EU citizen, pension in UK, now leaving abroad

bdoga

Hi all, I hope you can help me!

I worked 3 years in the UK where I enrolled to a workplace SIPP pension scheme. I and my employer contributed to the plan until I left the company in November 2018 and moved to Denmark.
I still have my UK pension plan open, but I don't contribute anything to it anymore. But I still obviously pay admin charges, which seem to slowly drain my savings. I don't know anything about funds etc. so I have no idea whether it is well invested or not. Plus I can't seem to see on my statements that there is any return but rather losses...

Therefore, I have 2 questions:
1. Can I and should I move my savings to Denmark? Am I going to lose by doing that?
2. If I leave my pension in the UK: I read that SIPP are more adapted to people who know about investments and large funds, which is not my case. What would a more sensible solution be, to keep growing my savings until I retire?

Thank you in advance, and please do ask if you need more details to answer

ermine

bdoga wrote: »

I still have my UK pension plan open, but I don't contribute anything to it anymore. But I still obviously pay admin charges, which seem to slowly drain my savings. I don't know anything about funds etc. so I have no idea whether it is well invested or not. Plus I can't seem to see on my statements that there is any return but rather losses...

Therefore, I have 2 questions:
1. Can I and should I move my savings to Denmark? Am I going to lose by doing that?
2. If I leave my pension in the UK: I read that SIPP are more adapted to people who know about investments and large funds, which is not my case. What would a more sensible solution be, to keep growing my savings until I retire?

Re 1) you are best finding out the tax situation in Denmark, this is a function of Danish tax rules, you need local expertise. You will also need to make sure that HMRC recognises the destination as a QROPS or is otherwise okay with the transfer so you don't pay UK tax.

2) Don't fear the SIPP moniker. The performance of your pension is a function of two things. Primarily what it is invested in. A widely spread global equity protfolio gives you a real terms increase of ~5% p.a. averaged over decades, though you can have retrenchments in the value (this is called volatility) year on year of 30% and even more. This is bad on the nerves. If you are looking at the performance of your fund in the last year a hit may be to be expected.
The second thing is fees, the combination of platform fees and fund fees. You can see that if your long term gain is 5% p.a, fees of 1% is effectively a 20% tax on your gains. So you need to reduce fees.

You are permitted to hold the SIPP in the UK, and you are permitted to move it somewhere cheaper.

MSE have a section on low cost SIPPS

You also need to understand the basics of investing, since that is what will give you your returns. It isn't as hard as it seems - Monevator is a good place to start and if you really don't want to go into the nitty gritty then Lars's video series on a world equity tracker is a good place to start.

It's worth taking a bit of time to understand the principles. Your older self will appreciate it.

xylophone

https://www.gov.uk/transferring-your-pension/transferring-to-an-overseas-pension-scheme

https://www.gov.uk/guidance/check-the-recognised-overseas-pension-schemes-notification-list

Above might be worth a read.

PeterT8

I would suggest calling the pension provider and asking for the following information:

1. current value
2. how the pension is currently invested
3. the list of investment funds available to the pension
4. the current charges that are being applied

If you are able to share that information, someone might be able to give you a steer re. whether it's best to keep or transfer the pension.

One note on QROPS- they are typically far more expensive than UK workplace pensions, so if cost is a concern, I'd rule it out. A QROPS also doesn't solve the issue of how the pension is invested.

There is, currently, a DTA between the the UK and Denmark so if the pension is retained in the UK (which I would initially suggest is sensible) you should be able to obtain an income tax credit to avoid double taxation when you eventually withdraw monies. One practical tip: retain a UK bank account! Pension companies are sometimes hesitant to pay money to overseas accounts.

bdoga

Thank you everyone for your answers.

You also need to understand the basics of investing, since that is what will give you your returns. It isn't as hard as it seems - Monevator is a good place to start and if you really don't want to go into the nitty gritty then Lars's video series on a world equity tracker is a good place to start.

Thank you for the links @ermine and @xylophone. I really do need to understand what my pension is invested into, at least I'd be less worried about seeing a loss because then I'd know that I made the choice.

I would suggest calling the pension provider and asking for the following information:

1. current value
2. how the pension is currently invested
3. the list of investment funds available to the pension
4. the current charges that are being applied

I will do that, if someone can give me more info, it should be them. And I did retain my UK account