Tax-Free Private Pensions
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chikpea
Posts: 3 Newbie
Hello, I would really appreciate advice on pensions and savings for expats in the Middle East.
I moved to the country in December 2017 from the UK where I was paying into a NHS pension for the last 9 years. I don't know if it is of significance to aiding this conversation, but I have a property in the UK already and no debts.
With an aim to optimise my financial situation while working in this tax-free part of the world, I visited a financial advisor at a well known international (apparently independent) agency. Following a thorough conversation assessing my money situation, I was advised to start an offshore pension which would be tax-free on any money I earn while working in the Middle East and I would then be able to continue paying into on return to the UK - probably in a year or two from now. The specific one recommended was Friends Provident (Premier Advance).
As yet, I haven't committed to this advice as I am concerned about hidden fees, how the money is invested, realistic return, ease of changing value of monthly deposits if required (after initial strict intro period), etc..... Looking online shows some scary reviews and stories of private and tax-free/offshore pensions, but it is so complicated I don't know what applies to my situation or not! I discussed my concerns with the advisor and he did well to dispel them but I know that is of course in his interests to do so.
I would really welcome any advice on how to invest/save money in my situation for easiest and safest return. Are these type of pensions safe (I know there is always some element of risk with investment)? Are these pensions the same as private pensions in the UK with the only difference being the tax-free element? Do they genuinely have a good reputation for return in the way the advisor describes? Will it take years to pay off / see profit after fees?
Many thanks in advance.
I moved to the country in December 2017 from the UK where I was paying into a NHS pension for the last 9 years. I don't know if it is of significance to aiding this conversation, but I have a property in the UK already and no debts.
With an aim to optimise my financial situation while working in this tax-free part of the world, I visited a financial advisor at a well known international (apparently independent) agency. Following a thorough conversation assessing my money situation, I was advised to start an offshore pension which would be tax-free on any money I earn while working in the Middle East and I would then be able to continue paying into on return to the UK - probably in a year or two from now. The specific one recommended was Friends Provident (Premier Advance).
As yet, I haven't committed to this advice as I am concerned about hidden fees, how the money is invested, realistic return, ease of changing value of monthly deposits if required (after initial strict intro period), etc..... Looking online shows some scary reviews and stories of private and tax-free/offshore pensions, but it is so complicated I don't know what applies to my situation or not! I discussed my concerns with the advisor and he did well to dispel them but I know that is of course in his interests to do so.
I would really welcome any advice on how to invest/save money in my situation for easiest and safest return. Are these type of pensions safe (I know there is always some element of risk with investment)? Are these pensions the same as private pensions in the UK with the only difference being the tax-free element? Do they genuinely have a good reputation for return in the way the advisor describes? Will it take years to pay off / see profit after fees?
Many thanks in advance.
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Comments
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The UK is a mature market that is highly regulated and low cost. The middle east and far east are immature markets with virtually no regulation and high cost.Are these pensions the same as private pensions in the UK with the only difference being the tax-free element?
not usually. You often find the ex-pat versions are priced at the same level the UK versions were 40 years ago.
I would say reputation is generally awful. Although without product details given, it is difficult to be specific.Do they genuinely have a good reputation for return in the way the advisor describes?
in the UK, Independent advisers are not sales based. Overseas, they usually still are. So, best to keep a healthy scepticism.I discussed my concerns with the advisor and he did well to dispel them but I know that is of course in his interests to do so.
However, some of your concerns are easily dispelled. e.g. Brexit.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
This one: https://www.fpinternational.com/documents/xim16d.pdf
With this review about all the charges and hidden charges: https://www.aesinternational.com/reviews/offshore-savings-plans/friends-provident-international-premier-savings-plan-review
Hmmmmm.... I think you're right to be sceptical. I wonder how much commission your adviser would get?
If you're only planning to stay a couple of years, you want to be particularly careful of investing anything described as medium/long term and where their could be penalties and high charges if oyu stop paying in after a couple of years.0 -
Are you clear on your UK tax residency status? You are still UK Resident...
I'd be circumspect about any financial product being offered in the Middle East, it's rife with 'advisors' ripping expats off, and there are many, many horror stories about being locked into long term contracts with outrageous up-front, ongoing and exit fees.0 -
The point of a pension is to defer or avoid tax. How much tax would you be deferring or avoiding, and at what cost?Free the dunston one next time too.0
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LauraAWaddell wrote: »Hello, I would really appreciate advice on pensions and savings for expats in Qatar.
I moved to the country in December 2017 from the UK where I was paying into a NHS pension for the last 9 years. I don't know if it is of significance to aiding this conversation, but I have a property in the UK already and no debts.
With an aim to optimise my financial situation while working in this tax-free part of the world (i'm a healthcare worker), I visited a financial advisor at a well known international (apparently independent) agency. Following a thorough conversation assessing my money situation, I was advised to start an offshore pension which would be tax-free on any money I earn while working in Qatar and I would then be able to continue paying into on return to the UK - probably in a year or two from now. The specific one recommended was Friends Provident (Premier Advance).
As yet, I haven't committed to this advice as I am concerned about hidden fees, how the money is invested, realistic return, effects of the likes of Brexit, ease of changing value of monthly deposits if required (after initial strict intro period), etc..... Looking online shows some scary reviews and stories of private and tax-free/offshore pensions, but it is so complicated I don't know what applies to my situation or not! I discussed my concerns with the advisor and he did well to dispel them but I know that is of course in his interests to do so.
I would really welcome any advice on how to invest/save money in my situation for easiest and safest return. Are these type of pensions safe (I know there is always some element of risk with investment)? Are these pensions the same as private pensions in the UK with the only difference being the tax-free element? Do they genuinely have a good reputation for return in the way the advisor describes? Will it take years to pay off / see profit after fees?
Many thanks in advance.
What income tax do you pay in Qatar?Thus the old Gentleman ended his Harangue. The People heard it, and approved the Doctrine, and immediately practised the Contrary, just as if it had been a common Sermon; for the Vendue opened ...THE WAY TO WEALTH, Benjamin Franklin, 1758 AD0 -
FatherAbraham wrote: »What income tax do you pay in Qatar?
There are no taxes whatsoever in Qatar.
However UK Income Tax and NI may apply, depending on one's UK Residency status...0 -
I am a Qatar resident and non-resident of the UK - confirmed with HMRC.0
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LauraAWaddell wrote: »I am a Qatar resident and non-resident of the UK - confirmed with HMRC.
Nope, from your original post you are provisionally UK non-resident until 6th April 2019 at the earliest, when you might pass the Automatic Overseas Test if you've worked full time for a full tax year and limited your days visiting or working in the UK. See HMRC RDR3.
If you return permanently to the UK before then, you will be liable for UK income tax and NI on your worldwide earnings, as though you had never left the UK.
Residency status can be complicated and expensive if you get it wrong...0 -
Hi, thanks for your reply. Yes I am aware of the Uk residence status rules but am fully on track to be non-resident for April 2019, initiating split year treatment when I left last year.0
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