moving a pension internationally

dilby00 · 25 June 2017 at 10:01PM

Hi all -

I'm a dual citizen of both Australia and here in the UK, where I live with my wife and have spent the last 10 years. We are both self employed and I have no pension back in Aus to speak of as I moved here at the start of my career.

We both set up a pension 2 years ago which is run through my limited company of which we are both directors. We had our IFA at the time set them up for us but unfortunately he has since dropped off the radar and we are looking to move our pension elsewhere.

The question I have is this; do I need a particular kind of pension that will allow us to move it to Australia one day? We have no immediate plans to move but it's likely to happen at some stage and I'd hate to find that we cannot move our pension or have to start again and run two separate pots. Our IFA told us you needed a special pension for that and that's what he set us up with, but he's turned out to be not totally trustworthy and the person I was speaking to at Aviva (where our pension is) had no idea what I was talking about.

So really after all that long backstory, my main questions are:

Is there anything stopping me moving a pension overseas?
Is there REALLY such a thing as a pension that allows me to do it and one that doesn't?

Thanks so much!

dunstonh · 25 June 2017 at 10:57PM

nd the person I was speaking to at Aviva (where our pension is) had no idea what I was talking about.

That should not surprise you. Call centre staff are mostly low knowledge with just enough to do their day job.

The question I have is this; do I need a particular kind of pension that will allow us to move it to Australia one day

No.

Is there anything stopping me moving a pension overseas?

At this time, yes. Once you move, no.

Is there REALLY such a thing as a pension that allows me to do it and one that doesn't?

No. When the time comes, it can moved under QROPS. UK to Australia is fine.

Our of interest, what did this adviser call this product?

bostonerimus · 26 June 2017 at 2:16AM

Th last budget made QROPS far less desirable.
QROPS are an area of significant expense and dubious dealing. I've certainly run across a couple that encourage US citizens with UK pensions accounts to move them to Malta downplaying the serious US tax consequences.

Malthusian · 26 June 2017 at 12:42PM

The tax charge introduced in the last Budget would not be a problem for the OP if he is moving his pension to an Australian QROPS once he has moved to Australia. The 25% tax charge does not apply if the QROPS is in the same country you live in.

QROPS were already undesirable for the vast majority of people. I am sure there is some combination of circumstances for highly internationally mobile jet-setters where a QROPS could have been good before the budget and bad afterwards. But for most people, if the 25% tax charge on QROPS is a problem then they should look closely at whether QROPS was a good idea in the first place.

dilby00 · 27 June 2017 at 10:47AM

Thanks for the replies everyone. I've had a chance to do more reading; I'd not come across the QROPS system but that makes a lot of sense now. I think this is what our IFA at the time was referring to when saying he'd find us a 'special pension' for what we were looking to do. He wasn't lying I guess but clearly made it sound more specialised than it was.

I'm really disappointed with the way it was set up with Aviva; if you buy a pension direct with them you have access to their app, and reporting, and a bunch of stuff, but because we went through a broker we only get excel spreadsheets! So we basically paid our IFA for what we could do ourselves, and ended up with a poorer product.

I've come across Nutmeg which seems to really suit me, but they are not QROPS qualified. Just a thought; could I transfer a pension away from them before I left Australia to a QROPS uk scheme and use it as a middle man to then transfer to Australia? Or what fees make this expensive?

Thanks!

Malthusian · 27 June 2017 at 11:29AM

QROPS are very specialised. There are numerous pitfalls and misconceptions, and even an expert can easily become unstuck because HMRC have a habit of changing the rules retrospectively and without warning.

Nutmeg is aimed at the low-knowledge section of the market. There are numerous platforms which do more at lower cost.

What do you mean by QROPS UK scheme? A pension scheme is either UK or it is QROPS. The clue is in the name - Qualified Registered Overseas Pension Scheme.

Any UK pension can be transferred to a QROPS (advice may be required if you have safeguarded benefits). It makes no difference whether you transfer from Aviva to QROPS or Aviva to Nutmeg to QROPS, other than having Nutmeg instead of Aviva manage your pension in the interim.

dunstonh · 27 June 2017 at 11:35AM

I think this is what our IFA at the time was referring to when saying he'd find us a 'special pension' for what we were looking to do. He wasn't lying I guess but clearly made it sound more specialised than it was.

It is highly specialised. The vast majority of IFAs out there will never have arranged a QROPs. It is very niche.

I'm really disappointed with the way it was set up with Aviva; if you buy a pension direct with them you have access to their app, and reporting, and a bunch of stuff, but because we went through a broker we only get excel spreadsheets!

