UK pensions will face more risks due to Brexit, it has been warned. Spurred on by low gilt yields, pension deficits climbed to a record £935bn in June, bringing on a mass of complications for defined benefit (DB) pension schemes.

Nigel Green, founder and chief executive of deVere Group, said that “companies not putting enough into pensions” was a factor in further exacerbating pension deficits.

Gilt yields fell below 1 per cent last month for the first time in history, driving up transfer values and putting more pressure on pension schemes in the process.

Continue reading (FT Adviser) →

If any good has come from the misery that has unfolded at Tata Steel and BHS, it is that their troubles have helped to shine a much-needed light on the pensions timebomb that is ticking across corporate Britain.

Thousands of companies, public and private, big and small, are weighed down by the burden of growing pension scheme black holes, and for some the load is life-threatening.

The Tata and BHS debacles have sharpened the minds of politicians as experts warn that Britain now faces a very real pensions crisis, with several schemes close to collapse unless serious steps are taken to address the growing problem.

Senior MP Frank Field is so concerned that he has promised to investigate the pension system, a move that could see the bosses of the firms most at risk forced to explain to Parliament what plans they have in place to ensure workers’ retirement schemes are guaranteed.

Continue reading (The Telegraph) →

BRITAIN must get out of the EU to protect pension pots and prevent the creation of a federal tax system, voters have been warned.

Edi Truell, former chairman of the London Pension Fund Authority and founder of the Pension Insurance Corporation, has said that he is backing a Brexit to protect British pensions.

His stark warning over the terrible cost of staying in the EU comes amid further revelations that Brussels wants to take control of the British tax system with a European tax code imposed across the 28 member states.

Mr Truell, now chief executive of Disruptive Capital Finance but who was in charge of one of Britain’s biggest public sector pension pots covering 130,000 people and with £18 billion worth of assets, said that Brussels will demand “15 times the entire British defence budget” from the UK when it takes control.

Continue reading (Daily Express) →

Two countries have half the world’s retirement wealth. Britain has only one fund in the top 50 – but the BBC nearly makes the top 200. Andrew Oxlade offers lessons from the top 300.

Reports on the pensions industry can be dull and are easily overlooked.

One such study published last week attracted few headlines yet offered wonderful insights.

The world’s 300 largest pension schemes, a study put together by Towers Watson, allowed for interesting conclusions to be drawn on who owns the world’s retirement wealth – and what that says about how each country will meet future pension costs.

First, I was surprised that only one British scheme made the top 50: BT Group which has accumulated $68bn to ensure it can pay employees past and present sufficient retirement income.

The next biggest British pensions were the Universities Superannuation Scheme, with big banks’ and utility companies’ schemes close behind.

BT may have only just made the top 50 but lower sections of the list were loaded with UK pensions.

Continue reading (The Telegraph) →

People trying to access their pensions under government reforms are complaining that many pension providers will not give them their money.

The changes mean that anyone over the age of 55 should be able to get cash out of their pension, subject to tax.

But some companies are not allowing savers to withdraw repeated lump sums from their pension pots.

Others will not allow their clients to cash in the whole pot – and cannot promise to do so in the near future.

Terry Fletcher, a 65-year-old former salesman from Surrey, said he had been unable to withdraw cash from a pension pot.

He said that the company involved – Zurich – told him it was not possible to take any money out.

“All I want to do is draw it as cash,” he told the BBC.

“It was all excuses. But you can’t get access to your money. It seems the government came out with these proclamations, but when you try and do it, there are a number of stumbling blocks.”

Continue reading (BBC News) →

HMRC has delisted thousands of overseas schemes that could previously accept pension transfers from Britain

Continue reading (The Telegraph) →

Swapping your final salary pension scheme for cash has become more attractive because of the new pension freedoms. But some savers are being offered far better deals than others.

George Osborne’s changes to how people can manage their retirement pot begin next month. These are some of the myths about it.

There is just over a month to go before the new pension freedoms are introduced. Those with defined contribution pension schemes, also known as money purchase plans, will be able to dip into their retirement savings or blow the entire pot from the age of 55.

The scale of the changes, announced less than a year ago, has left many people confused. We tackle 10 myths about what the freedoms mean for you.

1. Insurers will let me use my pension like a bank account from April

There’s nothing in the pension legislation forcing insurers to apply the new rules to existing policies. Indeed, some insurers, particularly those that are no longer interested in attracting new customers, may not offer any of the pension freedoms at all, while others simply have not been able to update their systems in time. As a result, 6 April could be a bit of an anti-climax.

Alan Higham, retirement director at Fidelity, the investment firm, said: “Your pension scheme or company can stick to the original deal of offering you just an annuity. You may well have to move to a new pension provider if you want to access your savings earlier.”

And bear in mind that transferring between providers is not always a quick process. You could have to wait a few weeks, or even a few months, to dip into your pot.

2. I can cash in my pension pot tax-free

There are growing fears that pensioners do not realise that only 25% of your pot is available to be taken tax-free. The rest will be taxed as income as it’s withdrawn from your pot, incurring rates of 20%, 40% or even 45%. Crucially, this means taking out a large amount of your pension – or even cashing in the whole pot – to pay for a home extension or a new property could push you into one of these higher tax brackets, resulting in a large tax bill.

Continue reading (The Guardian) →

If you have a UK pension, from a company or private scheme then this site will be a useful resource for you, to learn more about the UK pension system, what opportunities you have as an expatriate living in Thailand, and how future pension changes may affect you.

Leaving that pension in a UK scheme could be very costly to your future income, tax position and restrict the income which your family can enjoy when the inevitable happens.

Continue reading Welcome to QROPS Thailand →

A good analysis on the pros and cons of transferring a final salary pension. This relates to a UK transfer rather than a QROPS transfer which offers many more advantages when it comes to taxation on the income for an expatriate

Some final salary pension members are keen to take advantage of George Osborne’s new freedoms. But should they?

Hundreds of thousands of savers with “final-salary” pensions, which are considered the crème-de-la-crème of company pensions, are planning to trade in their future guaranteed income for a cash lump sum.

It is estimated that as many as 10pc of the 3.7 million private sector workers who are yet to start drawing their final-salary pensions will choose to forgo their generous guaranteed benefits and take the money as a lump sum instead.

In recent years these generous “gold-plated” pensions, which pay a guaranteed income linked to the worker’s wage at retirement, have become a dying breed. For millions of workers they have been replaced by the less generous “defined contribution” pensions. With these the employer pays a fixed amount in on a worker’s behalf. What they get at the end depends on investment returns, among other factors, and there are no guarantees.

But the huge attractions of final-salary-type schemes are expected to be outweighed by the new freedoms, first outlined by the Chancellor in his March Budget, which come into force in April 2015 but which only apply to defined-contribution plans. So to benefit, final-salary members would have to transfer their accrued benefits out of their scheme.

Continue reading (The Telegraph) →