Intenational Pensions....who the? what the?

Morning_2

Having recently become an expat at the ripe old age of 26, I am now having to consider my Pension options. I previously had a company pension but am now at a loss for what to do, as I am living in Germany where a huge amount of salary is paid into the national pension scheme, leaving not much leftover for private pension contributions.

Does anybody have any tips on International Pensions?

Cook_County

I agree that the German system is expensive.

A few tips:
1. In the UK one gets tax relief as one contributes to a pension plan and then pays tax on most of what one gets back (it has grown largely tax free in the intervening years). In some other countries (and I believe Germany is an example) one gets no tax relief on the contributions but then the pension is paid out tax-free. This will of course be no good to you if you back in Blighty at retirement because you will get no tax relief on the way in but pay just as much tax as everyone else on the way out. In other words do the maths right the way through from contribution to pension age.
2. Consider whether or not you wish to pay the Church tax.
3. German state pensions have historically been much better than UK state benefits. However contribution levels have been much greater. It is well known that the German state pension system is virtually bankrupt already, so the benefits will almost certainly be much lower when you retire. Give yourself a read of the UK/German social security agreement to see how you can benefit.
4. Consider paying £2,808 a year into a UK stakeholder pension if you want more pension provision in the UK, but take tax advice in Germany as to how the contributions, the UK government subsidy and the growth are treated for tax purposes.
5. There are tax privileged insurance based products widely sold in Germany. Investigate if these suit you better than a pension.

EdInvestor

Morning wrote:

Having recently become an expat at the ripe old age of 26, I am now having to consider my Pension options. Does anybody have any tips on International Pensions?

Yes:avoid them, as you will receive no tax relief. In particular avoid all pensions sold by overseas IFAs regardless of how familiar the provider may sound, as all these products have high charges and onerous restrictions.

Accumulate savings for retirement in other ways such as buying shares,funds or property directly.If you don't have a UK home, now might be a good time to save for a deposit, since you already paying a big chunk into the German state pension and also have UK pension already accumulated.