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UK Pensions – Guide Rules from 1 April 2014

UK Pensions – Guide Rules from 1 April 2014

Old May 27th 2014, 11:03 pm
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Default Re: UK Pensions – Guide Rules from 1 April 2014

Originally Posted by RhinoG View Post
Hi Dai, very informative thread. Thanks.
I had a question was regarding my pension - I have two small pensions that have a combined value of less than £18 K. My understanding is that I can withdraw these pensions as a tax free lump sum (in the UK) as they are of trivial amount? Is this correct? Seems too easy...
Hi RhinoG,
Please read this link http://www.hmrc.gov.uk/pensionschemes/small-pen.htm regarding small pensions. Note that the minimum age is 60 and if you are a New Zealand tax payer, you will have to declare any withdrawal or payment to the NZ IRD.
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Old May 27th 2014, 11:53 pm
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Default Re: UK Pensions – Guide Rules from 1 April 2014

Originally Posted by Skin View Post
Hi chc4me

I was considering moving my pensions to Kiwisaver! in your opinion would this be advisable? Thanks for your help. Skin
Hi,
It's difficult to provide you with an opinion on what to do without knowing any information, such as your future plans, when do you what to access the money, your investment preferences (eg GBP / NZD), and so on.
I've written a number of posts on the advantages and disadvantages of Kiwisaver and will recap them here.

A Pension transfer must be made to a Qualifying Overseas Pension Scheme (QROPS). Some schemes are "NZ Superannuation" and some schemes are "Kiwisaver". Not all Kiwisaver providers will accept a UK Pension transfer so you would need to check with your provider.

A transfer into a NZ Superannuation scheme will allow withdrawals from age 55. Kiwisaver has no withdrawals before 65 (and if the retirement age increases, then this will be extended). That's a pretty big advantage/disadvantage.
NZ Superannuation schemes might allow the choice to hold GBP and invest in GBP, thus waiting for a better currency - although currency movements can be a risk that would need to be considered. Kiwisaver has no such choice, the transfer would be converted to NZD on the day of receiving the transfer.
NZ Superannuation schemes may allow you to have input into the investments, including direct shares (eg Genesis Public offer recently) or other investments. Kiwisaver has limited investment choices.

What happens if you were to return to the UK? Kiwisaver could be problematic and could create penalties if not fully aware of the rules issued by the UK Govt. NZ Superannuation Scheme will allow you to plan for changes and give you options.

Generally speaking, a NZ Superannuation Scheme will provide more flexibility and choice.
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Old May 30th 2014, 5:25 am
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Default Re: UK Pensions – Guide Rules from 1 April 2014

Originally Posted by chc4me View Post
Hi,
It's difficult to provide you with an opinion on what to do without knowing any information, such as your future plans, when do you what to access the money, your investment preferences (eg GBP / NZD), and so on.
I've written a number of posts on the advantages and disadvantages of Kiwisaver and will recap them here.

A Pension transfer must be made to a Qualifying Overseas Pension Scheme (QROPS). Some schemes are "NZ Superannuation" and some schemes are "Kiwisaver". Not all Kiwisaver providers will accept a UK Pension transfer so you would need to check with your provider.

A transfer into a NZ Superannuation scheme will allow withdrawals from age 55. Kiwisaver has no withdrawals before 65 (and if the retirement age increases, then this will be extended). That's a pretty big advantage/disadvantage.
NZ Superannuation schemes might allow the choice to hold GBP and invest in GBP, thus waiting for a better currency - although currency movements can be a risk that would need to be considered. Kiwisaver has no such choice, the transfer would be converted to NZD on the day of receiving the transfer.
NZ Superannuation schemes may allow you to have input into the investments, including direct shares (eg Genesis Public offer recently) or other investments. Kiwisaver has limited investment choices.

What happens if you were to return to the UK? Kiwisaver could be problematic and could create penalties if not fully aware of the rules issued by the UK Govt. NZ Superannuation Scheme will allow you to plan for changes and give you options.

Generally speaking, a NZ Superannuation Scheme will provide more flexibility and choice.
Thanks again, I do not intend returning to the U.K., I will check up on options you have mentioned.

