UK Pension Transfers

As more ex-UK residents arrive in New Zealand and Kiwis return from the UK, there is a growing need for a progressive, forward thinking practice to offer a specialist financial advisory service to these clients.

What can we offer?
Our UK Pension Transfer division can offer two services:
i)               For those who have decided to transfer their UK pension funds to NZ, a transactional service to arrange and complete all transfer paperwork, set up an approved NZ Superannuation Scheme that meets UK Inland Revenue rules and invest transferred funds in line with your personal requirements.
ii)             For those who require advice on whether to keep their pension benefits in their UK scheme or transfer them to NZ, an advice service is available which gives recommendations based upon what is important to you about pensions.

What about my other UK assets and insurances?
Our advisers who specialise in providing advice to Brits and returning Kiwis are not only UK pension advisers, they are Financial Advisers who can provide advice across the full spectrum of financial services but from the perspective of both NZ and the UK, an offering that is rare in New Zealand.

What UK experience do we have?
Our team of advisers have in excess of 27 years of UK financial services experience, in addition to their NZ experience. In the UK and NZ they have been Financial Advisers and in addition, their UK experience also extends to working at specialist pension, investment and insurance companies.
This gives them a wide ranging experience across all elements that make up the financial advisory role. 
This ability to provide advice from the perspective of both countries is vital in areas such as UK pensions as if you decide to transfer a UK pension scheme to New Zealand you also need to know about ongoing tax implications that are attached by the UK tax authorities. Equally, if you decide to leave your pension funds in the UK and take benefits, you need to understand the NZ tax implications of doing so.

What NZ Superannuation Schemes do you use for UK Pension Transfers?
We have access to many NZ Superannuation Schemes that have been approved by the UK’s HMRC to receive UK pension transfers. To get this approval a NZ scheme must be registered in the UK as having QROPS status (Qualifying Recognised Overseas Pension Scheme).
Lifetime Financial Security only uses schemes having this QROPS approval, who provide the level of service we expect for our clients and who are able to keep transferred monies in Sterling if required.
For us to use their scheme a NZ Superannuation Scheme must also have a wide ranging choice of investment.
More detail on investment choice and Sterling currency control is provided below.

What are the benefits and drawbacks of UK and NZ pension schemes?
Our free Pension Guide covers amongst many other issues, the benefits and drawbacks of both UK and NZ pension schemes in detail. To request your free copy of this guide click here

 A very quick summary of the main benefits of NZ schemes over UK pension schemes are:

·         Better access to your money

·         Higher levels of tax free cash

·         Vastly superior flexibility and control

·         Tax free income

·         Tax free payment of your whole pension fund to your beneficiaries if you were to die

 A brief outline of the main benefits of UK schemes:

·         Guarantees of income and inflation proofing in Final Salary Schemes (subject however to the sponsoring employer being able to fund the scheme)

·         Payment of a spouse’s pension

·         Tax efficient fund growth

What if the exchange rate is poor when I transfer?
This is not something you have to worry about if your transfer is arranged by Lifetime Financial Security as we will only use an NZ Superannuation Scheme that is able to keep transferred monies in Sterling.
This gives you complete control and assurance that you and not your pension company can decide when it is best for you to exchange your money. Having this control is vitally important as can be seen in the following examples:

Example 1:

Mr Smith transfers his UK pension fund of GBP100,000 to NZ. His NZ superannuation scheme has no ability to keep his money in Sterling. At the time when Mr Smith commenced his transfer process the exchange rate was 2.5 Dollars to the Pound. Unfortunately by the time the transfer process completed the rate had dropped to 2.2.
Mr Smith was expecting to have a pension fund of $250,000 but he actually receives $220,000, a reduction of 12%

Example 2:

Mr Jones coincidentally also had a pension fund of GBP100,000. However his transfer was organized by his Lifetime adviser, who used a scheme able to retain his money in Sterling. On the day his money arrived the exchange rate was also 2.2 so he decided to hold his money in Sterling. Six months later the exchange rate rose to a whopping 2.8 so Mr Jones decided to exchange and had a pension fund of $280,000, an increase of 12% over what he originally expected.

Why is a good investment choice so important?
At present we do not use any NZ scheme that offers less than 40 investment options, all of them independently researched to ensure quality.
If your pension scheme offers only a dozen funds, what happens if half of them don’t perform? What other options do you have to be invested in a particular region or asset class? Having greater investment choice leads to increased flexibility and control over your pension planning.

What about the rest of my retirement planning?
Whether you leave your UK scheme benefits where they are or transfer them to New Zealand, this forms just one part of your retirement planning considerations. Although NZ offers a reasonable State Pension, it will not support a good retirement lifestyle so private pension planning is absolutely vital.
We can therefore consider all of the following as part of an overall retirement planning service:

·         KiwiSaver

·         Regular, monthly savings plan

·         Lump sum investments

·         Company pension schemes

·         Protection of your income to ensure you can afford the pension planning you need

·         Pensions Gap Analysis to identify the gap between what you have at present and what you need to have saved by retirement age. A solution can then be provide to start to close this gap.

To discuss any of the above please contact us:

Vivecca Robinson
Phone:  372 1946
Mobile: 021 326 546
Email: vivecca.robinson@lifetime.net.nz

Steve Baker
Phone:  372 1947
Mobile: 0273 504 066
Email: steve.baker@lifetime.net.nz

 For a free copy of our Pension Guide click here

To visit our specialised Lifetime UK Pension Transfers website please click here

 Disclosure Statements are available upon request and are free of charge