A lot of people worry that they cannot retire abroad and enjoy their pension. However, this is not true. There are certain circumstances where you can enjoy your pension in another country, as long as you have prepared for this moment in advance. In other words, you want to have an overseas pension. Let’s take a look at what exactly this type of pension is and the benefits it can offer you.
What are Overseas Pension Schemes?
Just as the name suggests, an overseas pension scheme allows you to enjoy funds that you have worked for over the years even if you are not in the country you earned them in. In particular, one you will hear about often is a Qualifying Recognised Overseas Pension Scheme (QROPS). This is a type that is recognized as a pension scheme recognised overseas, which means that you can earn it in one country and enjoy it in another. In particular, this type of scheme meets specific qualifying parameters and requirements as set out by HMRC (Her Majesty’s Revenue and Customs). Therefore, this is a popular choice for British citizens that plan to retire abroad in another country.
It is always best to seek advance about an overseas pension. They can be complicated and if you have never discussed this subject before, you will want advice from an expert. This is going to make sure you are doing the best for your lifestyle and for retiring abroad.
What are the Benefits of This Type of Scheme?
There is nothing stopping you from moving abroad and bringing your pension with you. But you will find that there are a lot of charges that can be incurred. This is going to eat away into your savings and your hard-earned cash. We all know that moving house can be expensive. This is particularly true when you are moving abroad. You are going to need all of the funds available to you to ensure your big move is successful. Therefore, you are going to want a QROPS to save you incurring these charges. Instead, you can enjoy a tax-free transfer and be more efficient during the moving process. You can save up to 40 percent on an overseas charge.
Of course, an overseas pension is going to allow you to enjoy the lifestyle you have wished for. The good news is that you can even receive a lump sum of up to 25 percent to start with. This can be tax-free too.
What’s more, some pension schemes, such as a QROPS are great for passing on your wealth. If you have a good pension, you will want to make sure that your family can enjoy it when you are gone. This is something that can be achieved with an overseas pension. You can nominate a beneficiary and they are going to receive the funds a lot faster. What’s more, they will not be subject to high percentages of inheritance tax. For instance, a pension fund can be subjected to up to 45 percent after you die. But the good news is that with a QROPS, your family avoid this huge charge.