Cheers
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Old Jun 18th 2014, 12:59 am
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Default Re: UK Pensions – Guide Rules from 1 April 2014

Hi i have been advised in regard to transferring an NHS pension, that "To make this match your home ownership goals you could transfer to a NZ pension scheme who will let you with draw 25% at age 60 and then convert the funds to Kiwi saver as opposed to a set income." Thus allowing me to use the money to pay off a mortgage. However, I cannot find any other information which states this is possible?
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Old Jun 18th 2014, 1:05 am
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Default Re: UK Pensions – Guide Rules from 1 April 2014

Originally Posted by plent2d View Post
Hi i have been advised in regard to transferring an NHS pension, that "To make this match your home ownership goals you could transfer to a NZ pension scheme who will let you with draw 25% at age 60 and then convert the funds to Kiwi saver as opposed to a set income." Thus allowing me to use the money to pay off a mortgage. However, I cannot find any other information which states this is possible?
NZ QROPS rules allow you to withdraw a certain percentage at a certain age. Each scheme may be slightly different in terms of percentages and age. The scheme that I regularly recommend is permitted to withdraw 30% at age 55, plus any growth that the investments have made since the transfer date, as well as an annual income. (Note if you have been resident in the UK in the last 5 tax years then the percentage is 25% maximum).

What you do with that money is up to you.
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Old Jun 18th 2014, 1:15 am
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Default Re: UK Pensions – Guide Rules from 1 April 2014

Originally Posted by chc4me View Post
NZ QROPS rules allow you to withdraw a certain percentage at a certain age. Each scheme may be slightly different in terms of percentages and age. The scheme that I regularly recommend is permitted to withdraw 30% at age 55, plus any growth that the investments have made since the transfer date, as well as an annual income. (Note if you have been resident in the UK in the last 5 tax years then the percentage is 25% maximum).

What you do with that money is up to you.
Thanks for that but he said "convert the funds to Kiwi saver as opposed to a set income" meaning all the rest?

When i queried this and said what i understood was what you have just stated, he replied "It is not stated as it is simply an out working of the different rules of the various schemes".

I'm confused?
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Old Jun 18th 2014, 1:25 am
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Default Re: UK Pensions – Guide Rules from 1 April 2014

Originally Posted by plent2d View Post
Thanks for that but he said "convert the funds to Kiwi saver as opposed to a set income" meaning all the rest?

When i queried this and said what i understood was what you have just stated, he replied "It is not stated as it is simply an out working of the different rules of the various schemes".

I'm confused?
Just checking ..... you are using an adviser, but want an adviser with more knowledge to answer your questions? Anytime you would like a second option, let me know.

The regulations allow a transfer of a UK Pension from a NZ QROPS scheme to a Kiwisaver (which must also be a QROPS), on or before the age of 65. This then results in the funds maturing at Kiwisaver Retirement age (currently 65 but could increase). Not all Kiwisaver schemes are QROPS, you would need to check with your Kiwisaver provider.
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Old Jun 18th 2014, 1:47 am
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Default Re: UK Pensions – Guide Rules from 1 April 2014

Originally Posted by chc4me View Post
Just checking ..... you are using an adviser, but want an adviser with more knowledge to answer your questions?
I thought that.
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Old Jun 18th 2014, 2:18 am
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Default Re: UK Pensions – Guide Rules from 1 April 2014

Originally Posted by chc4me View Post
Just checking ..... you are using an adviser, but want an adviser with more knowledge to answer your questions? Anytime you would like a second option, let me know.

The regulations allow a transfer of a UK Pension from a NZ QROPS scheme to a Kiwisaver (which must also be a QROPS), on or before the age of 65. This then results in the funds maturing at Kiwisaver Retirement age (currently 65 but could increase). Not all Kiwisaver schemes are QROPS, you would need to check with your Kiwisaver provider.
Yes i have but as he's also from my Kiwisaver provider (though states he's independent) a certain amount of skepticism , i find, is advisable.
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Old Jun 18th 2014, 10:21 am
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Default Re: UK Pensions – Guide Rules from 1 April 2014

Originally Posted by plent2d View Post
Yes i have but as he's also from my Kiwisaver provider (though states he's independent) a certain amount of skepticism , i find, is advisable.
Absolutely agree, I admire your skepticism and the research you have undertaken, it's always healthy to challenge your adviser and to make sure the information is correct. I hope I have answered your question but feel free to ask more.
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Old Jun 22nd 2014, 12:28 am
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Default Re: UK Pensions – Guide Rules from 1 April 2014

