Getting advice on transfering pension oversears

rexmedorum

I'm planning to leave the UK and my new employer's pension scheme is a Qualifying Recognised Overseas Pension scheme.
I have 2 different pension pots in the uk and I need some propper advice whether it is a good idea to transfer. How would I go about finding an adviser that actually knows enough about both sides of the transfer to give useful advice?

I can of ocurse approach a regular adviser but I'm worries they won't know enough about the overseas scheme and vice versa with any overseas advisors.
Having everything in 1 country is certainly attractive from a partical point of view though.

xylophone

To which country do you intend to move?

https://techzone.abrdn.com/public/pensions/Tech-guide-overseas-transfers#:~:text=A QROPS is a type,without incurring unauthorised payment charges.

You will need an IFA qualified to  advise on QROPS transfer.

Example

https://www.blevinsfranks.com/services/pensions/?utm_source=google-ads&utm_medium=search-campaign&utm_campaign=contact-us-pensions-france&gad=1&gclid=EAIaIQobChMIit6i4JvG_gIVTtPtCh3CtgWdEAAYAiAAEgLTL_D_BwE

Suhusa

I did transfer my pension to a German QROPS to make things easier for the tax side of things (since the UK tax year is somewhat exotic) and to avoid setting up a UK bank account from overseas (because who knows how long stuff like Wise will exist - I wouldn't be surprised if in a couple of years time it becomes practically impossible to get a UK account as an overseas resident). However, my pot was small enough to not need an IFA on the UK side. The small size of the pot was also why exchange rates were less of a worry for me. What I did though was to get some impartial advice on the scheme in Germany - there was just the one scheme open to me, and it's a type of product I know and understand but I still wanted to get an idea how to optimise it.

The one drawback for me is that the German scheme is by law a lot flexible than my former UK scheme. Given that the transferred pot forms a very small part of my plans for retirement I can live with that, and it's far outweighed by the trouble I'd have to get to to get a UK scheme properly taxed in Germany due to the differing tax years (whereas the German scheme is tax-free before retirement).

I doubt that you'll get an IFA that knows the pension system of both countries. So the next best thing is to ask one advisor for each country and to weigh pros and cons of transferring out. The advisor in your target country will give you an idea if the scheme you'll transfer into is a good one - you might want to ask them if the other QROPSs (if there are any) in your country might be better suited for your purposes. But I doubt you'll find anyone who knows both countries' tax and pension system to that level of detail that they can advise on whether to do the transfer or not. The only thing you can do is list the pros and cons and go to an IFA (who ideally has some experience with QROPS) to do a sanity check.

rexmedorum

I'm looking to transfer to The Netherlands. As you say it could get complicated tax wise and indeed who knows whether we'd still be allowed a UK account by the time we retire.

I can't seem to work out the value of the pension pots fro the statements, both are `defined benefit` schemes I think (USS and teachers pensions)

Suhusa

For defined benefit you will definitely need advice from an IFA.

xylophone

Re USS

https://www.uss.co.uk/for-members/leaving-or-already-left/transferring-to-another-scheme

Re TPS

https://www.teacherspensions.co.uk/members/faqs/working-life/transfers.aspx

bostonerimus

There is a tax treaty between the UK and The Netherlands and so I would leave your UK pensions in the UK, particularly if they are defined benefit schemes. Ask the schemes about their policies for paying pensions overseas. I would probably keep a UK bank account open for flexibility. Also take a look at your options for making voluntary UK NI contributions. If you can qualify to pay Class 2 NI it's a "no brainer".

dunstonh

I'm looking to transfer to The Netherlands. As you say it could get complicated tax wise and indeed who knows whether we'd still be allowed a UK account by the time we retire.

That also brings in complications with EU rules, post Brexit.    It makes it far more likely that an adviser in Netherlands is best.

I can't seem to work out the value of the pension pots fro the statements, both are `defined benefit` schemes I think (USS and teachers pensions)

And that makes it even harder and make the transfer statistically unlikely to be in your best interests and the Teachers pension scheme doesnt allow transfers out to DC schemes.

rexmedorum

That also brings in complications with EU rules, post Brexit.    It makes it far more likely that an adviser in Netherlands is best.

See this is my biggest worry: an advisor in either contry advising the opposite without really knowing the full picture.

 From what I can gather the Dutch scheme reads like a defined benefit type scheme

Suhusa

dunstonh said:

And that makes it even harder and make the transfer statistically unlikely to be in your best interests and the Teachers pension scheme doesnt allow transfers out to DC schemes.

This also has the potential to make it a complete cross-border tax nightmare - I don't know the Dutch tax rules, but if it's not recognised as tax-exempt by the Dutch then it's gonna be a nightmare to find a value to declare (and on 31 Dec instead of 31 Mar too!).

bostonerimus

Suhusa said:

dunstonh said:

And that makes it even harder and make the transfer statistically unlikely to be in your best interests and the Teachers pension scheme doesnt allow transfers out to DC schemes.

This also has the potential to make it a complete cross-border tax nightmare - I don't know the Dutch tax rules, but if it's not recognised as tax-exempt by the Dutch then it's gonna be a nightmare to find a value to declare (and on 31 Dec instead of 31 Mar too!).

This is where a the relevant tax treaty will be useful. In general pensions are covered and their tax deferred nature recognized and are rules in place on how and where to tax withdrawals. It's simplest not to try to move pensions across borders and just wait until you start taking income and then that can be moved and taxed appropriately.