Expat pension schemes / retirement planning for Greece resident

leedsathens

Hello, 

I'd really appreciate some guidance from anyone in a similar situation.

I have been living and working in Greece since 2021. I'm 38, have 17 years of UK state pensions contributions (which I'm still contributing to at around £170 per year), around 7 years of contributions in the UK Teacher Pension Scheme and since 2021 I've been contributing through Greek social security to the Greek state pension. My income is modest, so I would only be able to contribute about 100 euros per month to some kind of savings/private pension. Because of Brexit, I'm not longer able to contribute to a UK private pension and I don't want to contribute to a Greek one because  I don't rate Greek banks and I doubt I'll retire here (although you never know). I'm also in the process of buying a small apartment to live in in the centre of Athens with a mortgage. This could be rented out in the future.

Most of the companies out there that advise expats on retirement planning are either only interested in high net worth individuals or people closer to retirement age who already have large pension pots. I did find one company - Titan Wealth Management - who have recommended types of savings or investment accounts in the Isle of Man. I'd have to go for the most basic option as I'm unable to contribute 500USD per month they said is the minimum for the account with an investment portfolio. (I think this is the language the advisor used). 

If anyone is in a similar boat or has advice, please get in touch. I'd really like to know the best way to save for the future in my current situation. 

Thank you!  

Bostonerimus1

Do you understand cross border taxation wrt IOM and Greece? What will be the costs of investing in IOM are any relationship with Titan? You are probably better off investing locally. Also I read that there is a mandatory private pension scheme in Greece in addition to the public system...is that right? and are you contributing to that? You are a Greek resident so do what most other Greek residents do.

poseidon1

leedsathens said:

Hello, 

I'd really appreciate some guidance from anyone in a similar situation.

I have been living and working in Greece since 2021. I'm 38, have 17 years of UK state pensions contributions (which I'm still contributing to at around £170 per year), around 7 years of contributions in the UK Teacher Pension Scheme and since 2021 I've been contributing through Greek social security to the Greek state pension. My income is modest, so I would only be able to contribute about 100 euros per month to some kind of savings/private pension. Because of Brexit, I'm not longer able to contribute to a UK private pension and I don't want to contribute to a Greek one because  I don't rate Greek banks and I doubt I'll retire here (although you never know). I'm also in the process of buying a small apartment to live in in the centre of Athens with a mortgage. This could be rented out in the future.

Most of the companies out there that advise expats on retirement planning are either only interested in high net worth individuals or people closer to retirement age who already have large pension pots. I did find one company - Titan Wealth Management - who have recommended types of savings or investment accounts in the Isle of Man. I'd have to go for the most basic option as I'm unable to contribute 500USD per month they said is the minimum for the account with an investment portfolio. (I think this is the language the advisor used). 

If anyone is in a similar boat or has advice, please get in touch. I'd really like to know the best way to save for the future in my current situation. 

Thank you!  

An alternative viewpoint of where you have chosen to live and potentially retire can be gathered by the link below

https://www.europeanpensions.net/ep/A-Greek-tragedy.php

14 years on from this 'Greek Tragedy' the resulting fallout has left Greek pensioners bottom of the league table - see link

https://www.tovima.com/society/greek-pensioners-among-worst-off-in-eu-study-shows/

You indicate your employment income is modest, so as you have already discovered financial/investment advisory firms for the ex pat community do not address your demographic by way of products or services for low earners.

I would offer the view that at age 38 you are now entering your peak earning years and ability to accumulate wealth, but have chosen to do so in one of the worse countries in europe ( from a fiscal perspective).

Evidently Greece held some appeal to you in other aspects, otherwise presumably you would not have made the move, but as a modest earner in a country still suffering from the fallout from 2008 financial crash, you have not given yourself many options for a secure financial future.

Horrible as it may sound  ( and I would be happy for others to contradict),  your best bet for a secure financial future maybe to return to the UK for hopefully  much higher employment income and potential  ability to save and invest more, notwithstanding the considerable stresses of UK living.

 Having accumulated sufficient in the UK, comfortable retirement to Greece could then be a more (fiscally)  realistic prospect. Many people might say money isn't everything but I think you may agree it helps.

Sam_666

You can still contribute to UK state pension with voluntary contributions from Greece. You got until April this year to fill up any gaps for last 10 years. From there on, you can voluntary contribute for years as you go on.

You cant contribute to UK SIPP because you are not UK tax resident. Nothing to do with brexit mess.

Bostonerimus1

Sam_666 said:

You can still contribute to UK state pension with voluntary contributions from Greece. You got until April this year to fill up any gaps for last 10 years. From there on, you can voluntary contribute for years as you go on.

