UK Pension Transfers | What's changing

Union Jack painted on a brick wall

If you worked in the UK you probably accumulated one or more pension funds that are now still sitting there.

Did you know that you can transfer these to New Zealand?

You need to take expert advice on the pros and cons of leaving these pensions in the UK versus transferring them to NZ, as there are some complex rules that will apply. However, it is important that you consider your options and get advice sooner rather later, as you may incur tax here in NZ when you transfer them or take money out of your UK pension at retirement. Furthermore, the UK government has recently announced that it intends to introduce legislation that will prevent anyone from transferring their pension out of a UK public sector scheme from April 2015 – that’s not far away!

Let me share a little more

The New Zealand Inland Revenue now taxes overseas pensions when you either take a lump from them at retirement, or if you transfer the fund to a New Zealand Superannuation. The amount of tax they charge will depend upon the length of time since you left the UK and so the longer you have lived here, the higher the potential amount of tax you’ll have to pay. With regard to the UK banning transfers out of public sector schemes from April 2015, this will include pensions that you may have accumulated with the Police, Fire Service, Ambulance Service, NHS, Teachers Scheme, Universities Scheme and Civil Service Scheme (such as local authority and government pension arrangements) to name a few. If you have decided to make New Zealand your home, it is important that you understand your options for transferring and get advice on the tax implications on both sides of the world. As the saying goes, forewarned is forearmed.