UK Pensions
 

We are needing advice on our what to do with our UK private Pension.

I have read some thread on here about avoiding using Chase Buchanan.

Any suggestions on who to use?

Re: UK Pensions
 

Personally, I am keeping my SIPP in the UK and investing in low cost global tracker funds/etfs to mitigate currency risk. The QROPs options in Canada are limited and expensive.

Re: UK Pensions
 

It's a conundrum....Financial advisors, qualified and reliable enough to entrust with moving your pension seem few and far between. Expat pension advisory companies touting for business and making unsolicitated contacts are legion and IMHO should be avoided. (Would you want to trust someone with your pension who is a cold caller and you know nothing about?)

Most of the pension conundrum in my mind is whether to move a final salary pension from its provider - getting bought out for a multiple of the annual pension amount - and investing it yourself somewhere vs. leaving it in place and taking the income once you reach retirement age. The former has the benefit of the full amount being available to your estate in the event of your death but the mechanics of how you do it are still unclear to me. Invest it in a self directed plan in the UK as a non-UK resident is evidently possible but not easy. Invest it in some offshore scheme from one of these dodgy pension advisors? Not so much! Te other option ... the official option as it were ... is to move it to a QROPS - Qualified Overseas Pension Scheme, As is posted in another thread, there are only three of these in Canada at the moment. For me the obvious choice would be IA Clarington (as I already have a RRSP with them) but you cant do that until you reach 50. These QROPS schemes are "locked in" schemes which I understand are not so good, but candidly I haven't yet understood why!

If you leave in place and take the income monthly (or whatever period suits) then you are of course subject to the whims of the exchange rate - and really need to retain a UK bank account. The transfer from UK bank account to Canadian is straightforward enough using a service such as Wise.

Re: UK Pensions
 

Leave it where it is, or at very least in the UK, as there are few, if any, countries that do more to protect your pension savings from your creditors (e.g. if you go bankrupt), excessive fees, or your own impulses to tap your pension fund for an "essential" expense.

Re: UK Pensions
 

Like glendem said, you don’t need to use anyone.

Re: UK Pensions
 

I,m still a long way from pension age , but me and the wife had our own sm business for about 10 yrs before moving to Canada - will myself and my wife still be entitled to a UK pension. If yes is there any action i need to take now, like keeping our British passports renewed even though we have Canadian passports for travel.

Re: UK Pensions
 

You may want to keep your NI contributions going so as to increase your eventually pension.

Re: UK Pensions
 

As above, your passport makes no difference - UK pensions are based on your contributions, so you can continue to make voluntary contributions if you want to receive a full UK state pension.

Re: UK Pensions
 

Voluntary Class 2 contributions are a great idea to consider, will help to top up your entitlement at low cost

Re: UK Pensions
 

Thank you for your replies.- we moved here in 2006 but had sold our business in 2005. So we only paid contributions upto 2005. Whats the procedure to start making voulntary contributions and can they be backdated to 2005.
We honestly don,t know anything about the contributions or pension system.

Re: UK Pensions
 

Brief conversation with the one who must be obeyed, she went to the UK government pensions website and printed off the forms for Class 2 contributions and sent them to the UK. Took a while but I'm guessing the Covid situation didn't help.

Re: UK Pensions
 

You need to contact the International Pension Centre at the Department of Work and Pensions in Newcastle. They will answer all your questions, they are very helpful.

