Attendees were invited to submit their questions in advance. There was almost a 50/50 split between queries about UK and NZ state pensions and personal and/or company pensions.
UK state pension benefits are based on the amount and type of National Insurance contributions (NICs) paid by an individual. The NICs somebody pays, buys them credits in the scheme, which are paid out from revenue and not from an investment pot. NZ Super, on the other hand, is paid from the NZ Super Fund, which is a large, accumulated investment pot which cannot be transferred anywhere else. Tony advised that members should only seek information concerning both UK and NZ state pensions from official government websites. This is to ensure that the data is factual and free of bias, and he shared a number of useful links:
Queries concerning the two main types of UK personal and/or company pensions, respectively known as defined contribution (DC) and defined benefit (DB), focused largely on three main areas:
“Why should I transfer my UK pension to New Zealand?”
“When is the best time to transfer?”
“How do I know if I should transfer?”
To try and explain some of the whys and wherefores, Tony presented three illustrative case studies of Sheree (aged 40), Annette (aged 50) and Colleen (aged 60). These hypothetical scenarios looked at different combinations of key facts, including:
- Is the client still within the four-year “transitional residents” tax exemption period?
- What is the total amount in their UK personal and/or company pension/s?
- Are they able to pay any NZ “accumulated tax” immediately or should they defer this until it can be paid from the Pension Commencement Lump Sum withdrawal benefit?
- How close are they to age 55 (the earliest age at which a transferred scheme or pot can currently be withdrawn)?
By weighing up these points it was possible to make a factual assessment of whether they would be better to leave their UK pension where it was, transfer it to an NZ QROPS (Qualifying Recognised Overseas Pension Scheme) or move it to a UK SIPP (Self-Invested Pension Scheme). It was not possible however to go into all the potential personal reasons and priorities that someone might have to transfer or not transfer, such as:
- Wanting to move again and retire elsewhere, for example, to be closer to grandchildren in Australia
- Wanting to gain access to the scheme or pot as soon as possible in order to fulfil a lifelong dream of buying a bach or a boat
- Securing the scheme or pot for their estate, especially in the event of death
- Having greater control over the underlying investments and control of which currency investments are made in and benefits paid out
- Mitigation of UK and/or NZ tax issues.
One size clearly does not fit all! That’s why GBPensions’ philosophy is to give every client the power of choice – presenting all the facts and all the options, so that each individual can apply these to their own personal circumstances.
To find out more about Halo Financial Services, visit halofinancial.com
To find out more about NZBWN, visit nzwomen.co.uk