18 and working get 0%. Transferring to a personal pension means you not only choose who receives the fund but also how much and exactly how they get it.
1/3 of UK final salary schemes have gone bust already, and more will continue. A personal pension is independent of a company’s ability to fund it from revenue. So you can be confident that your pension survives.
You can receive the same pension income by transferring out of your defined benefit pension. You can do this by making the same investments your existing pension trustee is in – with no reliance on your employer remaining solvent. Plus, you will get all the additional benefits.
Managing various schemes can be challenging if you’ve worked numerous jobs. However, consolidating pension accounts provides one clear view of your retirement assets – plus, you won’t need to worry about the added complexity of your fund’s currency.
A personal pension offers 12 significant currencies to hold funds (so you’re not tied to currency risk).
With a defined benefit pension, the income tax you pay is defined for you. With a personal pension, you choose how and when you pay taxes.
The normal retirement age is fixed at 60 or 65. If earlier retirement is an option, it will result in a penalty. A personal pension allows you to access your pension from 55 years old without penalty.
A defined benefit pension pays you a monthly income. With a pension transfer, you can get 25% of your Cash Equivalent Transfer Value (CETV) as a tax-free cash lump sum. This money can help you pay off the mortgage, invest in another property, travel, or help your children get on the property ladder – the rest will go into your pension.
We are a financial advisory service that specialises in serving British expats. We offer a range of financial services, including defined benefit pension transfers specifically tailored to the needs of British expats.
Our advisers have extensive experience and expertise working with clients living abroad and can guide them on various financial issues unique to expat life, such as pension transfers, cross-border tax implications, and estate planning.
All of our advisers are experienced working cross-border guaranteeing we satisfy both countries legislation and ensuring you won’t invoke unnecessary tax penalties.
By focusing on British expats’ financial needs, we offer specialised, personalised advice to help our clients achieve their financial goals.
As a client of AHR Group, you will be assigned one of our dedicated defined benefit pension transfer specialist advisers. There are several benefits to working with one of our advisers:
Your adviser will have the necessary knowledge and expertise to guide you through the process and ensure that it is carried out smoothly and in accordance with all relevant laws and regulations.
Your adviser will handle all the paperwork and communication with the pension providers on your behalf, saving you time and effort. Wherever you are in the world, we can work with you through the convenience of Zoom.
In addition to your dedicated adviser, you will also have access to AHR Group. This will future proof your private wealth as you can access the full spectrum of our financial, tax and estate planning expertise.
We welcome and acknowledge the importance of stringent regulation and licensing in the financial advice sector. All of our advisers are fully licensed and regulated to provide industry-leading, trustworthy guidance and to our clients.
We also actively work with regulators to ensure that our service is compliant and tailored to best suit the interests of our clients.
We believe in complete transparency regarding our fees. When managing your financial future, we understand that you want to know precisely what you are paying for. That’s why we clearly outline our fees upfront and explain what each fee covers.
One of the main benefits of transparent fees is that it allows you to make informed decisions about your financial planning. When you know precisely what you are paying for, you can decide whether the services offered are worth the cost.
This level of transparency also helps to build trust between you and your financial adviser. As a result, you can be confident that you are not being taken advantage of or overcharged.
Private employer final salary pension deficits increased 12X, soaring from £10.9billion at the end of 2022 to £135.9billion at the end of March 2023.
3,606 of the 5,422 DB schemes do not currently have the assets to fulfil all of their pension member’s liabilities.
per day is being transferred out of Final Salary schemes.
Even the most generous final salary schemes only allow you to leave a maximum of 66% to your loved ones. Typically it’s only 50%. With a Personal Pension 100% goes to your loved ones.
In 2016 all public sector (NHS, Civil Service, Police, Fire-service) schemes became no longer transferable. The concern for members is the private sector could one day follow too.
This is the reduction in total payable income for someone with a defined benefit pension valued at £20,000 p.a. when the inflation rate is switched from RPI to CPI in 2030.
Won’t I lose my guaranteed income?
It’s too complicated, it’s easier to leave it
I don’t have the time or effort
Lack of Flexibility: Income options are fixed. Adjustments after retirement are typically not possible, making it potentially limiting, especially for expats.
Guaranteed Structure: The scheme’s guaranteed income commences once you reach your expected retirement date. This income is safeguarded and promises an escalating income for life.
Currency Constraints: Payments are always in GBP, potentially causing issues for expats due to currency exchange rates.
Strict Income Options: Income is paid for life, typically increasing yearly with inflation. Even if you live longer than expected, the scheme benefits might offer better value than a personal pension.
Reduction in Benefits: The transition to CPI from RPI in 2030 will lead to potentially lower pension income over time. Taking income early results in a reduction (early retirement factor), and taking it later results in an increase (late retirement factor).
Taxed at Source: Potential benefits from a double taxation treaty between the UK and your home country. Depending on circumstances, income may be taxed at source by the scheme.
Irreversibility of Transfer: If you opt to transfer out, trustees aren’t obliged to reinstate your original benefits.
Trustee Management: The Defined Benefit scheme is managed by trustees and administrators, eliminating the need for you to make complex investment decisions.
Death Benefits: Upon death, spouses typically receive only 50% of your final salary pension. Children over 21, ‘or in full-time education over the age of 23 or those aged 18 and working receive 0%.
Inflation Protection: Your income will usually increase with inflation measures such as RPI, but the transition to CPI in 2030 will result in reduced yearly increments.
Pension Protection Fund: If the scheme can’t meet its liabilities, the Pension Protection Fund provides a safety net, albeit with specific caps and restrictions.
