Pension once left the UK

John_Nimi

Hi,
I am an expat (non-EU) working in the UK and have been contributing to my workplace pension scheme for a while now (and am a higher rate taxpayer). I'd like to know what my options are when / if I decide to leave the UK? (is cashing in on the contributed money possible? or do I still have to wait until the retirement age before I can access this money). OR is perhaps the pension scheme not the best place to be saving up for retirement for me (if I decide to leave the UK around age 45)?

[Deleted User]

It’s a lottery. Depending on the country, you may be able to move your UK pension to your non-UK based pension. This is the case if you are moving to the US, for example. Just use QROPS to transfer.

If you are from Canada or Australia then you are screwed, at least for now. You have to keep the money in the UK or face punitive taxes.

And you do have to wait until the retirement age, at least till you are 55, to access.

If you have spent more than 10 years in the country, you will also get UK state pension when you hit 67 but it won’t be indexed for inflation.

bostonerimus

Deleted_User wrote: »

It’s a lottery. Depending on the country, you may be able to move your UK pension to your non-UK based pension. This is the case if you are moving to the US, for example. Just use QROPS to transfer.

Sorry but that is awful advice. QROPS are not recognised by the IRS and you will most likely pay US tax on the transfer also there is no way to do a cross-border transfer into a US retirement plan. However, there is a good tax treaty in place between the US and the UK that will allow you to maintain tax free growth in a UK pension if you are a US resident.

I agree that this is all highly dependent on the countries involved, the treaties in place and local laws so you need to research your particular circumstances. One thing I can say is that QROPS are seldom a good solution.

John_Nimi

hmm.. ok so if QROPS is not an option is there any other way to get access to the money put aside in a pension once out of the UK?

fifeken

Deleted_User wrote: »

If you have spent more than 10 years in the country, you will also get UK state pension when you hit 67 but it won’t be indexed for inflation.

This is also incorrect. You need ten years of qualifying National Insurance contributions and you may get the annual increases depending on where you live.

Paul_Herring

John_Nimi wrote: »

hmm.. ok so if QROPS is not an option is there any other way to get access to the money put aside in a pension once out of the UK?

Stating the intended destination country may be helpful in getting relevant answers...

John_Nimi

the destination country where I hope to retire is India at this point (which I can see has QROPS but I'd like to know of any other options if using a QROPS is not a good solution)

bostonerimus

In most circumstances it’s best to simply leave the pension to grow where it is and then take income according to the usual rules. Take a look at the UK/India tax treaty, there will be a specific section on Pensions. Usually their tax free growth status is maintained and when you eventually take income you are taxed where you reside, not by the UK.

[Deleted User]

bostonerimus wrote: »

Sorry but that is awful advice. QROPS are not recognised by the IRS and you will most likely pay US tax on the transfer also there is no way to do a cross-border transfer into a US retirement plan. However, there is a good tax treaty in place between the US and the UK that will allow you to maintain tax free growth in a UK pension if you are a US resident.

I agree that this is all highly dependent on the countries involved, the treaties in place and local laws so you need to research your particular circumstances. One thing I can say is that QROPS are seldom a good solution.

1. None of this is advice. All of it is opinion.
2. Right now I would rather pay US taxes than have funds stuck in the UK

bostonerimus

Deleted_User wrote: »

1. None of this is advice. All of it is opinion.
2. Right now I would rather pay US taxes than have funds stuck in the UK

If you are ok paying the high QROPS costs, US tax on the transfer and maybe tax under PFIC rules in future then go for it.

bostonerimus

fifeken wrote: »

This is also incorrect. You need ten years of qualifying National Insurance contributions and you may get the annual increases depending on where you live.

Yes. I live in the US and my UK state pension will be fully index linked.