UK Pension Transfers - Advice and Service

[Andrew from Vista Financial]

Whether to transfer your UK Pension to Australia or not can be a big financial decision to have to make and especially at the moment when there are big changes around the Pension system and the potential of a ban on transfers for certain pensions.

 

These threads give some further information and background:

 

UK Pension Transfers

 

Ban on UK Pension Transfers

 

Since there is a huge flurry of activity going on at the moment in this area I felt it appropriate to detail our service offering here at Vista.

 

Pension Transfer Advice from Vista Financial Services

 

There are essentially up to 3 parts of service involved.

 

The first part of our service is getting to know our client via:

 

 

• Gaining a full understanding of your financial position including current retirement provision.
  
• Conducting a personalised consultation to explore your financial and lifestyle goals and objectives;
  
• Having full discussion around planning for your retirement ie age you wish to retire, income you would like to retire on etc;
  
• Carrying out a Risk Profile Assessment to ascertain your suitability and comfort levels towards investing.
  

 

 

 

The second part of the service is the Advice stage which is given in the form of a Statement of Advice (SOA) (which is a legal requirement for any Financial Planner to construct when providing advice) the fee charged is a flat fee based on the merits of the individual case and complexity (ie single, couple, number of pensions, type of pensions etc).

 

This Advice includes:

 

 

 

• A personalised written Statement of Advice factoring in your personal situation goals and objectives.
  
• Detailing the difference between the UK and Australian pension/superannuation systems which will include details of implications of transferring including taxation and HMRC and Australian legislation required to be met;
  
• For Defined Benefit Pensions (NHS, LGPS, Police etc) comprehensive modelling based on leaving pensions in the UK versus transferring to Australia.
  
• Retirement Projections for these scenarios factoring in also the UK State Pension and the Australian Age Pension and taxation implications.
  
• Our professional opinion as to where we believe the benefits are best placed (based on the outcome of the modelling).
  
• Fully detail how to navigate the transfer process and the implications if a pension/s is/are to be transferred.
  
• Information on how to obtain forecasts and maximise UK State Pension benefits.
  
• A recommendation for an appropriate Superannuation (QROPS) Fund in Australia based on individual circumstances;
  
• A recommendation for a tailored investment portfolio based on the individual investor risk profile;
  

 

 

 

The aim of our advice and service is to work with you so as to put you in a position whereby you are able to make a fully informed decision that you are comfortable with. The outcome therefore may be that the pension remains in the UK alternatively a transfer may be the course of action decided upon.

 

 

If following the presented Statement of Advice and our work with you a transfer is the course of action being taken then our service extends to the third part being:

 

 

 

• Administration and project management of the transfer of the pension;
  
• Opening of the recommended Superannuation (QROPS) Fund in Australia;
  
• Placement of the monies once arrived into the recommended investments within the Superannuation (QROPS) Fund;
  
• Dealing with the receiving scheme and the ATO in meeting any tax liability created by the transfer (if applicable) on your behalf;
  
• Constant contact throughout the process keeping you up to speed with progress and a detailed file closure letter following completion of the transfer;
  

 

 

 

If a transfer is going ahead and you wish for us to implement the transfer we then charge a fee to administer and project manage the transfer/s and again the fee is dependent upon the work involved and is fully disclosed in the SOA.

 

A services agreement is drafted prior to any work being undertaken, fees can generally be deducted from the transferred monies if a transfer is occurring.

 

 

Kind Regards

 

Andy

[Andrew from Vista Financial]

It seems the link to the thread headed Ban on UK Pension Transfers (above) is not working, this is an alternative link: http://www.pomsinoz.com/forum/money-finance/216138-uk-pension-transfers-ban-update.html

[bloomersthebear]

Hello Andrew in case this gets to you quicker. I have posted this elsewhere on the site in a thread. (sorry if this is bad etiquette) (

 

 

 

I have a dilemma and time is not on my side in the slightest. (my own fault)

 

To the point I am ex UK Copper who has transferred to the QLD police. I have a deferred pension with the UK service just worked out for me at 150K

 

I have been chatting to this fellow (IFA) from the UK that deals with QROPS and the likes of me.