Retirement Age Clarity: The standard retirement age is between 60 to 65. Early retirement is possible with some adjustments, like an early retirement factor.
Loss of Guaranteed Income: By transferring, you’re giving up a guaranteed, escalating income for life. Should you live longer than expected, the scheme benefits of a Defined Benefit pension might offer better value.
Flexible Structure: A personal pension is a fund you own; its value is based on contributions and investments, starting with your transfer value.
Investment Risks: Past performance is just a guide; future performance isn’t guaranteed.
More Income Control: You control the income withdrawal, which can be used for global tax efficiency. The income is flexible, and you can adjust it based on circumstances. You can decide on the level and frequency of income and alter this to meet your income requirements. For instance, you may opt for a higher pension early on to make the most of your retirement and later reduce your income as you age.
Potential Early Withdrawal Impact: Accessing funds while working could reduce future income when you need it most.
Tax Planning Advantages: Possibility of 25% tax-free withdrawal and potential expat tax benefits, depending on individual circumstances and residence country.
Tax Implications: There might be consequences depending on how you access your pension, and tax and pension laws might change, affecting benefits or drawbacks.
Full Control: Over both investments and pension benefits.
Inheritance Tax Risk: Death benefits might be subject to inheritance tax if transferring when in poor health and dying within two years.
Legacy Planning: The entire pension fund value is available to whomever you nominate within your death benefit nomination, in whatever proportion you choose, either as a lump sum or as income. This flexibility allows a spouse, for instance, to receive the full 100% of the funds.
Currency Flexibility: A personal pension designed for international residents offers choices among 12 major currencies for fund holdings.
Investment Control: You can determine how your pension funds are invested.
Early Retirement: Possibility to retire once you turn 55.
Book a free no obligation 15 minute call with one of our pension transfer business development managers. They will explain which pension transfer benefits you qualify for, explain the best option for you and explain the pros and cons of transferring.
On your behalf we will contact the trustees of your UK pension schemes and gather all of the information specific to your pensions.
Once we receive information specific to your pensions, your pension transfer adviser will discuss your financial situation and personal objectives for retirement. To do this, we will :
We will provide you with a free pension transfer assessment report that considers all the information from your pension and current situation. The report will include:
If a transfer is recommended, and you accept our recommendations, we will manage all aspects of the transfer for you. If not, you walk away without paying a penny.
A pension transfer value (CETV) is the cash value that you would receive from your private sector defined benefit pension provider into your own personal pension. Find out your estimate in 30 seconds with our calculator.
Speak with one of our experts during a complimentary 15-minute call, and you’ll:
As a British expat with a defined benefit pension scheme, understanding the pros and cons of a pension transfer is crucial to making an informed decision. This guide explains how a defined benefit pension transfer could impact your future.
Our Financial Resources help you to make informed decisions for your financial, tax and estate planning goals. Start learning today.
A defined benefit (DB) pension scheme is a retirement plan where you can expect a guaranteed amount of money from your employer once you retire, based on your years of service and final salary. Your employer manages the plan’s investments, and you receive a monthly payment for the rest of your life.
As a British expat, you can transfer your defined benefit pension. To do so, you must consider a self-invested personal pension (SIPP) or a qualified recognised overseas pension scheme (QROPS), depending on your circumstances and financial goals.
It’s crucial to seek professional advice from experienced cross-border defined benefit pension transfer advisers to ensure you’re making informed decisions that align with your long-term objectives and comply with regulatory requirements.
As a British expat, transferring your defined benefit pension to another country is possible through a qualified recognised overseas pension scheme (QROPS). A QROPS allows you to consolidate your pension assets, benefit from currency and tax advantages, and access a wider range of investment options.
However, the process can be complex. Therefore, consulting with an experienced financial adviser specialising in cross-border expat pension transfers is highly recommended to ensure a smooth, compliant process and maximise your pension assets abroad.
You cannot transfer a defined benefit pension to another country using a Self-Invested Personal Pension (SIPP), as SIPPs are UK-based pension schemes. However, you can still use a SIPP to manage your pension assets while residing abroad.
If your primary goal is to transfer your pension to another country, a Qualified Recognised Overseas Pension Scheme (QROPS) would be more suitable. QROPS are designed specifically for expats and allow transferring pension assets to an overseas scheme in compliance with HMRC regulations.
It’s essential to seek professional advice from a financial expert experienced in cross-border defined benefit expat pension planning to determine the best course of action for your situation and ensure regulatory compliance.
With AHR-Group, there is no charge to explore your options. However, there may be a charge to transfer due to the specialist nature of this type of business. This can range from 0-5% of the fund value. If this is the case, we will highlight this in your pension report, which you will receive before any fee is agreed upon for free.
For a British expat considering a defined benefit pension transfer, it’s crucial to weigh the advantages and disadvantages to make an informed decision. Here’s a clear outline of both:
As a British expat, it’s essential to consult with a specialist cross-border financial adviser experienced in expat pension transfers to evaluate the advantages and disadvantages in the context of your specific situation and long-term financial objectives when deciding whether or not to transfer your defined benefit pension.
There can be tax implications when transferring a defined benefit pension, particularly for British expats considering moving their pension to a Qualified Recognised Overseas Pension Scheme (QROPS) or a Self-Invested Personal Pension (SIPP).
Understanding the potential tax consequences is essential to making an informed decision.
Key tax implications to consider include:
British expats must consult a financial adviser experienced in cross-border expat pension transfers to assess the tax implications of transferring a defined benefit pension.
AHR-Group provides tailored advice, ensuring compliance with regulations and optimising your pension assets per your financial objectives.