FlexibilityIf you transfer your pension funds to NZ they must be invested in a QROPS. At age 55 you can withdraw all of your money but there are catches:
TaxWhen you move to NZ you have 4-years to transfer your pension without incurring tax, and if you become seriously ill you may be able to access your savings. If you choose to receive a pension from the UK it will be 100% taxable. Income derived from New Zealand pensions is not taxable.
Exchange rate fluctuationsOnce you have transferred your UK pension you will no longer need to worry about exchange rate fluctuations affecting your pension payments. If you are concerned about the exchange rate you can transfer in Sterling and 'average' into new investments over a certain period say; converting 20% of the amount transferred into NZ dollars every two months. Alternatively you could keep some of your funds invested in Sterling in an International share portfolio.
Less stressYou no longer need to worry about on-going changes to the rules for UK pension transfers. You will no longer be concerned if your pension provider is merging, closing or just not having enough money in the pot to pay promised pension amounts to members. More people are retiring and drawing down on their pensions but less money is being paid into the funds. This is a concern to many Brits living in NZ.
ControlYou will have more control of your money when you work with a professional investment adviser at Lyfords rather than communicating with an institution on the other side of the world who doesn’t know you.
You will have more information and choice on the investment managers who are responsible for managing your retirement savings.
Lyfords ExperienceLyfords has been transferring British pensions to New Zealand since 2002. Your pension has to be transferred into an HMRC approved QROPS registered New Zealand superannuation fund. Lyfords will give you choices on which company to transfer into based on your personal needs.
How Secure is Your UK Pension Fund?
There are concerns around large Company schemes being under funded and your accounts may not be getting credited with the full returns. We discuss this further in our Pension Blog.
Avoid Death DutiesDeath duty in New Zealand is currently zero rated. When you are retired you can have your money professionally managed without worrying about it being savaged by death duties in the UK if you die prematurely.
Bank feesYou will not be paying bank fees for each transfer which can be as a high as £18 per transfer.
Rule ChangesThe rules for pension transfers frequently change and are usually less favourable to you.
If you die prematurelyIf you haven’t transferred your UK pension before you die your spouse might be paid half of the pension you would have received from the UK (but not always).
If you both die your pension dies with you unless you and your spouse dies leaving qualifying dependent children. Then your UK pension could continue for as long as your plan fulfils the scheme’s eligibility criteria.
If you have transferred your UK Pension funds into a New Zealand superannuation plan your whole investment portfolio becomes part of your estate and is passed on according to your instructions in your Will.
Personalised investment portfolios
For larger pension transfers (greater than $300,000 NZ) your pension funds can be invested via a custodial wrap account. This gives you a more tailor made investment portfolio.
Get advice from a tax specialist. For $500 + GST you can receive advice from a tax specialist on your tax liability of your UK pensions. Call Lyfords who will refer you to a specialist tax adviser.
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