Aviva cater for different distribution channels, like most. They also have different versions of product available. The IFA version has online access on their modern plans for consumers but many IFAs also have their own client portals as well (i.e. you log into the IFA site and you get the data). If you use a discount broker, you are looking at the more basic product version. Plus, you are not paying for an IFA so you dont get their tools.

You say it was arranged by an IFA. If this was not long ago, then you should have online access via Aviva. If this is going back some years then you probably wont but then you wouldt have had it if you bought direct from Aviva either as older products didnt have it.

To be honest, you dont use Aviva when you have a client that wants decent online services. That is not what Aviva are strong at. This does not make the product poorer. Aviva are one of the lowest charging providers. Every provider has pros and cons and this is why there is no one-size-fits-all solution. Have you asked the IFA about using their client portal, if they have one?

I've come across Nutmeg which seems to really suit me,

Really? Do a bit more research. Dont just focus on the fact they have an app. You wont be looking at your pension with any sort of frequency that requires a decent app.

Also, QROPS is terminology that covers the transaction rather than a product type (i.e. moving your pension to a Qualifying Recognised Overseas Pension Scheme). It doesnt really matter who the pension is with currently.

atush · 28 June 2017 at 1:18PM

Why are you unhappy with Aviva? Is it not performing as you think it should?

What investments within aviva did you and your IFA choose? You can change investments within Aviva if you want to.

dilby00 · 29 June 2017 at 9:01AM

Thanks all -

A few replies below:

I'm unhappy with Aviva but also unhappy with the IFA that set everything up; I was green (still am) and looking back I shouldn't have got him involved.

I'm an app developer by trade and combined with my age this is partly responsible for the fact that I do value a good user interface and keeping up with everything that's happening. This is certainly the way the industry is going and if you look at where current investment lie then companies like Aviva will have their work cut out to stay relevant in the years ahead.

According to their staff, aviva have two portals. One is their broker portal, which I'm limited to as I was signed up through broker. It is barely a portal; i was told i'd be able to view all these reports and stats and be able to make changes but in reality i'm able to choose which month to download as an excel file (it just gives me overall earnings) and I can change my password. It's a joke and I could have built it myself in an afternoon. Aviva have said they can put me onto their own system which gives more insights but from what I can see it's not a huge amount better, and it frustrates me that such a divide exists. It's also a sore point that I effectively paid extra to be on a worse platform.

I'm aware I don't need to be making regular changes, but i do value seeing insights and keeping on top of things easily, especially being once bitten twice shy. This is why nutmeg appeals to me. I've checked their recent performance and it compares well to aviva.

However a more serious issue seems to be the IFA told us he was arranging a special pension for us that we could move overseas and I remember the phrase QROPS being used.

It's been mentioned I can transfer any UK pension scheme to QROPS - so is qrops the scheme I actually have in Australia? I'm just a bit confused as I've been told the pension I need NOW has to be QROPS qualified. I'm confused why it seems so tricky as so many british citizens move to Australia, I'm wondering what they all do!

Malthusian · 29 June 2017 at 9:43AM

It's been mentioned I can transfer any UK pension scheme to QROPS - so is qrops the scheme I actually have in Australia? I'm just a bit confused as I've been told the pension I need NOW has to be QROPS qualified.

If we're still talking about a UK pension then no. Any UK pension can be moved to QROPS.

The IFA has either pulled the wool over your eyes or it was already there and you misunderstood something he said.

Past performance is irrelevant. In any case, you can easily invest in what Nutmeg invests in at lower cost, which guarantees that you will outperform Nutmeg.

Wanting a better user interface is perfectly reasonable but Nutmeg offers an extremely limited selection of investments - more limited than other platforms at a higher cost - so it makes no sense to pick Nutmeg if you want to be more actively involved in your investments. If you decide, having kept up with everything that is happening, that what is happening to your portfolio is not good, then you have extremely limited scope with Nutmeg to do anything about it.

In any case constant monitoring of a portfolio does not produce additional returns, and produces little other than additional stress and the risk that you panic and cash in or churn the portfolio.

While your IFA may have his faults, you should be extremely cautious who you approach about arranging the QROPS - the market is full of sharks. Only use a UK-based and UK-regulated IFA and make sure they use mainstream regulated investments.

Skibunny40 · 29 June 2017 at 9:44AM

When you arrive in Australia, there will be many IFAs there that are familiar with how to transfer your UK pension across to a QROPS scheme - as you say, there are lots of Brits who emigrate ( most of whom have pensions set up in the UK well before they ever thought of emigrating!

moving a pension internationally

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