You cant contribute to UK SIPP because you are not UK tax resident. Nothing to do with brexit mess.

OP says they are paying voluntary NI and it seems to be Class 2 given the cost which is an excellent move.
OP can put into a SIPP at a small level for a few years while not UK resident, but they should look into investing in Greece, even if the options are limited.

leedsathens

Thank you so much for the advice and comments. 

Bostonerimus1 - I don't know anything about cross-border taxation with the IOM. I assume this is significant because money withdrawn to a foreign bank account will be taxed? Is this what you mean? I will definitely find out what Titan charge as part of my research. As far as I know there is no mandatory private pension scheme in Greece, only the state pension which I pay into through monthly social security contributions. Re what most Greeks do - unless they are one of the few who work for a large multinational companies or in the corporate sector and therefore have plenty of surplus income, they only pay into the state pension. I'd like to do more than this. I could certainly research local SIPPs and see if I can transfer any contributions to a UK one if/when I move back to the UK. 

Poseidon1 - You make really valid points and they are the things that can keep me awake at night. However, in Greece I have a rewarding job that I love. I look forward to going to work every day. I can afford to live alone in the capital city. I have a lovely lifestyle, which is aided by the weather (of course!) and the fact that in Greece you can do a lot with a little. I feel physically and mentally well here in a way I didn't in the UK. It's possibly worth mentioning that I'm a secondary school teacher and did that for 10 years in the UK, which meant I progressed to the upper pay scale and what felt to me like a comfortable salary. I know I have a guaranteed, fairly well-paid job (albeit a stressful one) if/when I return. My salary is modest by UK standards, but decent in Greece (certainly not with tonnes of surplus but enough to save a little every month). For me, the aim of this thread is to find out if there's anything more I can be doing right now. What I don't want to do is make a fear-based, difficult-to-reverse decision to return to the UK and end up regretting it. However, thoughts of future financial security (as well as family) are what may well push me to return to the UK in a few years' time.

So just to recap, I have about 7-8 years of contributions in the Teachers' Pension Scheme, 16 years of UK state pension contributions and am continuing to pay voluntary class 2 contributions, I'm in the process of buying a small apartment in the centre of Athens and I'm researching options for paying into a small private pension. 

If anyone has any more advice, perspectives or experience to share on this, I'd be most grateful. Thanks again for the comments so far.  

Bostonerimus1

This is what I was thinking about when I mentioned auxillary schemes

https://www.mercer.com/insights/law-and-policy/greece-introduces-new-mandatory-individual-retirement-account/

So what scheme are you paying into exactly and do you understand it's investments and benefits?

Don't go paying fees to international managers for IOM products without fully understanding the size of the fees and the taxes you might pay and how the investments interact with Greek/IOM taxation and or UK tax if you plan to move back. Actually just concentrate on the first part of that sentence "Don't go paying fees to international managers for IOM products!"

The transfer of DC pension accumulations across borders is just not possible in the vast majority of cases, but tax treaties usually recognize their tax sheltered nature until you start to make withdrawals. You might think about asking at your bank about local saving accounts and investing in mutual funds. I'd do that before going offshore. Keep It Simple.

leedsathens

Thanks very much for this. 

I pay into the public pension through social security payments each month. In the article I believe I pay the first option as I'm too old for the second one (born in 1986). 

So you would recommend a local mutual fund. What about an ETF (have been seeing these mentioned a lot online) or simply paying off my mortgage by 150 euros extra per month and use the flat as a savings pot (there's no penalty for doing this, have checked).  Or investing in a stocks and shares ISA?  

Bostonerimus1

leedsathens said:

Thanks very much for this. 

I pay into the public pension through social security payments each month. In the article I believe I pay the first option as I'm too old for the second one (born in 1986). 

So you would recommend a local mutual fund. What about an ETF (have been seeing these mentioned a lot online) or simply paying off my mortgage by 150 euros extra per month and use the flat as a savings pot (there's no penalty for doing this, have checked).  Or investing in a stocks and shares ISA?  

You are in Greece so you can't put money into an ISA and Greece doesn't recognise them anyway. Given the questions you are asking I'd stick with your social security and saving accounts and maybe a bit extra towards the mortgage for now. Also please don't look at offshore investing as you could get yourself into big trouble. Read about the basics of investment funds (mutual funds and ETFs are examples) and once you have a good grasp you might think about buying some mutiual funds that are free of tax in Greece.

https://www.taxexperts.eu/en/taxation-of-portfolio-income-in-greece/