Hi

I'm facing an unexpected issue collecting my UK private occupational pension because I also made AVCs.

Personal situation:

1. Dual UK/US citz, paid into UK pension for 13 years until moving permanently to US in 2022. Also paid AVCs to same pension management company.
2. Late '24 et up lump sum/monthly payments from pension to star March '25. All confirmed OK by Aon, pension management company.
3. Retired March '25, expecting lump sum and monthly payments to start. Nothing happens.
4. Called Aon, and the told me that I cannot receive main pension benefit unless:
   1. AVCs also collected at the same time, and that
   2. I can't take AVCs directly. They must be transferred to an external approved scheme.

So, here I am stuck not being able to get my regular pension unless I create a new financial relationship with an organization in a country where I don't live.

Questions:

1. Has anyone here faced the same problems, and do you have any tips to share?
2. Any recommendations for finding a suitable scheme to transfer to.

If it helps, my sister lives in Scotland, so I can provide a UK mailing address to any institution if necessary.

BE has never failed me in the past, so here's hoping you can continue to bat 1.000

Nettie

As a US citizen (or resident) I doubt you will find any UK pension or SIPP provider willing to open an account for you. If you have an existing account they may or may not accept a transfer in. Otherwise if your existing provider is telling you that you need to transfer to an approved scheme then your options are probably to transfer a UK licensed International SIPP, most of which will accept a transfer from a US resident with a UK pension and there are quite a few to choose from; or to purchase a UK annuity with the funds.

I would go back to your provider for clarification. Explain to them that as a US Citizen there are no UK pension providers who will accept you as a client and therefore the option to transfer to an external approved scheme does not exist. At that they may suggest purchasing an annuity which I believe is possible as a USC and that may be your simplest option. It is very unusual not to be able to cash out an AVC pension, unless it is a defined benefit AVC, the pot value is over £30,000 and/or you are under age 55. Do one of those situations apply?

I would not try to cover up being a USC and resident by using a fake U.K. address (even your sisters). You are likely to get tripped up at some point in the process, making a bad situation much worse.

Thanks for the input, most appreciated.

Regarding your final question - none of those applies.

I'll look at setting up a SIPP (whatever that is - off to do some research...)

If there is any more info or advice from anyone here, it would be appreciated

More info for anyone interested in this journey. It looks like by far the most convenient company for me to work with is going to be STM Group/Novia Global.

Does anyone here have any experience with them?

I'm going to start the process and document in here, in case it will help anyone else.

A SIPP is basically a self invested pension pot. It preserves the tax advantages of a pension but allows self investment into a wide range of investment funds. You can withdraw as much or as little as you like on a regular scheduled basis, or on a random lump sum basis once you reach age 55. An international SIPP is almost the same as a domestic SIPP with similar UK protections. The key difference is that an international SIPP has a different range of investment funds, but because of this it is open to USC/US residents whereas domestic UK SIPPs are now closed to new accounts for USC/US residents. An international SIPP typically has higher charges. Some require that you use a licensed advisor as an intermediary, some allow direct investment. They both accept transfers from UK pensions, and most UK pensions will transfer into both.

I had an International SIPP with NOVIA Global for a year or so. I am pretty sure they require the use of a financial advisor as an intermediary. That is annoying on two fronts. One there is an additional set of fees, and two all financial investments and changes must be made by the financial advisor. While you can direct the investments you must do so through the financial advisor thus inserting a delay into the process, along with the extra charges to pay the advisor.

With those limitations they were fine. They had a decent range of investments, but I used them as a means to an end. For different reasons to yours they were one of the few options open to me for a particular pension pot that I later transferred to AJBell. AJBell (along with all other UK SIPP providers) will no longer open SIPPs for US residents/USCs so that is no longer an option.

If I could have, I would have chosen a SIPP that allowed direct investment investment. https://www.myexpatsipp.com was the best one I could find at that time, several years ago but things may have changed since then.

I believe things have changed with NOVIA - their latest document seems to indicate that you can do self-directed self-investment.

For me, this is simply a way to unlock my main pension, so I just want to get in and out as quickly as possible. My AVCs are ca. 10% of my main pension, and I want to unlock that. Luckily, my wife has a defined benefits US pension worth well into six figures, so we are not pushed to make things happen too quickly. And WA is a community property state, so there is little/no divorce risk

I would double check the literature that you have on NOVIA Global. They still only deal with licensed financial advisors. They provide individual clients with an account that enables you to view current and potential investments, but only a licensed financial advisor can open an account on your behalf, make the initial investment, withdraw funds, and switch investments. You can self direct the investments, but only by directing the advisor who then works at your direction. I don’t think you will find any way to open an account with NOVIA Global without one.

I would love to be incorrect on this, but see nothing in their current literature or web site that would change the above. If you just want to get access to all of the funds, immediately then I would definitely look at the International SIPPs that work directly with individuals. I wouldn’t mention that you want to withdraw the funds immediately, they will be less inclined to work with you because they won’t make any money. In any case check with each provider you are interested in on the minimum amount required to open an international SIPPs. Some (many?) may have a minimum transfer amount, and a pot less than £30,000 may be beneath that limit.

Thanks. I'll call them tomorrow.

Awreet. Spent quite a bit of time on the 'phone with Aon, and they have now agreed that they will include the AVC pot in the payout, thus rendering the requirement for a SIPP nugatory.

Now, how to figure out all the tax implications. And work out how claiming my other two pensions affects everything. I see there are quite a few threads on this, including one currently quite active. Will review those and see what I learn.

Thanks for the advice, Glassgow Girl.

nettie