2. Weigh up all of your options
PENSION
PLANNING
As pension legislation has changed over the years, pension plans have adapted to suit.
But could your money be held in an old-style plan, that no longer suits your needs?
If you don’t live in the UK, pension planning is a very specialist area for advice.
Each different pension structure holds varying benefits and drawbacks. Some are
cheap and cheerful, some not so cheap and certainly not cheerful. Some really old
plans have benefits such as guaranteed annuity rates (GARs), protected tax free cash
and life cover elements, but these tend to come at a cost – or a catch. For example,
you may have a RAC (Retirement Annuity Contracts) from being self-employed at
some point for many with generally high retirement income ‘promises’ – GARs, carry
little or no death benefits for your spouse and also specify a rigid retirement age – so
are they really best for you and your family?
As people live longer they have a longer future to provide for. With the state pension
seemingly getting further and further away, and with speculation around the potential
of it being means-tested in the future, its vital for you to prepare your financial future.
For more information about our pensions review process, see our booklet ‘Your
Retirement Review’
Pensions come in all different shapes and sizes.
3. You may live abroad now, but will you retire abroad?
For those currently working abroad there may be two key
pension structures to consider,
Their suitability will be driven entirely by the needs and
objectives of you… And your family
Pensions are an intrinsic part of
your wealth management and
overall financial planning strategy
• A Self Invested Personal Pension (SIPP)
• A Qualifying Regulated Overseas Pension
Scheme (QROPS)
4. WHAT IS
A SIPP?
A Self-invested personal pension is
effectively a straightforward UK-based
private pension plan with added
functionality and flexibility.
5. A SIPP is simply a pension
‘wrapper’, the SIPP
administrator ensures the
pension structure is in place,
and that your plan adheres to
all of the UK’s rules and
regulations surrounding
pensions and retirement
planning.
However within your ‘wrapper’ you can invest in a wide range of
opportunities, and design your pension planning to best suit you, both
leading up to and through your retirement.
Key points:
Is a UK based plan, subject to all the benefits and drawbacks of UK
legislation
Is fully UK friendly, and will continue to function for you whether you
are UK resident or living overseas
Can invest in a wide range of opportunities including commercial
property and land, direct company shares and has access to thousands
of investment funds
Can convert to a QROPS at any time, should your circumstances
change
Upon taking income, it will be taxed in the UK. However, double-
taxation agreements may be in place which can benefit you depending
on your country of residence at retirement
Can be better for those
- Retiring in the UK or a jurisdiction with a double-taxation
agreement
- With total pension funds under £1m – and never likely to
reach the lifetime allowance (currently £1.25m 2014/15)
- Unconcerned about UK pension legislation
6. While it is recognised and authorised to accept transfers
of pension funds in from UK plans, it must only report
to HMRC for its first 10 years and is not subject to
continuing UK pensions regulation.
As an international plan, it can benefit from local taxation
and adapt to your changing circumstances – particularly
of use for those retiring offshore where residency and
taxation are a key component of long term income
planning.
A Qualifying Recognised
Overseas Pension is an
international pension plan,
recognised by HMRC.
Key points:
Not subject to the ever-changing UK pension legislation
Improved tax efficiency for those resident outside of
the UK for at least five years
Does not carry a pension lifetime allowance
No tax on pension funds upon death, at any time
Can be better for those
- Retiring offshore, particularly in a jurisdiction with no
double-taxation agreement with the UK
- With pension funds in excess of £1m, and/or likely to
grow beyond £1.25m (current UK lifetime allowance
for 2014/15)
- Wanting improved tax efficiency on death
Your circumstances – are you married? Do you have
children? If not, do you plan to?
Your tax position & the tax status of the country you
both reside in and plan to retire in
Your priorities – there are so many different benefits
and drawbacks to pension planning, we need to ensure
your priorities are met, even if at the expense of other
potential benefits
Your investment risk profile
Your term to retirement and retirement plans. When
do you plan to retire? Do you want to go part time? Will
you return to work? Do you need flexibility? Do you
need a lump sum to pay off a mortgage or even buy
that yacht?
Your overall financial planning and wealth. Pension
planning isn’t the be-all and end-all, but plays an important
part of your financial portfolio
Which is better for you?
At Guardian, we know how dangerous generic advice
is. Your future is at stake and we will talk you through
your options and help you understand your needs,
objectives and priorities. Our advice will depend on
your answers to the following questions, and more…
What existing plans have you got in place?You may not
need to change anything
Your current country of residence – and where you
may move to before and through retirement
The total value of your pension plans
7. LET’S COMPARE
*30% available should QROPS be in place for over 10 years, and
subsequently out of HMRC reporting requirements
8. Global Enquiries +44 800 779 7028
Switzerland +41 22 710 7876
Dubai +971 4450 9700
Hong Kong +852 3796 3555
Qatar +974 4491 5355
United Kingdom +44 2921 677 940
Information correct as of 8th May 2014. The information provided is for guidance only and advice should be sought before making any financial decisions.
Guardian Wealth Management Ltd cannot be held responsible for any errors or omissions which result in financial loss.
Don’t let your children miss out
on the most precious of
opportunities
Contact our financial advisors
today so they can help you start
building towards your children’s
brighter future
