Savings and investments for UK expat in the far East

eggsplatt

Many of the posts on this subject in MSE are quite old and I am really looking to get some advice for the situation we now have in 2024 and several years into the future.

Please can you offer suggestions for a UK citizen who is working long term in the far East?  The job is a series of teaching contracts, which do not come with a pension in the country.  Time in the UK is no more than 4-6 weeks per year, so permanent resident in the overseas country. Has a Natwest current account, but really needs a place to save up a pot of money, part of which will be a pension. Natwest have advised that they cannot offer such an account. 

Most of the UK banks used to have an international branch which could provide just such a service but these all seem to have dried up, apparently for reasons to do with Brexit, despite the face that the work wasn't in Europe at all.

If UK banks can't offer such an account, a sterling account in an overseas country would be acceptable if it is reasonably secure for the long term.

wmb194

eggsplatt said:

Many of the posts on this subject in MSE are quite old and I am really looking to get some advice for the situation we now have in 2024 and several years into the future.

Please can you offer suggestions for a UK citizen who is working long term in the far East?  The job is a series of teaching contracts, which do not come with a pension in the country.  Time in the UK is no more than 4-6 weeks per year, so permanent resident in the overseas country. Has a Natwest current account, but really needs a place to save up a pot of money, part of which will be a pension. Natwest have advised that they cannot offer such an account. 

Most of the UK banks used to have an international branch which could provide just such a service but these all seem to have dried up, apparently for reasons to do with Brexit, despite the face that the work wasn't in Europe at all.

If UK banks can't offer such an account, a sterling account in an overseas country would be acceptable if it is reasonably secure for the long term.

There are many recent threads on this subject; as you have a NatWest current account you might be able to open a savings account with NS&I but otherwise you're probably stuck with offshore banks like those in the Channel Islands e.g., Skipton International and Lloyds Bank International. HSBC is always one to look at but it'll depend on where you live. Will Standard Chartered offer you anything for where you live, possibly a sterling account in Singapore?

https://internationalservices.hsbc.com/

Bostonerimus1

You should first look locally and take advantage of any tax breaks where you are tax resident. Also take a look at the double tax treaty between the UK and wherever you will be working with particular reference to pensions and tax advantaged accounts.

If there are issues with local arrangements look at HSBC and the Channel/IOM banks.

Bostonerimus1

JamesRobinson48 said:

May I take it that you're not prepared to disclose the name of the country?

When you say "permanent resident in the overseas country", do you truly mean permanent?  If you do, why accumulate savings in GBP £?

In what currency are you paid?

One drawback of paying into a pension when you're resident abroad is that contributions would attract no relief for UK income tax (as you're not liable for UK income tax anyhow); whereas drawings from the pension if resuming UK residence in later life would be taxable. So unless you're careful, you could incur highly adverse asymmetrical tax treatment.

The tax treatment of pensions will depend on the tax treaty in place and local and UK law.

poseidon1

If the OP is talking about teaching long term in China ( a very popular destination for 'foreign' teachers) I can confirm that despite the country now deducting local income tax and a form of social security deductions from 'foreigner' salaries there is no formal provision for  UK foreigners in the country to be able to claim any form of state pension from the Republic.

With no reasonable expectation of a chinese state pension as a foreigner, some countries have managed to negotiate bilateral  exemptions from local social security deductions for certain classes of employees. There are 12 such countries with these agreements at present including Germany, France, Spain and Netherlands.  Unsurprisingly, the UK is conspicuous by its absence from this roster.

Generally, if you are a UK teacher in China, you are very much on your own in terms of pension provision and have to largely rely on expensive and complicated international QROPs for private provision. On the plus side there are arrangements that can be made to maintain UK  voluntary class 2 or 3 NI contributions to retain NHS access and a state pension here.

Investing can also be challenging, since as a non tax resident of the UK  living in non EEA countries, it is difficult to access UK retail  products such as ISAs, bank fixed interest deposit accounts etc.
 
Access to banking, deposit and investment accounts from offshore centres such as Jersey, are largely  high income dependent  or require depositing relatively large amounts ( eg HSBC expat requires either £100k salary or £50k for investment or you are already an HSBC Premier account customer on departure from UK ).

Bostonerimus1

poseidon1 said:

If the OP is talking about teaching long term in China ( a very popular destination for 'foreign' teachers) I can confirm that despite the country now deducting local income tax and a form of social security deductions from 'foreigner' salaries there is no formal provision for  UK foreigners in the country to be able to claim any form of state pension from the Republic.

With no reasonable expectation of a chinese state pension as a foreigner, some countries have managed to negotiate bilateral  exemptions from local social security deductions for certain classes of employees. There are 12 such countries with these agreements at present including Germany, France, Spain and Netherlands.  Unsurprisingly, the UK is conspicuous by its absence from this roster.

Generally, if you are a UK teacher in China, you are very much on your own in terms of pension provision and have to largely rely on expensive and complicated international QROPs for private provision. On the plus side there are arrangements that can be made to maintain UK  voluntary class 2 or 3 NI contributions to retain NHS access and a state pension here.

Investing can also be challenging, since as a non tax resident of the UK  living in non EEA countries, it is difficult to access UK retail  products such as ISAs, bank fixed interest deposit accounts etc.
 
Access to banking, deposit and investment accounts from offshore centres such as Jersey, are largely  high income dependent  or require depositing relatively large amounts ( eg HSBC expat requires either £100k salary or £50k for investment or you are already an HSBC Premier account customer on departure from UK ).

I would not consider QROPs as they are expensive basically a rip off IMO. Definitely apply to pay Class 2 voluntary NI which will add to SP qualifying years, however, if you are not a UK resident then you don't get free access to NHS (unless you fall into some particular categories like military personnel etc) and paying Class 2 NI will not help with NHS access.