There are many types of pension schemes, and understanding their benefits and restrictions, for many, can prove troublesome. Although there are UK Government-backed advice centres, they themselves often direct you to a UK financial advisor, who will not have the knowledge or experience to advise you on what is best for you and your finances in France.
From the 1st January 2021, UK advisers can no longer provide advice to clients that live in the EU, as passporting rights have been removed.
Moving overseas may provide further opportunities not available to those that remain in the UK, and advice can be given on Final salary pension schemes, UK Private Pensions, SIPPs and Qualified Recognised Overseas Pension Schemes (QROPS). We will provide a detailed examination of your existing schemes and advise if a transfer is in your best interest.
So, what are some of the considerations that you need to think about regarding your UK pensions schemes.
- If you are over 55 years of age and your scheme allows you to take your Pension Commencement Lump Sum, it may be advantageous to do so before becoming a French Tax Resident. The 25% tax free allowance is only beneficial to UK Tax Residents, if you pay your tax in France then this payment will be added to other income in the year that it is received and taxed at your marginal rate.
- Does your existing scheme allow for flexible access? Legislation changed some years ago and it is now possible to take as much, or as little, income as you wish from your pension, either as regular or ad-hoc withdrawals. Again, a fantastic tax planning opportunity as this means you can structure your payments and potentially reduce your tax burden.
- Do you know where your funds are invested and what the returns are? Not all schemes are transparent, and it can be difficult to determine what you are paying for and what the performance has been.
- It may also be worth considering amalgamating smaller pensions into one, pulling smaller pensions together can allow more choice on how the pension is invested, reduce running costs and provide wider exposure to underlying investment markets.
The points above are just a small sample of some of the areas that require consideration, there are too many to list here but if you have a UK pension and are unsure on how, or when, you can access it, or what benefits it may provide, contact us for an appraisal of your existing scheme.
This article is based on the opinion of the financial adviser and author, and does not reflect the views of Blacktower. The above information is based on current legislation which is subject to change and does not constitute as investment advice, or investment research and you should seek advice from a professional adviser before embarking on any financial planning activity.
Blacktower Insurance Agents & Advisors Ltd is regulated in Cyprus by the Insurance Companies Control Service and registered with ORIAS in France. Blacktower Financial Management (Cyprus) Ltd is regulated in Cyprus by the Cyprus Securities & Exchange Commission and is registered with the AMF in France.
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