Emigrating is a significant and potentially life changing decision that needs careful thought and planning. One factor that many people overlook is the opportunity that exists to take your UK pension fund(s) with you when you settle in another country. New Zealand is one of a number of countries where reciprocal arrangements allow for this to take place. However, taking the right advice from experts in this field is essential to your pension transfer process having the totally successful outcome that you desire; The fact that Advice Financial have advisers and staff with experience of living and working in both countries gives us a significant ‘edge’ in giving advice upon this subject. The process of transferring your UK pension can be summarised in the following 5 easy steps:
Step 1. Write to your UK pension provider(s) and request a transfer valuation and their forms to initiate the transfer to NZ. The UK pension providers usually decline to accept such requests from anyone except the pension owner themselves, citing the Data Protection Act as the reason for the restriction, so in order to avoid delays you should write to your own UK pension provider requesting only your own transfer value and forms.
Step 2.
Once you have the necessary transfer forms and a valuation, contact Advice Financial's head office staff to arrange a meeting with one of our local advisers. You can telephone us from within New Zealand on Freephone 0800 102264 (from outside of NZ telephone 64 9 915 6464) or e-mail us at info@advicefinancial.co.nz There is no cost for an initial meeting during which our adviser will assess your situation and confirm whether you should proceed or not.
Step 3. Complete a Fact Find with your adviser, so the transfer can be incorporated into a comprehensive personal Lifestyle Plan written specifically for you,based on your own unique situation, future plans and goals. Complete a Letter of Authority to allow us to obtain full details of your remaining UK pensions. Your Lifestyle Plan will look at all aspects of your current situation and take into consideration the goals that you want to happen, up to and throughout retirement, to deliver personal recommendations tailored to help you achieve those stated goals.
Step 4. Once your personal Lifestyle Plan is prepared our adviser will assist you to complete the necessary transfer forms to facilitate the transfer of your UK pension to a Qualifying Recognised Overseas Pension Scheme (QROPS) in New Zealand that is approved by HM Revenue & Customs (HMRC).
Your adviser will also help you complete your NZ QROPS reinvestment application forms and will recommend suitable funds within that scheme for your personal investment profile, identified as part of your Lifestyle Plan.
As well as a comprehensive Investment Plan, depending on your personal circumstances, your Lifestyle Plan may also include advice regarding Cash Management, Debt Management, Lifestyle Protection Insurances, Estate Planning, Tax Management, Education Funding, Property Investment and Retirement Planning.
Step 5. When your transfer is complete, you will be sent a statement by your nominated New Zealand Superannuation Scheme, detailing the allocation of your money into the individual funds that were identified as most suitable for your personal investment profile.
Depending on your tax status with HMRC and age you may be eligible to withdraw up to 40% of your transferred amount straight away. Your adviser can determine whether you are eligible for an immediate withdrawal and if not, we can confirm when you will be able to access your money.
Why Transfer?
There are significant benefits they could be gained by transferring your UK pension fund to New Zealand;
- You would gain much greater control over how the funds are allocated. You will have little or no input at all into how your UK Pension is invested and the pension funds in the UK are normally invested very conservatively, which may not be suitable for your personal investment profile.
- After transferring, you would be able to switch between investments if you wanted to.
- You may be able to access some or all of the money before age 65, if needed.
- You could receive the money as a lump sum benefit, instead of being compelled to purchase an annuity with the majority of the fund total, as is the case in the UK.
- The value can be factored into your Lifestyle Plan's insurance needs assessment, to reduce the level of covers it is assessed that you need and consequently reduce the premiums you have to pay.
- Interest rates in the UK are significantly lower than the current NZ rates, so you have greater opportunity to get higher returns on your investments here.
- You would remove for good any uncertainty of the fluctuating GBP/NZ$ exchange rate affecting your pension.
This rationale can also apply to some extent to Dutch, Irish and many other European migrants as well. The process from most other European countries is similar to the UK process and you will usually be told what needs to be done and who needs to be informed by your European Pension Provider(s). You would also need to provide your adviser with appropriate written translations of non-English documentation.
Your first step
If you are resident in New Zealand and you have left a pension or other investments behind in the UK contact us on info@advicefinancial.co.nz or freephone 0800 102264 and arrange a meeting with one of our local advisers.
If you are resident in the UK (or anywhere else outside of NZ), please contact us at the same e-mail address or by telephone on 0064 9 915 6464, remembering that we are 11 hours ahead when British Summer Time (BST) is in effect and 13 hours ahead of GMT.