nofrills

Hello All

I'm thinking of emigrating to Canada, but not sure what I could do with my SIPP and what happens to my UK pension.
If I decided to move would I be able to transfer my SIPP funds to the equivalent Canadian provider, how easy/difficult would that be?
Regarding the UK state pension.
From what I've researched so far, if decided to move to Canada your UK contribution stays at the level you've stopped contributing/move to Canada, am I right?
So, let's say when I reach my retirement age in 20 - 25 years time I would be able to get my pension at 2017 prices, providing I left the UK in 2017, and obviously this would be only part of state pension as I have not contributed for the full 30 years period, in fact it is much less than that.
Would I be able to keep contributing to the UK state pension for the next 20-25 years while not residing in the UK anymore but in Canada, and what if so, what minimum monthly payment would need to be?
If I contributed to the UK state pension for the next 20-25 years would be inflation adjusted when I reached my retirement age?

What's the Canada's equivalent of state pension, is it any good?
How many years do you need to contribute to get it?
Do Canadian companies offer and protected pensions, or maybe some pension contributions?

Many specific questions, but I guess it is better to research this subject before making the move than finding out later things were not as expected.

Thank you

Steve_

Look up QROPS on the web. But regardless, I'm not sure it really matters, SIPPs are recognized under the tax treaty and there's nothing to stop you from investing in something denominated in USD or CAD inside the SIPP.

The Canadian equivalent is an RRSP and you would want to set up one of those after you immigrate.

How the State pension works is you file a P85 when you leave the UK then fill in HMRC form NI38 and make voluntary contributions. At the moment they're Class 2 and are basically bugger all (£145 a year) but Class 2 will be scrapped in 2018 and after that I assume it will be Class 3 which is significantly more.

Canada has three schemes for pensioners, Old Age Security, which you get based on how long you've been resident, it's not much and they can claw it back if your income is too high when you hit 65+. You have to be resident for 40 years to get the full amount and that's calculated when you're 65.

The main bit is the Canada Pension Plan, which requires you to pay in for 40 years to get the full amount, they take a maximum of $2,544 (2016) out of your pay and you can claim from the age of 60 to 70 iirc, but the maximum payout is usually around $13,000 pa. It is about to be reformed and they're going to up the contribution level and you will get a higher payout. The main thing about CPP is that you get something even if you've only paid in for a few years.

The final one is the Guaranteed Income Supplement for people on low incomes.

Hardly anyone outside the Govt. has proper old-fashioned defined benefit pension plans anymore. There are various vehicles that are used, co-contribution to your RRSP, company-run RRSPs, Pooled Pension Retirement Plans (PRPPs) which haven't really caught on yet, and Locked-In Retirement Accounts (LIRA) which are like RRSPs but you can't make early withdrawals, ergo the funds are "locked in". Say you have a pension plan, your contributions via your employer are put in the LIRA when you leave and you have no access to them until you hit 65.

You have to make withdrawals by the time you're 71 or convert it to an annuity, i.e. how SIPPs used to work. An RRSP becomes an RRIF and a LIRA becomes a LIF.

nofrills

Hi Steve

Thank you for replying. I will have a few more questions if you don't mind, will try to find some time over the weekend to type them.
Thanks

Edo

Sorry to hijack your thread nofrills.

So Steve, has the government confirmed that they are going to scrap Class 2 in 2018? I know there was a talk of scrapping it but nobody knew when.

I am thinking of registering for Class 2 which is one of the important things on my list but just haven't got round to it. May be its a good time to do it now since the GBP has taken a nosedive against the CAD.

So I am guessing if you register for Class 2 before 2018 then your contribution rate will stay the same right? Or will they go up per the next Class? And also what will happen to the payout at retirement?

Steve_

April 6, 2018, no more Class 2.

Whatever NI rate you're paying the basic state pension remains the same.

The guidance on the DWP website was incredibly vague I have to say. Unlike in America where they blind you with bureaucratic speak, in the UK they dumb everything down so a moron can understand it, so the guidance is very vague.

They will no doubt between now and then send you a letter with more information. But yes, sign up now if for no other reason than you can go back six years to pay arrears and at the moment it's only £145 a year.

http://britishexpats.com/forum/usa-5...-854773/page2/

Edo

Thank you for answering my question Steve, and some great discussion on the other thread

Do you know how many years of minimum contributions you have to make into the NI before leaving the UK to qualify for full pension at retirement (considering you contributed through Class 2 as an expat until retirement)?

Club Soda

Hi Ladies and Gents,

This is a really interesting thread as I'm currently working in Canada and have more or less the same requirements as nofrills has, but a little bit more besides. Not sure if I should start a new thread or add to this one, but here goes:

I'm not planning to add to my UK SIPP but I want to get at the funds as tax efficiently as possible upon retirement. I also want to change SIPP providers in the UK as I want to invest in some funds that aren't listed with my current provider. I was lead to believe that I can't have a SIPP in the UK now that I'm in Canada, but one of the posts above says that it is possible to do this.

Could anyone point me in the direction of an HMRC webpage that would clarify this, or to a reputable company either in Canada or the UK that could help with this and other investment queries?

Many thanks.

mjwalker007

As far as I am aware there is no restriction on you holding a existing SIPP in the UK if you are resident in Canada.


Where you may have an issue is if you try and change SIPP providers , as you are no longer resident in the UK. I would suggest speaking with your SIPP provider to find out exactly what you can or cannot do as you are now residing in Canada.

Mike Gas

Hi
Sorry to jump in on this thread but is related. I phoned HRMC and received a pension statement from them a few weeks ago.
After reviewing this I gave them a phone call to see if I could top up my pension from Canada, the service agent was quoting my 600-700 pounds per year .

I take it this is for class 3 and Not for class 2, Question is can I pay class 2 and if so how?
Thanks in Advance.

Steve_

You can hold onto your current SIPP, what restrictions there are on withdrawals I'm not terribly familiar with but it's the lump sum payment that usually causes the problem, because it's not periodic and there's no equivalent to it in Canada.

You can't open a SIPP now you're resident in Canada for tax purposes, look at opening an RRSP. It works in reverse, you can keep the RRSP if you move back to the UK. There is a 25% withholding tax on withdrawals from an RRSP by a non-resident, but the tax treaty reduces the rate to 0% for periodic withdrawals.

Like I said, you need to look into QROPS if you really want to get clever about this. It depends on where you plan on living when you retire.

Steve_

Tell them it's Class 2, you should qualify. You can go back six years.

Club Soda

Thanks Steve. There are a couple of funds that I want to invest in which are UK based. Do you know of an RRSP that will let me do that? All of the mainstream ones that I've seen from banks, etc, only permit funds that they have on their list - CIBC xxx Fund, RBC yyy fund for example.

JonboyE

You can look into a self-directed RRSP. See if your local credit union will act as the RRSP trustee for you. They will charge a fee for this - typically $250 a year around here. You are not restricted to credit union investment products and can hold any qualifying investment within the RRSP.

Mike Gas

Steve thanks for the reply so how do you go about setting up payment, can you do this by phone or do you have to fill a form?

Hurlabrick

There are a few 'self-directed' products on the UK ROPS list here:

https://www.gov.uk/government/public...-notifications

I assumed these were Canadian versions that acted as 'wrappers' and allowed you to make your own fund choices, but I wasn't /am not certain - not something that I am into......