Unlock my pensions

tekman

I married my South African Wife last year in Cape Town and will be moving shortly to live and work there. I am British 45 and have a couple of pensions from previous employers Xerox and BT. They aren't particularily large pensions but I was wondering if I could have the money released from these schemes thus giving my wife and I at least a chance to get on the property ladder. A fella I spoke with today (financial Advisor) informed me that although companies can release the funds early they really don't want us to know that this was possible. He also said because I am leaving the UK to live abroad with my wife then the chances are that I would be able to cash in these pensions.
I did contact Xerox and they were very unhelpful and vague about this issue. Can anyone offer me any pertinent guidance on this issue please

dunstonh

A fella I spoke with today (financial Advisor) informed me that although companies can release the funds early they really don't want us to know that this was possible.

Thats because its not possible unless you break HMRC rules and get scammed by some dodgy overseas company.

He also said because I am leaving the UK to live abroad with my wife then the chances are that I would be able to cash in these pensions.

You may have the option to utilise QROPS with the pension but it may or may not be a good idea to do this.

I did contact Xerox and they were very unhelpful and vague about this issue. Can anyone offer me any pertinent guidance on this issue please

Xerox are not authorised to discuss this with you. So, it would be unfair to expect them to do so.

There are legitimate schemes using QROPS but there are plenty of dodgy ones. If you are looking at moving defined benefit schemes this way then expect it cost you an absolute fortune (often in hidden fees taken from the pension which you are unlikely to spot until after its too late).

tekman

Thank you for your advice seems like I was offered dodgy advice the other day. Hmmm not surprising really. No idea about QROPS so I'd better take a look at this thank you again.:T

Iancfp

Definately do not rush into anything

Any QROPs is currently high risk as HMRC recently won a high case allowing them to retrospectively tax charge one. It failed because although it was technical open to locals (one of HMRCs requirements) no one had joined it.

Now given that for a local there is no way you are going to join a scheme that has to offer you the worst of UK or local country rules most QROPs will fail this test

So you could end up paying a lot of fees for a QROPs and then face a big tax penalty later

tekman

Oooh thanks Ian, QROPS doesn't sound to hopeful then hmmm. Maybe it will be best to just leave my pensions where they are for now at least until I have made time to investigate my options further:)

kidmugsy

There may come a time when you will be v grateful for having a pension that is not in S African currency. Meantime, may I suggest that you get a local tax accountant who can keep you right on the rules for declaring the existence of your pension to the local taxman. In some countries they would have the right to tax you on any income - or notional income - generated within the pension: it's UK income tax you are protected from, not necessarily anyone else's.

pforma1

Any legitimate QROPS will not let you take benefits from it until you are aged at least 55.

Best you could then do is with an IoM QROPS as the pension commencement lump sum formula is 30% of transfer value in plus 100% of fund growth therafter. The 70% of transfer value must then be used to provide an income. This income is payable gross from IoM but obviously has to be declared when received in S Africa.

atush

I am with Kidsmugsy on this one, don't fool with your pension as one day you will be glad to have it. You can access the 25% lump sum in 10 years.

In the meantime, get on the property ladder the way we all do. Spend less than you take in and save the rest for the deposit.

Loughton_Monkey

If there were 'legitimate' and 'cost efficient' ways of doing what you want, we would have heard about it by now. All we hear about, though, is the 'dodgy' schemes and scams that are unregulated, potentially illegal, and remove the vast bulk of your wealth.

In any case, diverting pension money to capital purchases seldom makes sense anyway. It takes years to pay for a decent pension, which is one reason why these laws (about not taking it early) exist. Even taking a 'pension contribution holiday' usually ends up as a large regret later in life.

Leave your pensions where they are.