 

He has pointed me in the direction of Malta and the Momentum Pension investment people. additionally he has recommended the Royal London 360 fund for a 10 year period.

 

I have the papers here and if I can get them to him by mid next week I have a chance to beat the deadline for these kid of pensions the government are looking to ban from QROPS. (4th April)

 

I have mulled over this for a while but I see pensions and funds and super as a dark art but im learning out of necessity.

 

My police pension I can draw down on at 60 (it may change again im sure) its currently worth 11.5k per year. its fairly solid I suppose being a government pension but I am aware that the QROPS provides lots of advantages too.

 

Q. Do I stay or do I jump into QROPS (tough to call everyone's different I know, but I'm likely to want to travel between the UK and here in QLD when I retire)

 

Q. Are these fees sent to me by the IFA chap, after some pressure I hasten to add, fair with the what's on the table or exorbitant?

 

Q. Momentum and RL360 any good?

 

 

With the time as it is I haven't time to engage anyone else I need to put up or shut up.

 

 

 

The table below breaks down the costs and gives you an idea of the costs based on a portfolio amount of £150k.

 

 

Any positive advice would be great. Its a school boy error to have left it this late.

 

Thanks in advance to any kind souls out there.

 

 

 

 

 

 

[TABLE=class: cms_table_ecxms-rteTable-default]

[TR=class: cms_table_ecxms-rteTableEvenRow-default]

[TD=class: cms_table_ecxms-rteTableEvenCol-default]​[/TD]

[TD=class: cms_table_ecxms-rteTableOddCol-default]​Fee option 1[/TD]

[TD=class: cms_table_ecxms-rteTableEvenCol-default]​Fee option 2[/TD]

[/TR]

[TR=class: cms_table_ecxms-rteTableOddRow-default]

[TD=class: cms_table_ecxms-rteTableEvenCol-default]​Advisor Initial Fee[/TD]

[TD=class: cms_table_ecxms-rteTableOddCol-default]​3%[/TD]

[TD=class: cms_table_ecxms-rteTableEvenCol-default]​£0[/TD]

[/TR]

[TR=class: cms_table_ecxms-rteTableEvenRow-default]

[TD=class: cms_table_ecxms-rteTableEvenCol-default]​Advisor annual Fee[/TD]

[TD=class: cms_table_ecxms-rteTableOddCol-default]​0.25%[/TD]

[TD=class: cms_table_ecxms-rteTableEvenCol-default]​0.25%[/TD]

[/TR]

[TR=class: cms_table_ecxms-rteTableOddRow-default]

[TD=class: cms_table_ecxms-rteTableEvenCol-default]​Invested Amount[/TD]

[TD=class: cms_table_ecxms-rteTableOddCol-default]​£145,500 (97%) [/TD]

[TD=class: cms_table_ecxms-rteTableEvenCol-default]​£150,000​ (100%)[/TD]

[/TR]

[TR=class: cms_table_ecxms-rteTableEvenRow-default]

[TD=class: cms_table_ecxms-rteTableEvenCol-default]​QROPS Fee initial[/TD]

[TD=class: cms_table_ecxms-rteTableOddCol-default]​£645[/TD]

[TD=class: cms_table_ecxms-rteTableEvenCol-default]£645[/TD]

[/TR]

[TR=class: cms_table_ecxms-rteTableOddRow-default]

[TD=class: cms_table_ecxms-rteTableEvenCol-default]​QROPS annual Fee [/TD]

[TD=class: cms_table_ecxms-rteTableOddCol-default]​£845[/TD]

[TD=class: cms_table_ecxms-rteTableEvenCol-default]​£845[/TD]

[/TR]

[TR=class: cms_table_ecxms-rteTableEvenRow-default]

[TD=class: cms_table_ecxms-rteTableEvenCol-default]​RL360 Fee[/TD]

[TD=class: cms_table_ecxms-rteTableOddCol-default]​0.44%[/TD]

[TD=class: cms_table_ecxms-rteTableEvenCol-default]​0.84%[/TD]

