Pension Transfers in General
Retirement is the goal of all workers. What needs to be addressed is how one is going to be secure in retirement. It is a proven fact that we must save for our retirement. If we do not save, we will find retirement a drag and not what it is cracked up to be. The ability to enjoy pension transfer will be based upon what can be saved and what is in your standard pension. It is important for the young workers to start planning for retirement even if that is very far in the future. It takes time to save money and the younger a person starts the better off he will be at the time of retirement.
According to legislation, one can invest upwards of £3600 per year in a pension plan. The plan will earn interest and be available upon retirement. Through the pension program contributions can be invested in stocks and shares as well as property and cash. At your retirement, up to 25% of the pension transfer can be taken as a tax-free distribution and the balance will be used to provide an income for the rest of your life. A stakeholder pension may be the best option for a worker, but again everything depends upon an individual’s circumstances.
Personal Pension Transfers
A worker may transfer into any UK pension without being charged for the service. Many factors must be considered if you are thinking about transferring the pension away from the current provider. Be sure to get all of the facts and figures associated with any pension transfer. In order to make any comparison, you would have to ask your provider for a Current Valuation and Transfer Value.
With this in hand you will be able to make an assessment of the costs involved in moving from your current provider to another. With that being said, any thought of a pension transfer must involve a certified financial adviser. These people work daily with pension transfers and will be able to help you make the hard decisions.
Personal Pension Transfer from a Company Scheme
Legislation has become more complex and continues to change frequently. When considering to transfer out of a company scheme, it is very wise to get a specialist to help create a full analysis of any proposed pension transfer and an appropriate plan of action. Any pension transfer is a serious matter that cannot be taken lightly. There are options available but the final decision rests with you and the financial adviser you have selected.
When one is considering a pension transfer into another jurisdiction a thorough look at the tax laws of the host jurisdiction is in order. You do not want to jump from the frying pan into the fire, so to speak. Some of the host jurisdictions have tax rates that rank right up with the UK. In some jurisdictions, one could lose upwards of 30% of any pension transfer through taxes. When considering changing jurisdictions, be sure to have a certified financial adviser review the total tax scheme of the hosting jurisdiction.
For more information on pension transfer, please see pension transfer