Opting back into Serps if I live abroad

senrabbit

hi

can anyone tell me what the benefits are of opting back into SERPs if the following applies:
a) I dont live in the UK anyone and am unlikely to return in the future.
b) I dont work in the UK and therefore cannot contribute to my private
pensions which are both worthless anyway.

My so called pension provider Standard Life has just written telling me that they will automatically opt me back in from April 07 (I think they meant April 08). Not sure how this will affect me in either postive or negative way.
I am looking to cash in my two small worthless pensions (see other posting on this subject) if I can one is with SL the other with the Teachers Pension Fund. They forget to tell you either verbally or in the written format that should you get sick in the UK you are not eligible to pay into a private pension fund. In my case it means that I shall never be able to pay into them again, so they both become worthless but still attract the annual "management" fee. hope you can help

dunstonh

can anyone tell me what the benefits are of opting back into SERPs if the following applies:
a) I dont live in the UK anyone and am unlikely to return in the future.
b) I dont work in the UK and therefore cannot contribute to my private

You are not contracted out on anything other than on paper. You have to be employed and earning in the UK to be contracted out.

My so called pension provider Standard Life

Why the negativity? Nothing wrong with SL as a provider.

Not sure how this will affect me in either postive or negative way.

no impact at all.

I am looking to cash in my two small worthless pensions (see other posting on this subject)

You cant.

They forget to tell you either verbally or in the written format that should you get sick in the UK you are not eligible to pay into a private pension fund.

Thats because you can pay into a pension if you are sick. You are allowed to contribute upto £3600 a year or 100% of income whichever is higher. So, off work sick with no pay would still allow you £3600 a year.

so they both become worthless but still attract the annual "management" fee.

Of course they attract an amc. How do you expect them to invest it if they dont. Savings accounts have an implicit charge as well. Everything either has an implicit or explicit charge.

EdInvestor

Your teachers pension will be revalued up to match inflation or 5% until your retirement, so is unlikely to be worthless.

You may also like to check your state pension, many expats pay the very low class 2 contribution (about 2 quid a week) to be able to claim the basic state pension at retirement, as it's an absolute bargain.

After October, you may like to think about moving your SERPs pension to a cheap online SIPP and managing it yourself, no doubt you will be able to do better than SL if you pick a provider with low charges.

dunstonh

After October, you may like to think about moving your SERPs pension to a cheap online SIPP and managing it yourself, no doubt you will be able to do better than SL if you pick a provider with low charges.

That is wrong. SL charges will be lower than a SIPP on like for like basis.

Plus, the OP is overseas so the SIPP provider would have to be one with passporting arrangements. Having just taken a look at HL's website, they confirm that you need to be resident in the UK to take their product. Sippdeal doesnt appear to say anywhere whether you do or not. There is no mention of them holding the required passporting licence to allow ex pats to transact with them under MiFID.

seven-day-weekend

Why do you think your Teachers' Pension is worthless?

It will rise in line with inflation until you can draw it (55 at the earliest).

And I agree with the above poster - if you do not have enough NI comtributions for your full State Pension you can either pay voluntary or seolf-employed whilst you are abroad.

I live abroad and had two more years to pay to get full Pension, so I have paid some Voluntary Contributions.

EdInvestor

dunstonh wrote: »

That is wrong. SL charges will be lower than a SIPP on like for like basis.

They may be, but a SIPP offers a far larger range of investment options, not just funds, so just comparing fund charges misses the point.It will also offer much better quality funds.Also, expats usually find it far easier to manage a pension via an online SIPP than to go through an old fashioned lifeco used to dealing with IFAs, where admin and customer service is usually diabolical.This is bad enough if you're onshore, but hopeless if you're a long way away in a different timezone.

Plus, the OP is overseas so the SIPP provider would have to be one with passporting arrangements.

If Sippdeal isn't taking foreign clients directly you can probably access them via Selftrade, which does take expats. www.selftrade.co.uk

dunstonh

They may be, but a SIPP offers a far larger range of investment options, not just funds, so just comparing fund charges misses the point.

Valid points. However, around 90% of SIPPs sold post A day are utilising investment funds. So, statistically, that is where the money is going to end up.

If Sippdeal isn't taking foreign clients directly you can probably access them via Selftrade, which does take expats. www.selftrade.co.uk

Are you aware if Selftrade would sign off on an Teachers pension scheme transfer which is almost certainly going to be the wrong thing to do?

Whislt PPPs have tended to put blocks on Final Salary scheme transfers, it is a little unclear whether SIPPs have.

EdInvestor

dunstonh wrote: »

Are you aware if Selftrade would sign off on an Teachers pension scheme transfer which is almost certainly going to be the wrong thing to do?

I don't think anybody is suggesting this, are they?

BTW Hargreaves Lansdown's website does not state it doesn't accept expat clients, so I would call/email them to check.

https://www.h-l.co.uk

dunstonh

BTW Hargreaves Lansdown's website does not state it doesn't accept expat clients, so I would call/email them to check.

It had it in their eligibility section.

EdInvestor

dunstonh wrote: »

It had it in their eligibility section.

This only refers to eligibility to contribute to a SIPP, not to run a transferred in SIPP which is no longer taking contributions. They indicate that expats who have been overseas for less than 5 years can still contribute, which suggests they do take expats.

Cook_County

We don't know where the questioner lives.

There may be domestic tax advantages or disadvantages to retaining the UK pension, treaty advantages to maintaining the UK pension or the option to transfer to a QROPS in the new home country.