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Maximising the outcome from your UK Pension fund

By Stephen Ward BA (Econ), ACII, APMI, APFS, AIFP - Wed 27th Apr 2011

One of the strangest things we encounter from clients referred to us is their knowing very little about their pension rights. Often we have to dig quite deep to work out what there is. For most however, the exercise is definitely worthwhile.

Usually existing private pensions are languishing in poorly performing funds, with no supervision or monitoring and in extreme cases have already been whittled away to nearly nothing because of the charges that are being extracted. Even where people have deferred benefits in a final salary scheme, many clients just think of this as a ‘frozen pension’ from which they will get £ X a week when they retire at the age of 65.


Yet for many this ‘ignored’ asset is perhaps second only in value to the value of their house. So it makes little sense to ignore it. Maximising the outcome or value from your UK pension fund means firstly establishing what the current value is and secondly, understanding the associated options. For the expat the options will include transferring the fund to a QROPS.


For the long term expat, an attractive option is to release the fund as a lump sum which is available for use now. Even for the short term expat or UK residents it is generally possible to arrange for a lump sum to become immediately available through a process called pensions reciprocation.

For such clients, maximising the outcome from your UK pension fund can mean the availability of a lump sum now for re-investment, to pay off credit card debts, or even to start a new business venture.


Where the fund is sizeable however - say more than £100,000 then the considerations are usually different. Although releasing a lump sum remains for many an attractive option, we can instead arrange a transfer to a type of QROPS (generally in the Isle of Man, Guernsey or Malta) where long term investment growth is the objective. This will maximise the eventual income producing value of the fund, or ensures that as much as possible is available to pass down, tax free, to the next generation.

These are all objectives which are difficult to achieve within the framework of inflexible UK pension rights. It is therefore hugely advantageous for expats with UK pension funds to take advice and to evaluate the options available to them.


Amongst advisers in Spain we are unusual - we are pensions experts first and foremost. We do not see your pension fund as a source of investment monies from which undisclosed fees and commissions will be stripped out to your disadvantage. Our charges are always clearly disclosed and transparent. We are regulated and subject to compliance checks as a consequence. So you can be confident of the advice you will receive.

To find out how we can help you to maximise the value of your UK pension fund please click on our logo (above) - or if you have a question about the QROPS process in general, please enter a comment in the box (below).

Comment on this Blog

Pension Release is a flexible alternative to buying an annuity. you are 55 years or over, not only can take a tax-free money, but you can also take the responsibility not guaranteed pension. Alternatively, the fund remaining after tax free cash to continue to invest until you decide to retire. Pension Release is not for everyone, and other forms of capital should always be taken into account.
Pension Release - Wed, 25th May 2011
Great article. Thanks
Pension Release - Thu, 5th May 2011

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