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DB pension holders should move fast to transfer to QROPS
| Published: | 12 Jun at 6 PM |
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Those planning retirement overseas and expats already receiving defined benefit pensions need to act fast if transferring to a QROPS is on the agenda.
This year’s March budget shakeup removed the necessity of purchasing an annuity with your pension pot, allowing the full amount to be taken out and reinvested. However, reports that those in defined benefit schemes might not be included were rife.
The Chancellor stated that a consultation would take place on the issue of banning those on DP pensions from transferring their pensions at all. The consultation finished today, and the final decision will be announced on or before 22 July.
Many UK expats living overseas would be hard hit by the disallowing of transfers, and those looking to retire abroad would also be affected. Since the budget, enquiries about transferring a DB pension overseas have increased by 33 per cent.
Although experts fear the ban, if announced, may be made retrospective, it’s very unlikely that it would affect transfers already in progress. It’s also possible the exceptions might be made for those already overseas, but there’s no guarantee, hence the need to move fast.
Should exceptions not be allowed, an EU law introduced in 2004 should help those affected to make the change in spite of the government’s stance. Comments in last week’s Queen’s Speech give the possibility of another government option as a new form of pension structured as a collective DP scheme, thus making the issue even more complicated.
This year’s March budget shakeup removed the necessity of purchasing an annuity with your pension pot, allowing the full amount to be taken out and reinvested. However, reports that those in defined benefit schemes might not be included were rife.
The Chancellor stated that a consultation would take place on the issue of banning those on DP pensions from transferring their pensions at all. The consultation finished today, and the final decision will be announced on or before 22 July.
Many UK expats living overseas would be hard hit by the disallowing of transfers, and those looking to retire abroad would also be affected. Since the budget, enquiries about transferring a DB pension overseas have increased by 33 per cent.
Although experts fear the ban, if announced, may be made retrospective, it’s very unlikely that it would affect transfers already in progress. It’s also possible the exceptions might be made for those already overseas, but there’s no guarantee, hence the need to move fast.
Should exceptions not be allowed, an EU law introduced in 2004 should help those affected to make the change in spite of the government’s stance. Comments in last week’s Queen’s Speech give the possibility of another government option as a new form of pension structured as a collective DP scheme, thus making the issue even more complicated.
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