How to gather pensions funds paid abroad into 1 pot?

aurore79

Hi there,

I have been living and working in New Zealand, Ireland, England, France and Canada. I signed up to pensions plans with each job I had in those countries. What do I need to do to make sure that the money I paid towards a pension is collected into the one pot so when I come to retirement age i will be able to access it easily?

Any help would be much appreciated.

Aurore

sandsy

It may not be possible - it will depend on the pensions release laws in each country. I have pension pots in two other countries, Australia and South Africa. Releasing both pots now would entail paying substantial tax penalties in each country, reducing the value of each pot and effectively turning them into unpensioned money. I think this is the case no matter when I take the Aussie one. With the SA one, if I leave it until retirement, I can take a tax free lump sum (similar to here) but the rest has to be annuitised or used for a drawdown product there.

I'd suggest you do some internet research on the treatment of expat pensions in each country.

aurore79

Thank you Sandsy. I will look into it.

xylophone

http://www.zurich.co.uk/internet/zurichintermediary/Documents/129785.pdf may be worth a look - you will need advice from an expert?

Example http://www.spectrum-ifa.com/uk-pensions-and-non-residents/

http://www.pensionsadvisoryservice.org.uk/about-pensions/the-state-pension/living-overseas

aurore79

Thank you very much for sharing the links xylophone.

Aurore

kangoora

You also want to look into what government pensions you may have built up in each country and if/how you can access them. I recently chased down my USA social security from 3 years spent working there and to my surprise it appears I qualify for about $150 month from their retirement age.

dunroving

One possibility, depending on the tax treatment in the foreign countries and any tax treaty and/or foreign pension laws is the following:

If the foreign pension is a defined contribution scheme, drip-withdraw the funds over a short period and pay any tax due, either in the foreign country or (if there is a UK tax treaty), claim exemption from tax in the foreign country and pay it in the UK.

Then pay it into a SIPP and claim back UK income tax.

Alternatively, increase your work pension payments if you have one (or work AVC scheme if you have it) and live on the income from the foreign pension.

I am in a similar situation with my US defined contribution "pension" (retirement scheme), which can't simply be transferred into a UK pension scheme. In the US you can withdraw from the age of 59.5 or even prior to that, though it is then subject to an additional 10% penalty).

So I currently plan to do the above. I'll either (a) considerably increase my AVC contributions from my UK job, reducing my net salary to the income tax threshold, and live off my US pension drawdown income until retirement, or (b) leave my UK occupational pension contributions as they are, and invest my US pension income in a SIPP.

The US-UK tax treaty allows me to draw down my US pension without paying US tax on this income. I would then pay UK tax, but will get this back when I pay into the SIPP.

It's not perfect and depends on certain requirements (including (a) minimum age you can draw the foreign pension, (b) tax treatment in the foreign country when you withdraw the foreign pension, and (c) existence of any UK tax treaty that will prevent you having to pay income tax in both countries.