When moving to the UK, any individual who has built up pension benefits overseas has potentially three options:
- Leave their benefits in the original overseas scheme.
- Transfer benefits to a UK occupational pension scheme.
- Transfer benefits to a UK personal pension arrangement.
However, when transferring to a UK pension, the following considerations have to first be taken into account:
- The transferring scheme is able to make the transfer (some jurisdictions, Australia for example, do not currently allow transfers out of their schemes)
- The UK’s Her Majesty’s Revenue and Customs (HMRC) approves the transfer.
- The transferring scheme does not impose any conditions on the transferred fund.
- The selected UK scheme is willing to accept the transfer.
- Benefits provided by the UK scheme, in respect of the transferred fund, must be in line with UK pension regulations (these may be more or less favourable than the benefits available in the overseas scheme. For example, a UK scheme is restricted to an earliest retirement age of 55 and a lump sum payment of 25% of the fund value – the original overseas pension may be more flexible on these points).
- The exchange rate. (When converting pension funds into pounds sterling, has the pension member considered the exchange rate?)
Expert advice on transferring to UK pensions from overseas should be taken.
Article supplied by Global bdhSterling.