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Could this happen to your UK pension fund?

By Stephen Ward BA (Econ), ACII, APMI, APFS, AIFP - Wed 8th Jun 2011

Over the last few weeks things have happened which should have cause to make you think...


The Greek government has to introduce a further round of cuts to public sector pay and pensions and there is talk of the Greeks defaulting on their sovereign debt. Call it what you like, ‘restructuring’, ‘extending term’, etc... it will be seen by the financial markets as ‘default’. And do not think Spain is necessarily out of the woods with a 21.5% unemployment rate and an astonishing 45% of under 25s out of work. Maybe the Spanish have had enough as small scale and peaceful protest in the centre of Madrid has grown in number to several thousand with similar demonstrations taking place in other Spanish cities including Barcelona and Valencia.


The USA would have hit the buffers of the $14.3 trillion limit on public debt a few days ago but for a suspension of contributions by the federal government to the US equivalent of the civil service pension scheme. According to the Daily Telegraph, “Timothy Geithner, the US Treasury Secretary, announced the move in a letter on Monday to Congressional leaders as he explained that the move extends the government's breathing space to August 2nd to avoid an unprecedented default on its borrowings.” Could this happen in the UK?


And in Ireland a 0.6% tax rate is to be charged on all the value of funded pension schemes and personal pension plans. The levy will apply for four years, commencing this year, and will raise a projected € 470m annually. Do you really believe this will be for just four years?


UK pension funds are massively more than those in Ireland. Might the UK Government think about following suit as a smaller levy would not seem much at the level of the individual but would raise billions?


In any event UK companies can walk away from their pension obligations. This has most recently been the fate of the hapless members of Silentnight which dumped its liabilities in the lifeboat of the Pension Protection Fund (PPF). This means Silentnight’s 1,340 ¬pensioners could lose about a third of their pension ¬entitlements.


Sadly it is a myth to consider your UK pension fund as being ‘safe’. There are risks associated with taxation, there are risks associated with default. The only way you can be sure of avoiding these risks is to take control.

If you are a long term UK resident we can arrange for the entire fund to be released - the ultimate control. Or we can arrange a transfer to a QROPS or a self-invested personal pension putting you in control over how the fund is managed.

For further information about QROPS and Pension Planning opportunities please contact us today via clicking the link Here and leaving a few basic details on the form at the foot of the page.

Comment on this Blog

If only all the Financial Advisers in Spain were as knowledgeable as Stephen Ward, life would be much easier. This is the classic reason for my campaign to use only qualified, authorised and regulated advisers. davidgoodall
David Goodall - Wed, 8th Jun 2011

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