Note, the default for voluntary contributions is Class 3, currently at around £730/year, which is a pretty good deal, but you need to request approval to be allowed to make Class 2 contributions, currently at around £155/year, and you will be sent the form to apply for Class 2 .... unless you can do that on-line these days? :unsure: ETA per SaskRuss above, apparently you can download and print them from the DWP web site these days,

Re: UK Pensions
 

Download, print and send, my wife just sorted hers out :)

Re: UK Pensions
 

Regarding paying for missing NI contributions...
my thoughts are that the ~ £7-800 per year you are required to pay would be better off invested in a Canadian RSP if you are thinking of retiring in Canada.
Don't forget that the UK state pension won't be index linked once you start drawing it and that ~ £160 PW you draw at 67 won't buy much when you are still drawing the same amount at 80...
Also, as pointed out above, at least an RSP allows you draw it whenever you want (plus it has its own tax benefits)
Of course, if you're already maxing your RSP and still have ~£700 a year to put into your retirement, it might be worth it

Re: UK Pensions
 

Class 2 contributions are only £155-ish/yr.

The "draw it whenever you want" isn't necessarily a plus when the purpose of pension investment is saving for retirement (see my earlier post about tapping pension savings for an "essential" expense).

But you're right, if you have the money to do both, then doing both is the optimal strategy. :)

Re: UK Pensions
 

Any idea when Class 2 or 3 apply? I was quoted ~ £700 when I investigated this a couple of months ago...so I presume I only "qualify" for Class 3...

Re: UK Pensions
 

Class 3 is the default, it was quoted to me too. You have to _request_ to apply for Class 2. To get the Class 2 rate, it seems to be required that [1] you were working "immediately" before you left the UK, and [2] left for work reasons/ were working "immediately" after you arrived in your new country of residence. The application asks for your employment history before and after you left the UK, but one person on BE was approved, IIRC, after not working for a couple of _years_ after they arrived in their new country, so I am not sure what the logic is. I also don't recall seeing anyone on BE report that they were rejected for Class 2.

Re: UK Pensions
 

For years that you were or are employed of self employed outside of the uk you qualify for the cheaper class 2 contributions. I think that they are cheaper than class 3 because while you are working in the UK your NI payments on earned income pay for more than just your state pension, probably things like NHS and Dole. In 2014 i bought 5 years of class 2 contributions cost about 650 Quid.

Re: UK Pensions
 

Thanks Pulaski, I will contact the International Pension Centre

Re: UK Pensions
 

Thanks Saskruss

Re: UK Pensions
 

Hopefully we are both able to backtrack to 2005 to buy the class 2 contributions

Re: UK Pensions
 

Hi, as someone mentioned above, under current laws your pension from the UK will not get indexed linked as the pension in the UK and various other countries do. However we don't need to roll over and accept it as a fait accompli. The International Consortium of British Pensioners continues to work hard, along with it's partners in various places such as Canada, Australia and the Caribbean to fix this injustice. See britishpensions.com (Canada) and bpia.org.au/ (Australia) for more information. Please consider joining for a small annual fee, they will also help you if needed regarding back paying NI contributions. There is also the Elections Bill going through Westminster - it just had it's second reading in House of Lords. This bill will give the right to vote to all British citizens regardless of how long they've been out of the UK or where they currently live. Hoping we can get many thousands of frozen pensioners to vote for a party whose manifesto includes annual uprating for all pensioners worldwide.

Re: UK Pensions
 

I guess that's what happens if you live in Canada. :rofl:

Re: UK Pensions
 

Just need advice as to the fees / commissions charged by those holding your QROP accounts that you transferred over from UK to Canada and if any other third parties were involved.
I have a private pension in the UK that I need to desperately transfer, but the Pension Company stated that I may have to involve another organization within the UK to aid in the transfer into QROP.
Any advice to this effect?

Re: UK Pensions
 

Desperation rarely needs to good decision making, and IMO pensions are invarably better left where they are. I don't think any country in the world has better protections for pension investors than the UK, espectially to protect people from themselves by prohibting premature withdrawal of savings that were supposed to maintain you during your retirement (and it's this stipulation that makes moving a UK pension investment into a QROPS outside the UK, tricky). Also having part of your pension investments with a different manager in a different country provides additional diversification, which also has very real value.

Re: UK Pensions
 

DON'T DO IT. Just move your pension into drawdown, invest in global stocks to mitigate currency risk and transfer monies via WISE when you need it.

