If you look solely at statistics, you could be forgiven for thinking that very few people actually emigrate from the UK and move abroad. After all, Britain recorded net migration of 335,000 in the year ending June 2016, with high volumes of migrants entering the UK through the EU and as a result of the refugee crisis in Syria.
This figure is more indicative of the sheer number of people who have come to reside in the UK during the last 18 months, rather than a shortage of citizens who look to relocate abroad. Make no mistake: emigration from the UK remains a popular ambition, particularly among older residents who are approaching retirement.
Emigrating overseas is an exceptionally challenging process, however, as is attempting to adapt to a new and unfamiliar culture. This means that not every expat is destined to spend the rest of their days overseas, as the realities and unpredictable nature of living and working abroad can quickly take their toll. This raises an important question: if you have already shifted your pension offshore it may seem daunting to transfer it back to a UK service provider.
There are steps to help you with this process, however, as the government has previously set up an overarching framework referred to as Qualifying Recognised Overseas Pension Schemes (Qrops). This is essentially a personal pension plan that is grounded in a flexible, international finance center such as Gibraltar, the Isle of Man, or Malta, which in turn makes it far easier to adapt your scheme if you do decide to return home.
What most people don’t realize, however, is that the notion of transferring a pension back home is not as daunting as it may initially seem. This is because the UK government have created a contingency within the Qrops framework, which is designed to specifically assist expats who are looking to return home. This ensures that the Qrops structure can retain relevance anywhere in the world, while also operating in line with UK tax legislation when benefits are withdrawn.
While this makes the transfer process easier, however, it is not the only option available to returning expats. If your intention was to continue working in the UK and make further contributions to your plan, for example, you would be better served by entering a new workplace pension or a British-based SIPP (self-invested personal pension). The latter are particularly popular at present.
These options can enable you to successfully transfer your pension plan from one jurisdiction to another, while also enabling you to comply with UK tax legislation from the moment that you return home. The key is to ensure that you are informed and ultimately aware of every single option, as this ensures that you make the right decision to suit your needs.
Rosa Taylor is a freelance content writer of international finance news, focusing on trading strategies, international trade, and politics.