Do you have a Final Salary Pension Scheme?
If so, then some elements of your pension may be guaranteed. This is really important, because if you choose to transfer your UK pension it's likely that you will lose some or all of these guaranteed benefits.
You'll receive your UK pension payments in sterling, wherever you live
This means that they're subject to currency fluctuations. These variations may go in your favour or they may not, but over the last ten years alone, sterling has varied by as much as 42% against the US dollar.
Your UK pension payments will be classed as earned income
So they may be liable for income tax, depending on your other earnings.
You can take up to 25% of your fund as tax-free cash, known as a PCLS or tax-free lump sum
But if you choose to take the balance of the fund as a lump sum, you'll pay tax on it at your highest marginal rate. It could even push you into a higher income tax bracket.
What is the Pension Commencement Lump Sum (PCLS)?
PCLS is often known as 'tax-free cash' or a 'tax-free lump sum'. It's a tax-free payment which most people can receive when they start accessing their UK pension benefits and it's normally 25% of the value of the pension benefits being accessed.
It's important to get advice on how to invest a lump sum. We can provide you with a number of options that will suit your individual circumstances.
Your fund will be subject to the Lifetime Allowance
Which means that if it grows beyond the LTA limit of £1,055,000 you could be liable to pay tax of 55% on the surplus.
What is the Lifetime Allowance limit? and how much is the Lifetime Allowance tax charge?
The Lifetime Allowance limit is currently £1,055,000. You usually pay tax if your UK pension funds are worth more than this limit.
You don't pay the tax charge until you take your pension savings over and above your Lifetime Allowance - and how you take those pension savings matters. Take them as a lump sum and the charge is 55%.
We can give you free impartial advice to help you keep your tax bill to a minimum.
Your beneficiaries won't pay Inheritance Tax on your pension if you die before 75
But if you die after age 75, then your beneficiaries will be taxed at their marginal rate. We can explain what these current rates are and how Inheritance Tax may impact your beneficiaries.
If you have a UK State Pension
You can claim a UK State Pension abroad if you've paid enough UK National Insurance contributions to qualify. You can get a State Pension statement if you need to find out how much State Pension you may get. To claim your pension, you can contact the International Pension Centre