[/TR]

[TR=class: cms_table_ecxms-rteTableOddRow-default]

[TD=class: cms_table_ecxms-rteTableEvenCol-default]​Fund Fees (estimated)[/TD]

[TD=class: cms_table_ecxms-rteTableOddCol-default]​0.5%[/TD]

[TD=class: cms_table_ecxms-rteTableEvenCol-default]​0.5%[/TD]

[/TR]

[TR=class: cms_table_ecxms-rteTableEvenRow-default]

[TD=class: cms_table_ecxms-rteTableEvenCol-default]​[/TD]

[TD=class: cms_table_ecxms-rteTableOddCol-default]​[/TD]

[TD=class: cms_table_ecxms-rteTableEvenCol-default]​[/TD]

[/TR]

[TR=class: cms_table_ecxms-rteTableOddRow-default]

[TD=class: cms_table_ecxms-rteTableEvenCol-default]​Total after Initial invested after costs[/TD]

[TD=class: cms_table_ecxms-rteTableOddCol-default]​£144,010 [/TD]

[TD=class: cms_table_ecxms-rteTableEvenCol-default]​£148,510[/TD]

[/TR]

[TR=class: cms_table_ecxms-rteTableFooterRow-default]

[TD=class: cms_table_ecxms-rteTableFooterEvenCol-default]​Total Annual Fee[/TD]

[TD=class: cms_table_ecxms-rteTableFooterOddCol-default]​1.77%[/TD]

[TD=class: cms_table_ecxms-rteTableFooterEvenCol-default]​2.15%[/TD]

[/TR]

[/TABLE]

 

 

 

As you can see the initial invested amount after costs take into account QROPS set up fee and first years annual cost. The costs shown also factor in a proposed portfolio, but this can change largely depending on the underlying investments, for example if you purchase all single company stocks this cost becomes 0%.

 

 

 

Let me know your thoughts.

 

 

 

Kind Regards

[TerryDXB]

Hi there BtB,

I’m not employed in any capacity related to financial affairs, so there's no vested interest here, but my own personal circumstances, combined with an extreme mistrust of letting anyone look after my investments, has led me to get a reasonable understanding of how pensions work (or not, as the case may be).

First up, I cannot understand why, in this day and age, anyone would ever consider giving up a UK government backed pension for a stock market related one. You might be lucky, but the chances are that you won’t.

If you have a nominal fund of GBP150k, then the way to a pension is to either buy an annuity (or use drawdown, which I'll ignore for now). At the moment, at the age of 60, you can get a single life pension with 3% annual increase for an annuity rate of 3.2% - i.e you give an insurance company your GBP150k and they give you GBP4800 for the first year, and the same amount, increasing by 3% each year for subsequent years, until you die.

Or, you can get a single life flat rate i.e fixed until you die for an annuity rate of 5%, giving you a pension of GBP7500 a year, fixed for life. That single life thing means that the pension stops when you die, and there’s nothing for your spouse. You can of course get deals where a reduced pension is paid to your spouse, but the annuity rates are less than those I’ve given as examples.

To get a flat rate pension of GBP11500 per year, with an annuity rate of 5% would require a pension pot of GBP230k - so you can see straight away that your UK pension is a good deal.

I don’t know if your police pension is index linked, or continues to pay a reduced amount to your spouse/partner, but if available these options are extremely valuable.

So, you take your GBP150k, place it in a stock market related fund until you retire: of course, the stock market might rocket, but equally likely, suppose that just before you go to collect pension, China invades Taiwan, Iran lobs a nuke at Saudi Arabia/Israel, North Korea lobs a nuke at the USA, or for some other reason, there’s another global financial meltdown that causes stock markets to plunge, taking your pension with it.

It’s not for nothing that UK government pensions are called ‘gold plated’ – yours will payout regardless of what happens to stockmarkets. Of course, you can always worry about what successive governments might do, but the likelihood of them stealing your pension is quite small.

