Expat pensioners, 2015 UK budget
#1
BE Forum Addict
Thread Starter
Joined: Jul 2003
Location: Finally moving!
Posts: 1,236
Expat pensioners, 2015 UK budget
UK Budget 2015. The points that affect expats | Financial Planning in the UAE
Does anyone know/understand what the last paragraph is about?
I think it relates only to private pensions and not state pensions, earnings related, superann and all that. But I'm not certain.
... It was announced that Class Two National Insurance contributions for self-employed are to be abolished in next the Parliament. This is the class of contributions that is paid voluntarily by many expats in order to continue accruing qualifying years for the UK State Pension. This is a significantly lower amount than the Class Three contributions that are the other option.
UK Pensions [for expats]
The lifetime allowance for pension savings that can be accumulated free of tax will be cut from £1.25m to £1m from April 2016. The amount will then increase in line with inflation from April 2018.
The proposed “pension freedom” changes have now come into effect and this means there Pension unlock are far more options in respect of how people can take their pension benefits. Many people will have the right to take their pensions as a cash lump sum. This is more complex an issue than it initially appears as the money will not be free of tax and I will shortly be posting a separate article explaining the changes and implications. ...
UK Pensions [for expats]
The lifetime allowance for pension savings that can be accumulated free of tax will be cut from £1.25m to £1m from April 2016. The amount will then increase in line with inflation from April 2018.
The proposed “pension freedom” changes have now come into effect and this means there Pension unlock are far more options in respect of how people can take their pension benefits. Many people will have the right to take their pensions as a cash lump sum. This is more complex an issue than it initially appears as the money will not be free of tax and I will shortly be posting a separate article explaining the changes and implications. ...
I think it relates only to private pensions and not state pensions, earnings related, superann and all that. But I'm not certain.
#2
BE Enthusiast
Joined: Feb 2014
Posts: 592
Re: Expat pensioners, 2015 UK budget
The last paragraph of the quote relates to the new changes that came into affect 6 th April 2015 where you can now access your funds as a 100 % lump sum from the age of 55.
There is no longer the requirement to take a compulsory annuity.
Previously you could take the pension as a 25 % lump sum tax free and the remainder as a taxable annuity.
From the 6 th April you can take it as a lump sum however 25 % will be tax free and the other 75 % of the lump sum will be taxable.
It only relates to private pension and the like and does not apply to the State Pension.
State Pension entitlements are not affected.
Lastly, there is still the option to transfer UK private funds and the like as a lump sum to other countries however since 6 th April 2015 it has not been possible to transfer to a number of overseas funds that previously did accept UK Transfers.
I hope that helps
There is no longer the requirement to take a compulsory annuity.
Previously you could take the pension as a 25 % lump sum tax free and the remainder as a taxable annuity.
From the 6 th April you can take it as a lump sum however 25 % will be tax free and the other 75 % of the lump sum will be taxable.
It only relates to private pension and the like and does not apply to the State Pension.
State Pension entitlements are not affected.
Lastly, there is still the option to transfer UK private funds and the like as a lump sum to other countries however since 6 th April 2015 it has not been possible to transfer to a number of overseas funds that previously did accept UK Transfers.
I hope that helps
#3
BE Forum Addict
Thread Starter
Joined: Jul 2003
Location: Finally moving!
Posts: 1,236
Re: Expat pensioners, 2015 UK budget
Thank you, it does.
I know a retired former expat (now returned to England) who infuriatingly receives total pension benefits of a very few (like about 15) pounds per year too much to qualify for a whole raft of benefits (worth a lot more than 15 quid). By taking 25% lump sum of the small private pension presumably the annual income would drop by at least 15 pounds a year and so qualify.
I know a retired former expat (now returned to England) who infuriatingly receives total pension benefits of a very few (like about 15) pounds per year too much to qualify for a whole raft of benefits (worth a lot more than 15 quid). By taking 25% lump sum of the small private pension presumably the annual income would drop by at least 15 pounds a year and so qualify.