Collecting money for your golden years is important. When retired, people tend to have more free time and become more engaged in many activities. Therefore, it is crucial to ensure that you have enough funds to support your necessity in your golden years. However, you might be confused when you have already made pension savings, but suddenly you must move abroad due to several reasons such as being employed in a new workplace or just wanting to relocate to a new environment. You might wonder what will happen to your pension if you move abroad. Transferring to QROPS is the answer to your concern.
QROPS is a qualifying recognized overseas pension scheme. When you want to move from the UK to another country, it is highly recommended to relocate your retirement savings to QROPS. With QROPS, you can decrease the possibility of failed transfers, because most UK pension providers acknowledge its validity. Moreover, the chances are high for you to be free from any tax penalty. Before moving your pension abroad, you need to know that the options may vary depending on what kind of pension scheme you used before.
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Defined benefit scheme
Defined benefit pensions generally have more complex regulations than other schemes. It is important to discuss inquiries about pension transfer with a reliable financial consultant because you will not want to put your treasured asset at risk. Furthermore, you need to consult with them to ensure that you will still obtain the advantages of the defined benefit pension initially guaranteed if you move your pension abroad. If it will lead to more loss, it would be wise to leave your pension in the UK and withdraw it later.
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Defined contribution scheme
If you save your pension in this plan, you can choose one of two.
- Let your pension remain kept in the UK pension provider and withdraw the money in your destination country. If you decide to go with this option, your investment will remain subject to the regulation as if you are still a UK resident. Above that, your pension provider potentially charges you an extra fee if you want to directly transfer your pension to an international bank account. Therefore, if you want to be more economical, it would be best to request your provider to send your pension to your UK bank account, so you can access your money by yourself, whether you will cash it out or switch it to your new overseas account later on.
- Transfer your retirement funds overseas. If you want to proceed this way, you should pay close attention to your provider’s requirements. You should make sure with them whether they will charge you a transfer fee which will affect the final sum that you will gain when you reach retirement age.
Relocating your funds abroad can be complicated and as a result, you may have too much on your plate. Therefore, if you are not sure that you can deal with all the hassle alone, it is in your best interest to work together with an expert in pension transfers.
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