In your position, I’d suggest that you leave the UK pension ‘as is’ and make sure that your NI contributions are kept up to date – a police pension of GBP11.5k/year from the age of 60, along with a UK state pension of around GBP150/week, when you’re eligible will be a good starting point for a very comfortable retirement. You will be at the mercy of exchange rate variations….but they can work both ways as well.

[bloomersthebear]

Just walking out the door Terry but that's a very thought provoking and funny reply.

 

Wars aside I cannot help but lean your way of thinking.

 

Will mull more when I have stopped laughing.

 

Thanks for your time.

 

Regards.

 

BTB

[Andrew from Vista Financial]

Hi BTB

 

I think between this post and your other post you have received the answers you were looking for?

 

I suppose to reiterate, this strategy raises many questions as to why these recommendations have been made and it seems to me as though this is more to do with a product driven sale especially given the fees involved.

 

The most important factor when considering your pensions/retirement vehicles is how they fit in with your retirement plans, not sure how having your retirement monies in Malta would benefit a retirement in Oz from a tax point of view over and above having it in UK or Oz.

 

Regards

 

Andy

[GooseRenders]

Hi Andy,

 

Very quick question that I hope you can clarify for me.

I have a tiny single pension here of £700. If I was to move it into a QROPS would there be a fee? I am clear on the tax side should it be moved within the 6 months etc, I just wanted to know what the approx. fee would be for a pension this small and if it really is worth transferring.

 

Thanks!!

[Andrew from Vista Financial]

Hi

 

Apologies for the delay in responding.

 

The fee would depend on whether you sought advice and also what/where you transferred your money to ie which QROPS product as product fees are company specific.

 

If an Adviser was required it would absolutely not be worth it.

 

Outside of Australia my understanding is most QROPS providers charge an entry fee (and mostly an exit fee) and again if this were the case it is absolutely not worth it.

 

Regards'

 

Andy

[GooseRenders]

Thanks Andy. I was actually in the position to get a refund (at a 3rd of the rate that the pension would have been with had it carried on) which I saw to be the best option for something so small, knowing that fees would be attached.

 

Thanks again, and Merry Christmas!

[The Raillys]

I wish I had of transfered my money years ago.

SO so so angry about this.

I am looking at transferring my pension to New Zealand instead.

[The Raillys]

I have only just found out about the QROPS issue, and are so upset. As I always knew I would be moving to Australia to live.

 

 

Do you think it will change? Why don't Australia pension providers create a scheme that would work with QROPS? They would get all the UK pensions? I am seriously thinking of moving my pension to NZ at this stage.

[The Raillys]

Sorry another question..

 

on the Uk Government website there is a list of Australia Recognised Pension Schemes.

https://www.gov.uk/government/publications/list-of-qualifying-recognised-overseas-pension-schemes-qrops/list-of-recognised-overseas-pension-schemes-notifications#australia

Are these know longer valid?

[Ken]

Sorry another question..

 

on the Uk Government website there is a list of Australia Recognised Pension Schemes.

https://www.gov.uk/government/publications/list-of-qualifying-recognised-overseas-pension-schemes-qrops/list-of-recognised-overseas-pension-schemes-notifications#australia

Are these know longer valid?

 

They're valid but once you eliminate the Self-Managed Super Funds and the schemes only open to government employees what are you left with?

[Andrew from Vista Financial]

I have only just found out about the QROPS issue, and are so upset. As I always knew I would be moving to Australia to live.

 

 

Do you think it will change? Why don't Australia pension providers create a scheme that would work with QROPS? They would get all the UK pensions? I am seriously thinking of moving my pension to NZ at this stage.

 

 

Hi Raillys

 

I do not think transferring to NZ is likely to put you in a better position than where it is if you will be retiring in Australia, as far as I am aware this would also be assessed by the ATO when you start to draw on it similarly to how it would be treated if left in the UK.

 

Also it is definitely possible to transfer a UK pension to Australia at this stage for people over age 55 whereas once in NZ my understanding is that it will have to remain there until retirement age.

 

Things of course may change in terms of options being available for under 55s for UK pension to Australia transfers, it could well be worth just holding on for that alone.

 

Regards

 

Andy