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Advice on your UK pensions for returning South Africans |
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South Africa Financial Advice – What to do with your UK pension?
If you have been working in UK, it is likely that you have been a member of at least one pension scheme. Most companies have a pension scheme which employees’ join, to which the employers make a contribution and which can be topped-up by your own additional contributions. Even if the company that you worked for did not have an established company pension, many people have made their own private pension arrangements such as setting up a stakeholder’s pension.
The modern workforce is a mobile one; it is quite common for you to have worked for more than one company resulting in the fact that you probably have more than one pension held at more than one company, and sometimes a stakeholder’s pension as well.
Given that you probably cannot access your pension until a later stage of your life (depending on your age), these pensions need to remain invested. But, keeping track of all these pensions let alone actually managing them efficiently can be a difficult task while you are in the UK. Moving back to South Africa makes it that much harder.
A popular (and sensible) option is to consolidate your pension arrangements into a single pension which can be managed efficiently and effectively from South Africa. Self Invested Personal Pensions (SIPP’s) are relatively new introductions into the pension arena in the UK, but are excellent products for consolidating your existing pension arrangements or indeed to manage your current pension if you are still working in the UK. They are structured in such a way to make them very tax efficient (which can add a considerable amount to the capital that you invest) and they have very flexible investment options which allow you a wide array of investment options in which to invest your money.
Another option to consider for your pensions once you are no longer resident in the UK is to transfer your pension to a Qualifying Registered Offshore Pension (QROP) which may have further advantages for you.
Income from offshore private pensions is taxed very favorably in South Africa which, coupled with the tax incentives from the UK for utilizing SIPP’s, makes getting these arrangements sorted out properly a prime consideration for you when you decide to leave the UK.
Please note that specialist advice is advisable when considering your pension options as this is a complex topic
The links and articles in the right hand side will provide you with a good starting point but any specific enquires can be made to the contributor of this article.
The Incompass Group can be contacted here.
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