Hello,
I came over to NZ in February 2013 on a PR visa. I have an NHS pension which I joined in 1988 and had until I left the UK, with a break from NHS employment of a few years in the middle.
I have no idea of my future plans, but my feeling at the moment is that I'm unlikely to return to the UK, and don't see myself retiring in the UK. Nothing to be proud of, but I'm pretty ignorant about anything financial and am struggling to understand all the info out there. So I wondered how to go about finding reliable financial advice re: transferring my pension over, in simple plain English, and roughly how much would such advice cost?
In the meantime, can I get the ball rolling myself by asking for a transfer value for instance, or should I wait until I've found a financial advisor?

Thanks so much.
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Old Jul 3rd 2014, 10:25 pm
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Default Re: UK Pensions – Guide Rules from 1 April 2014

Originally Posted by clairesw View Post
Hello,
I have an NHS pension which I joined in 1988 and had until I left the UK, with a break from NHS employment of a few years in the middle.
Hi Claire, I've sent you a personal message on this. For general information, following the UK Budget 2014, it has been signaled by the UK Govt that future transfers of Final Salary schemes (NHS, Police, Civil Service etc) are unlikely to be transferable after April 2015. Therefore, if considering a transfer of such a pension, do not delay!! It is common for these types of schemes to take 3 - 6 months which does not leave a lot of time.

It is free to request the transfer value and transfer papers from the schemes in the UK (usually 1 per year), and can be done without the assistance of an adviser. To understand the advantages and disadvantages of any transfer, an adviser that specialises in UK pensions is likely to be beneficial.

All the best.
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Old Jul 5th 2014, 3:26 pm
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Default Re: UK Pensions – Guide Rules from 1 April 2014

Hey mate. I think the answer here is simple and need not be over complicated.
You are only 30, it may be another 30 years before you retire. You will definitely be a different person.
Leave it where it is and don't even think about it. The frozen pension you have will still grow. It is still invested. It is your money still being managed and it is as well leaving it under UK management than anywhere in the world.
Leave it man, let it grow, contribute to other savings vehicles, and enjoy life.
Good luck
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Old Jul 6th 2014, 8:27 am
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Default Re: UK Pensions – Guide Rules from 1 April 2014

Originally Posted by ktyler1961 View Post
Hey mate. I think the answer here is simple and need not be over complicated.
You are only 30, it may be another 30 years before you retire. You will definitely be a different person.
Leave it where it is and don't even think about it. The frozen pension you have will still grow. It is still invested. It is your money still being managed and it is as well leaving it under UK management than anywhere in the world.
Leave it man, let it grow, contribute to other savings vehicles, and enjoy life.
Good luck
Hello,
I'm not sure if this was a reply to my post, but I wish I was 30!! Actually nearly 44, but thanks for making me feel good just for a moment!
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Old Jul 6th 2014, 8:55 am
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Default Re: UK Pensions – Guide Rules from 1 April 2014

Originally Posted by clairesw View Post
Hello,
I'm not sure if this was a reply to my post, but I wish I was 30!! Actually nearly 44, but thanks for making me feel good just for a moment!
I'm nearly 53 and I can gaurentee you there is nothing to worry about.
I am not a financial adviser but I have a long term friend who is a pension specialist. I have been in a final salary scheme for the last 15 years and I recently asked for a transfer value which was currently a modest £100K.
Now, the government changed the rules regarding buying annuities earlier this year. In a nutshell I am no longer restricted to buying an annuity with my pension pot. I can transfer it into something else and, if I wanted, I can get my hands on the whole £100K. I can go out and blow the lot if I want on wine, women and whatever. This would be advantages to me because I am single, no kids, but maybe not if you have a family because a final salary includes an element of life cover. However, if I leave the scheme I would try and leave it where it was because it will still grow.
Also, at the present time transfer values have never been higher. They may get bigger still. Also, it is predicted that the next 15 years will be a 'golden age' for UK pensions in terms of returns.
You can get a transfer value very easily: just get in touch with the trustees or Google NHS pensions transfer and find out how to do it. I got my transfer value just by sending an email and asking for it. I assume your pension was a final salary?
Off topic: I am currently looking into applying for a NZ PR Visa. I just found out the age limit is 56, but they like you to apply before 55.
Glad I made you feel good
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