Re: UK Pensions
 

Hi, I transferred a couple of Aviva personal pensions from the UK into a Canadian RRSP account but as there are (were?) time limits on it the RRSP was new, I could not roll it into an existing RRSP. I believe the UK Inland Revenue had to be informed if I withdrew from that fund witin a certain time, I think 5 years. I had RRSPs and TFSA at Hollis Wealth in Ottawa and they handled it for me once I gave them the signed paperwork that I completed after getting it from Aviva. I think it too about 6 months. There was no-one involved and no fees, though there may have been acount closing fees from Aviva but nothing drastic. I did the transfer back in 2015ish.

Re: UK Pensions
 

As per Canadian Regulations when you hit the age of 71 you are required to access the pension whether it is the RRSP or a foreign private pension. But with the UK Pound plummeting it is useless just letting your investments including the pension devalue in the UK. I remember that when I came to Canada in 1992 the value of the GBP Pound was around C$2.40. The only alternatives for me now are transfer into a QROP or SIPP. SIPP seems to be very complicated and by all accounts are not recommended at this stage for me.

Re: UK Pensions
 

Thanks, will have to look into it. But is it legal for a non-UK resident to move Private Pensions into a Drawdown in the UK? But then once again if you are going to access this amount it could be complicated when you are 71 years old. Does it then have to be transferred into a RRIF via a QROP, or is it possible to keep it in the Drawdown?

Re: UK Pensions
 

Those were the good times before 2017 when the UK Govt. ended the direct transfer into the RRSP. Should have transferred all those Funds into my RRSP then.

Re: UK Pensions
 

All of this is a matter of opinion. “Protection from yourself” = nanny state making decisions for you. Like allowing transfer to just 3 Canadian providers, all of them offering poor choice of expensive options; hardly in anyones interest except for British financial companies which get to keep your money for longer.

There are advantages and disadvantages but I find that in Canada you can invest at lower overall cost, which is a major advantage. You can also invest with multiple brokerages within the same country if you are concerned about that type of risk although I would question the wisdom. Holding money in multiple countries makes sense if you are concerned that one of them will collapse.

Re: UK Pensions
 

That is a viewpoint I am very sympathetic to, however when a large majoprity of people don't make adequate provision for their retirement, and the "nanny state" (IOW everyone else, including those who did plan appropriately for their retirement) is going to have to bail them out in retirement with income support, it is arguably a reasonable restriction, to ensure that those who have saved something cannot draw it back out on a whim ..... Perhaps more importantly, under UK law, under most circumstances, the money is protected from creditors if you become bankrupt.

Re: UK Pensions
 

The point about people not saving for retirement and then costing the taxpayer is true but that’s not why UK restricts transfers of pensions abroad. Someone living in Canada is very unlikely to end up on UK income support.

RRSPs are also protected from creditors (under most circumstances).

Re: UK Pensions
 

I didn't say it was. I had moved on to addressing the "nanny state" comment, which is why I cut down the post I quoted to only the bit about "nanny state" and the words either side for context.

The primary reason for restriction on moving UK pension funds overseas is to ensure that the owner can't access the funds prematurely, i.e. before they reach the age of 55.

Re: UK Pensions
 

I think the word you're looking for is can't. You know, minimum wage, zero hours contracts, inconvenient things like that. Of course they can always get a better job. Perhaps apply for a position as CEO or something. Or become an influencer. Make friends with a health secretary and get a multi-million pound contract for something you know nothing about.

The voices of privilege. :rolleyes:

Re: UK Pensions
 

Pension stays in 🇬🇧 and you access the money anytime after 55. Money stays in drawdown until 100% used. Rules for RRSP do not apply to overseas pensions. Make sure you inform HMRC that you live abroad, so that tax is only deducted in Canada. CRA will need to be informed of funds drawn down each year on the annual tax return.