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Global list of biggest pensions exposes Britain’s flawed retirement plan

Two countries have half the world’s retirement wealth. Britain has only one fund in the top 50 – but the BBC nearly makes the top 200. Andrew Oxlade offers lessons from the top 300.

The BBC has the 205th largest pension fund in the world

Reports on the pensions industry can be dull and are easily overlooked.

One such study published last week attracted few headlines yet offered wonderful insights.

The world’s 300 largest pension schemes, a study put together by Towers Watson, allowed for interesting conclusions to be drawn on who owns the world’s retirement wealth – and what that says about how each country will meet future pension costs.

First, I was surprised that only one British scheme made the top 50: BT Group which has accumulated $68bn to ensure it can pay employees past and present sufficient retirement income.

The next biggest British pensions were the Universities Superannuation Scheme, with big banks’ and utility companies’ schemes close behind.

BT may have only just made the top 50 but lower sections of the list were loaded with UK pensions.

Continue reading (The Telegraph) →

‘We can’t get pension cash’ complain some over-55s

People trying to access their pensions under government reforms are complaining that many pension providers will not give them their money.

The changes mean that anyone over the age of 55 should be able to get cash out of their pension, subject to tax.

But some companies are not allowing savers to withdraw repeated lump sums from their pension pots.

Others will not allow their clients to cash in the whole pot – and cannot promise to do so in the near future.

Terry Fletcher, a 65-year-old former salesman from Surrey, said he had been unable to withdraw cash from a pension pot.

He said that the company involved – Zurich – told him it was not possible to take any money out.

“All I want to do is draw it as cash,” he told the BBC.

“It was all excuses. But you can’t get access to your money. It seems the government came out with these proclamations, but when you try and do it, there are a number of stumbling blocks.”

Continue reading (BBC News) →

QROPS crackdown in Australia, and Canada could be next

HMRC has delisted thousands of overseas schemes that could previously accept pension transfers from Britain

Want to send funds for your twilight years over to Australia? Your options have drastically narrowed

HM Revenue and Customs has launched a crackdown on overseas schemes open to UK expats who want to move their pension abroad, with hundreds being removed from its approved list.

Expats in Australia were among the hardest hit. Of the 1,600 Qualifying Recognised Overseas Pension Scheme (Qrops) providers that were on the list, only one now remains – the Local Government Superannuation Scheme.

Other countries to see significant culls in the number of Qrops available to expats include the Republic of Ireland, down from 797 schemes to just 56. Switzerland has fallen from 100 to one scheme, Spain has fallen from 16 to two schemes, and South Africa has dropped from 29 schemes to seven, according to international adviser Chase Belgrave, which warned that Canada could be next.

Savers who transfer their pension to a non-qualifying scheme will face a 55pc tax charge, imposed by HMRC, on the money in the pot.

A Qrops is an attractive option for expats who wish to take out of the equation the currency risk on their pension payments .

The cull of Australian schemes was not a surprise. Financial advisers had expected a number of them to disappear because they allowed expats to access their pension before they reached 55, so they would not be deemed Qrops by HMRC.

Continue reading (The Telegraph) →

Why your final salary pension cash could be twice as valuable as other people’s

Swapping your final salary pension scheme for cash has become more attractive because of the new pension freedoms. But some savers are being offered far better deals than others.

roul — Some savers are being offered twice as much as others when they cash in their pensions

Savers with final salary pensions – where employers guarantee a retirement income – are widely envied by people with less generous arrangements.

But a lucky few could be about to become the source of new-found jealousy among the “gold-plated” pension community.

This is because when it comes to asking their scheme if they can take a “transfer value” for their pension – instead of waiting and taking the pension itself – some people are being offered far more money than others. And this is the case even where similar levels of pension income have been promised.

The issue is hugely important right now, as pension savers prepare for the reforms coming into effect from April. These will allow “money purchase”, also known as “defined contribution”, pension savers to access their cash at once from age 55. But savers with final salary schemes could access their benefits in cash form only if they first request a transfer value and move the money.

Calculations for Telegraph Money, based on real transfer values requested by employees over the past few weeks, have revealed that the best offers would swap annual income of £30,000 for £900,000 in cash, while other firms are trading in the same guaranteed income for £450,000. These figures are for a 55-year-old who plans to retire at 60.

Continue reading (The Telegraph) →

Welcome to Expat Pensions Malaysia

If you have a UK pension, from a company or private scheme then this site will be a useful resource for you, to learn more about the UK pension system, what opportunities you have as an expatriate living in Malaysia, and how future pension changes may affect you.

Leaving that pension in a UK scheme could be very costly to your future income, tax position and restrict the income which your family can enjoy when the inevitable happens.

Continue reading Welcome to Expat Pensions Malaysia →