Pension advice
 

Hello all,
As I have said earlier when asking for advice, Both my wife and I are leaving the UK in the summer to move to Jeddah to teach. What do you know, or what experience do you have about the benefits of taking your pension pot out of the UK when you move. I think the scheme is known as QROPS. With all of the changes to the Teachers Pension Scheme, ie more contributions, the need to work more years prior to being able to retire, taking our pensions out seems to good an offer to miss. Any advice please.

Re: Pension advice
 

Unless you plan never to return to the UK DO NOT take out a QROPS, especially as a transfer from a statutory scheme such as the Teachers Superannuation Scheme.

It's a complex issue and one that only an experienced IFA will really understand. There are valuable benefits in the teacher's scheme that you will lose on transfer so there is unlikely to be any good reason to transfer out (apart from some salesperson making lots of commission).

I'd be surprise if a UK (i.e. properly regulated) adviser would suggest such a course of action as it would never pass compliance checks.

Re: Pension advice
 

I'm not an IFA but I would suspect that the circumstances under which it would be beneficial to transfer out of a defined benefit public sector scheme like the Teachers' Scheme would be few and far between.

Re: Pension advice
 

Well, that sounds very definitive, thanks for the advice. Can I ask for a bit of detail as to why it's such a bad idea, all we are hearing from the government is how they need to find ways of cutting our unaffordable teachers pensions and now the threat of moving from final salary scheme seemed to be another nail in the coffin. I am sure that your advice is sound, can you just tell me a little more about the reasons behind the warnings. Thanks :thumbsup:

Re: Pension advice
 

These plans are not as straightforward as they seem. QROPS have punitive tax charges for people returning to take up UK residence and you cannot just access all of your pensions funds. The charges tend to be high too. In exchange for some 'control' of your own funds you would be giving up government backing, guarantees and an indexed payment in retirement. Your income would be dependent on fund growth.

Sure, governments everywhere are concerned about pension funds, but what you have is safe, at least by comparison to most other arrangements. Everyone needs to make their own provision for the future so you should be doing that whilst abroad (subject to timeframe, tax etc - see my website for useful info) but not at the expense of what you have.

There will certainly be changes to statutory schemes going forward, here will have to be, but existing funds should be pretty much ring-fenced.

Re: Pension advice
 

Thanks for the advice Meow, very much appreciated.

Re: Pension advice
 

:thumbup:

Re: Pension advice
 

Does the same apply for the Armed Forces pension?

Re: Pension advice
 

Service pensions have certain quirks which in some cases can make QROPS of interest - it very much depends on individual circumstances - but I would consider a forces pension to be as secure as public sector ones.

Re: Pension advice
 

:thumbdown:
My OH and I both teach, and have teachers pensions. We too are concerned about the changes proposed by the government recently. We are in the process of trying to emigrate to Oz, and will probably not get out there for 18+months. Would it be best to transfer our pensions when we get out there to a scheme out there? Or leave it where it is? Would it be best to stop paying into it now and save that money instead?
It is such a mine field
We are in our 30's, so have plenty of working life in us. we do not plan on coming back to the UK either....she says!!!!
any comments/advice please?

Re: Pension advice
 

Do not do anything right now! It's unlikely to be advice to give up all the guarantees that the Teachers Superannuation schemes offers.

Re: Pension advice
 

Hi Meow, at the present time here there are so many people pushing the benefits of coming out of the TPS, especially if you are leaving the country. Whereas you seem very unsure of the wisdom of that course of action. Could you tell me the reason for your uncertainty please.
Thanks:unsure:

Re: Pension advice
 

I would suggest that many simply want to make money from you by pushing you into a QROPS. A government backed scheme has guarantees that you will not find elsewhere and whatever changes are made to the TPS it will not affect what you have already built up.

A QROPS is NOT a magic solution, despite what so many incorrectly claim. You cannot access all of your money and there are penalties should you return to the UK.

QROPS is the next big mis-selling scandal in the making.

Re: Pension advice
 

Transferring out depends on each clients individual circumstances.
There are many benefits for some people and many disadvantages for others. There is no one size fit's all approach here as everyone has different salaries, different goals, different retirment destinations etc

There are typically 4 options:
Transfer out to a QROPS
Transfer out to a SIPP based offshore
Transfer out to a UK SIPP

<snip>

Re: Pension advice
 

ooops missed option 4..... Stay put :-)