Pension Transfers Too Generous

Pension transfers too generous, says regulator

The BBC ran an article in August that the UK Pensions Regulator has written to 14 pension companies providing "defined benefit" retirement schemes encouraging them to consider making reductions in payouts. Some schemes have been offering higher payouts to decrease their risk as people are living longer. The problem can be those left in the schemes, the companies may not be able to meet their commitments.

While there are disadvantages to transferring out of a defined benefit scheme there are also some major advantages to. We will discuss these with you.

The 4 Year Tax Free Rule

What is the 4 Year Rule

A key reason British Immigrants transfer their UK Pension as a lump sum to New Zealand is to reduce the expected amount of tax they are liable to pay. In New Zealand, versus the UK, money withdrawn from a QROPS superannuation scheme (from the age of 55) is tax free.

If you transfer your UK Pension within four years of becoming a New Zealand resident you will not pay tax on the amount transferred. If you transfer later there is a sliding tax liability, Refer to our Tax Liabilities Table