- Home » Expat News » UK expats in the Gulf fear final salary scheme pension shortfalls
UK expats in the Gulf fear final salary scheme pension shortfalls
| Published: | 17 Mar at 6 PM |
Want to get involved?
Become a Featured Expat and take our interview.
Become a Local Expert and contribute articles.
Get in touch today!
Become a Local Expert and contribute articles.
Get in touch today!
A warning by the UK Pensions Protection Fund that a high number of final salary schemes may be short of necessary funds to pay out amounts due is causing concern amongst UK expats working in the UAE.
Wealth management companies in the Gulf are advising expat clients on the best way to transfer out of occupational pensions which may be at risk. An increasing number of expats working in the region are expressing concern about losing out on their planned retirement funds. Paying in to a final salary pension was intended to ensure that the annual amount received after retirement was linked with salaries paid whilst working.
Many expats working overseas have been paying in for the whole of their working lives and have been planning the financial side of their retirement to ensure they’re well-provided for and financially secure for the rest of their lives. The recently-issued warning by the Pension Protection Fund that providers may have to default, possibly paying only a fraction of the owed amount, is wrecking the plans of UAE expats nearing retirement.
According to a representative of a Dubai wealth management company, final salary payments are somewhat inflexible in that they pay out a set amount annually until death. This inflexibility hampers those who wish to spend more in the first few years after retirement, adjusting to smaller amounts in older age. Given that new UK pension rules allow payments from the age of 55, flexibility as to annual amounts is more important that previously.
Financial advisers in the UAE are offering plans with more flexibility and a similar rate of security, with SIPPs (self invested personal pensions) a preferred option for many. The combination of factors leading to deficits in occupational pensions involves the poor economic climate, longer life spans and less profitable funds, as well as the effects of insecure pension companies raiding their pensions pots in order to stay in business.
Wealth management companies in the Gulf are advising expat clients on the best way to transfer out of occupational pensions which may be at risk. An increasing number of expats working in the region are expressing concern about losing out on their planned retirement funds. Paying in to a final salary pension was intended to ensure that the annual amount received after retirement was linked with salaries paid whilst working.
Many expats working overseas have been paying in for the whole of their working lives and have been planning the financial side of their retirement to ensure they’re well-provided for and financially secure for the rest of their lives. The recently-issued warning by the Pension Protection Fund that providers may have to default, possibly paying only a fraction of the owed amount, is wrecking the plans of UAE expats nearing retirement.
According to a representative of a Dubai wealth management company, final salary payments are somewhat inflexible in that they pay out a set amount annually until death. This inflexibility hampers those who wish to spend more in the first few years after retirement, adjusting to smaller amounts in older age. Given that new UK pension rules allow payments from the age of 55, flexibility as to annual amounts is more important that previously.
Financial advisers in the UAE are offering plans with more flexibility and a similar rate of security, with SIPPs (self invested personal pensions) a preferred option for many. The combination of factors leading to deficits in occupational pensions involves the poor economic climate, longer life spans and less profitable funds, as well as the effects of insecure pension companies raiding their pensions pots in order to stay in business.
Comments » No published comments just yet for this article...
Feel free to have your say on this item. Go on... be the first!
