Genesis

Met a Pension expert recently and I have the following info. for those who were unaware of the facts below like me. If you have a UK pension you can transfer it to NZ in a lump sum (calculated by your pension supplier) tax free. So long as you have had five FULL tax years out of the UK you can then take up to 49% of the fund..the rest you have to wait until aged 60 which can then be taken s a lump sum tax free again. The money that you are waiting for until 60 wether its the full 100% or 51% is accruing value in a managed account. The benefits of this are that if you wait to draw your UK pension from the UK it will be taxed once it gets here at the prevailing rate...that is assuming you declare it. One assumes you would. So by doing it this way the pension is tax free and you can access funds earlier. The only downside is that if you kept your UK pension and you lived to be 90 plus I am sure you would lose out as you would get more this way given that you were drawing your pension for such a long time..even with the tax taken off. You bring your sum to NZ and you can either change the monies into kiwi $ if you like the prevailing rate or you can lodge the money in a kiwi sterling account (which will have no interest) until the rate improves for you. Once the monies are in kiwi $ it then starts earning you money in that managed acct. The whole proces takes up to 5-6 months..sometimes less and costs you nothing until you decide to bring the pension funds to NZ. The charges vary but we have been offered a 3.5% fee for the total amount for 2 pensions and 5 or so smaller AVCs.

Alas you cannot do this yourself so I am led to believe it has to be done thru' a govt. approved QROPS (sp) scheme. Sounds like a good idea to me..but then what do I know?? Finally if you decide having been given the value of the transfer value that you do not wish to go ahead there is not fee whatsoever. The process of explanation and form filling in your own home from a travelling pensions expert takes about 1-2 hours.

BEVS

Nice thread topic and post Genesis.

As everyone knows from previous thread and posts, I dithered about our UK pensions for years.

We are now in the process of bringing them over. As we have been here for 5 full tax years we could access part of the transfer values immediately if we wished. The rest we could withdraw in a few years time without penalty. I should mention we are both 50 and over.


We are bringing the pensions over and they are staying in a GBP account for now because of the exchange rate, or until I get my head around the rubbish rate.

We have on-line access to the accounts & will have on line access once we transfer from GBP to NZD and the pension funds are actively invested.

What I do like about the NZ funds is that it all seems much more flexible.

Here is a link to a BE Article entitled Your UK Pension in NZ. which people may find helpful.

Robbo25

Hi Genesis,

I also believe that you have to get the timing of the valuation of your UK fund correct as they will at certain times try and downplay the value of the "pot" for tax purposes, however this doesn't help you maximise the amount you bring over.

Genesis

Nice one. Any idea when are times to avoid or hit the 'go' button. Knowing my luck (with wedge) it's all down to sods law and I will be well and truly 'sodded' when they do my calculation!!!!! Whatever I am going to bring it over. I might add that in 99% of cases if you have started drawing your pension from the UK its too late to do what this thread is about.

SidNZ

I moved two pensions over around 4 years ago and was charged a flat fee of $5,000 plus the extra that the pension advisor would have got in commission was refunded to me which I re-invested into the pension.

I used these guys "www.ukpension.co.nz" and Carol did exactly what she said she would and was very efficient.

Robbo25

Not sure when mate, if memory serves me right I think they get valued at certain periods and this is common knowledge for financial people so they should know who to avoid. Also I think you can only ask for a valuation either once a year or once every six months, so you don't want to be shooting your bolt too often!

DeborahBenn

I am a financial journalist (for my sins!) and I would urge a little note of caution as there has been a fair amount of confusion over the 5 year rule. Some advisers are giving the impression that after 5 years the QROPS is out of HMRC control. This is not necessarily so. QROPS have to abide by the spirit of the rules which is to give British expats pension benefits to which they would be entitled if they had remained in the UK. Therefore drawing down more cash than the scheme allows at any time may be regarded as an ‘unauthorised withdrawal’. The up shot of this is the pension holder could face a large tax bill and the country where the QROPs is established could be struck off the HMRC database. This happened a while ago to Singapore for alleged QROPS misselling.

Robbo25

Hi Deborah, not sure why you have quoted me as I wasn't talking about the five year rule.

DeborahBenn

bit new to this! I was just fascinated by the whole thread and was commenting on it generally and not specific to your comments. In future I will reply in the right place. Thanks.

JohnThePom

You were fascinated by a thread on pensions??

Yep, you must be a financial journalist!

Good job we're all different because if it was left up to me my life savings would be mouldering in a suitcase... no wait.... shoebox at the back of a wardrobe.

WP

DeborahBenn

Sad I know. So sad I even went on to the HMRC press office just to get official verification and was told "sorry we are in election purdah and can't help. We may be able to help you next week" .... what a joke!

Genesis

Thanks for your input. Are we cool to withdraw monies after 5 FULL tax years out of the UK? I have been told we can take out ONLY 49% max. after the 5 year time limit. The rest has to be left till 60. Please can you confirm this?

BEVS

My understanding is that it is dependant on the rules of the UK pension scheme one is transferring.


Useful reading.

QROPS.

DeborahBenn

As Bev says you need to check on the terms of your scheme but as far as I am aware Qrops do not allow you to draw more than 30% in cash (in some cases 25%) after 5 full (check the dates carefully!) tax years. However, in New Zealand it is more common practise to take out higher cash lump sums and so access to your pension capital is much easier, which is why New Zealand Qrops are offering higher cash withdrawals than 30%. But be warned that the UK's HMRC are looking closely at any loopholes such as this. Guernsey Qrops have recently changed their rules so that you cannot simply encash your pension pot after 5 years, which was what was happening.