UK Pension Review, QROPS, LTA Limits
How often do you review your pension?
Financial experts have likened reviewing your pension pots to going to the dentist. Both are annual necessities, but are also tasks that resident Brits and expats alike often procrastinate until they are faced with a problem. Even if you’ve recently had a UK pension review and all of your schemes are performing on target, savvy financiers know that it is important to continually redefine savings objectives and alter investment strategies accordingly. The local and global economic climate is constantly changing. Seeking advice from a professional in any of the following scenarios enables you to get the most out of your money and comfortably maintain your lifestyle during retirement years.
On April 6, 2016 the UK’s Lifetime Allowance (LTA) decreases from £1.25 million to £1 million. If you are nearing the £1 million LTA limits, a pension review may be a good idea.
The Telegraph reports that the average Briton will change employers six times during their career, whether in the same industry or a different one entirely. Each new job typically means automatic enrollment in a new pension scheme. Reviewing your all of your pensions and consolidating smaller funds into a single pot not only makes them easier to manage, but could also yield more money. Older pensions may not be as lucrative and competitive as modern schemes. They may also have steep management charges. Each pension should be reviewed individually, however, as transferring certain types of occupation pensions could forfeit guaranteed annuity rates. There may also be exit fees.
Occupational changes aren’t the only life events that warrant a UK pension review. At Alconbury Trust, we recommend a consultation:
- Before a divorce
- When moving out of the country
- Upon receiving death benefits
- As you approach retirement age
Each of these happenings has a significant impact on your finances. You may need to adjust the risk level of your pension, transfer assets to an offshore account or change your investment strategy altogether.