Pension Release?

[twoods123]

Originally Posted by lakelander

I can't find how to modify my last post. Only spotted my mistake after I posted it. A SIPP is of course a Self Invested Personal Pension

yes this may be correct, but if you need a lump sum now then this is the best option to get your hands on some cash, alot of pensions have lost a hell of a lot of money, i had one client that paid in £77,000 in his pension and its now only worth £41,000, so this should be baired in mind when giving your pension pot away for some else to play with, a sipp can be a good thing, but thats what they said about pensions years ago and look whats happening to these now!! the bottom line is that all investments are a risk, so your better off having the money in a bank, least you know it cannot suddernly drop overnight.

[lakelander]

Originally Posted by twoods123

yes this may be correct, but if you need a lump sum now then this is the best option to get your hands on some cash, alot of pensions have lost a hell of a lot of money, i had one client that paid in £77,000 in his pension and its now only worth £41,000, so this should be baired in mind when giving your pension pot away for some else to play with, a sipp can be a good thing, but thats what they said about pensions years ago and look whats happening to these now!! the bottom line is that all investments are a risk, so your better off having the money in a bank, least you know it cannot suddernly drop overnight.

As I stated in my original post whether this is the best option is something that should be determined with independent advice.

It is possible to release a lump sum from your UK pension depending on your age and the type of scheme. As stated by another poster this is normally limited to 25% although if it's an occupational scheme with protected cash it can be higher.

These schemes prey on people who are eager to get their cash out. They charge large commissions which can be much more than 15%. Furthermore they are against UK revenue regulations and if found out you will be subject to a heavy tax penalty on the total fund.

I agree that a lot of pension plans have lost a lot of value but so have all forms of investment. SIPP's can be a good thing but are normally for the more sophisticated investor with a fairly large investment as the charges generally tend to be higher than with a normal personal pension.

You cannot apply one rule to all as it depends on each individuals circumstances. Someone with 10 years or more to retirement should not be overly concerned with the present large drop in value as the markets will bounce back as they always have. However if that someone has 2/3 years to retirement then it's a different story. Ideally they should have already moved their funds to safer investments, i.e cash, fixed interest, to protect the capital already built up in view of retirement.

Similarly as regards leaving your money in the bank. Yes your money should be safe (although how safe would it be at the minute if it hadn't been for the billions the UK taxpayer spent bailing them out). but over time inflation will eat away at the value of it. Again it comes down to your attitude to risk. If you're a cautious investor you'll be happy with this. If you're a balanced or adventurous investor then you won't be happy with the returns available from a bank account.

As you stated all forms of investment are a risk so it's better to get professional advice on your individual circumstances before coming to any decision.

[twoods123]

Originally Posted by lakelander

As I stated in my original post whether this is the best option is something that should be determined with independent advice.

It is possible to release a lump sum from your UK pension depending on your age and the type of scheme. As stated by another poster this is normally limited to 25% although if it's an occupational scheme with protected cash it can be higher.

These schemes prey on people who are eager to get their cash out. They charge large commissions which can be much more than 15%. Furthermore they are against UK revenue regulations and if found out you will be subject to a heavy tax penalty on the total fund.

I agree that a lot of pension plans have lost a lot of value but so have all forms of investment. SIPP's can be a good thing but are normally for the more sophisticated investor with a fairly large investment as the charges generally tend to be higher than with a normal personal pension.

You cannot apply one rule to all as it depends on each individuals circumstances. Someone with 10 years or more to retirement should not be overly concerned with the present large drop in value as the markets will bounce back as they always have. However if that someone has 2/3 years to retirement then it's a different story. Ideally they should have already moved their funds to safer investments, i.e cash, fixed interest, to protect the capital already built up in view of retirement.

Similarly as regards leaving your money in the bank. Yes your money should be safe (although how safe would it be at the minute if it hadn't been for the billions the UK taxpayer spent bailing them out). but over time inflation will eat away at the value of it. Again it comes down to your attitude to risk. If you're a cautious investor you'll be happy with this. If you're a balanced or adventurous investor then you won't be happy with the returns available from a bank account.

As you stated all forms of investment are a risk so it's better to get professional advice on your individual circumstances before coming to any decision.

Quiet agree with a lot of what your saying, i suppose like you said it depends on the individial, if you need money quick its a perfect solution, who wants to be the richest person in the grave yard.

thanks for the comment.

[UKMarbella2009]

Ok, well I may dissapoint a few people with this post, but as they say if it sounds to good to be true !!

I won't say who I work for to avoid this coming across as an advert for my services.

However I have worked as a financial advisor in the UK for a major bank, and now work offshore for a Gibraltar based company. Dealing with QROPS ( offshore pension schemes)

Essentialy the EU law has forced the UK government to allow UK pensions to be moved offshore if a UK resident desides to relocate to another country.

HOWEVER the HMRC has stricht conditions over how this pension transfer happens.

One of the conditions is that the new offshore pension has the characteristics of a pension scheme i.e. it is not all cashed in.

There have been regions that have been 'bending' the rules e.g. Singapore and New Zealand.

In the past if you moved your pension into a singapore scheme (via companies such as those in southern Spain), you could access all your UK pensions in cash (but not the state pension). HOWEVER the HMRC got wise to what has happening, shut down singapore as a jurisdiction, and demanded 55% tax from all those pensioners that had abused the system. YES 55% of your pension has to be paid back to the UK government, no matter what you have done with the money. The remaining money was 'frozen' in the singapore scheme by the HMRC (if it had not been cashed in)

It is likely New Zealnd will soon go the same way due to their 'dodgy' interpretation of the QROPS rules.

There's not enough space to go into full details here. But contact the UK HMRC, and they will explain what you can and cannot do with any pension you move offshore.

The main benefit if you move your pension offshore correctly, is that you do not have to buy an annuity (as you do in the UK), so the money can be passed to beneficiaries.

There are many good companies, that provide good QROPS schemes, and equally as many that flout the rules, promise you the world, and take your money.

[expat76]

Originally Posted by smithy45

I have seen several companies advertising in the english free papers, sur in english, Euro Weekly etc claiming that they can release your UK private pension.

This got my attention because I have a UK private pension fund, and I dont know if anyone has been keeping up with current affairs but pension funds are really in big trouble with the financial collapse and forecast to plummet further.

So if the companies I have seen advertising can do what they claim they can do, and release all my pension fund then thats something that I would seriously consider, as I think I would be better off investing the money from my pension myself rather than leaving it where it is and watching it diminish even further, and things are pretty tight at the moment so a little extra cash would not hurt either.

So I am just wondering if anyone has any experience in dealing with any of the companies advertising. Are they for real?

From what I have read, the most it is possible to release from a UK pension is 25% so it all sounds a bit too good to be true perhaps...

In answer to the above, with my situation I decided to look at pension release when I was made redundant, approaching my 50th birthday. It turned out to be the best option for me. I released enough cash from my pension to be able to clear my mortgage and the money that was left should give me a reasonable pension when I do come to retire. There are a few a companies out there that offer this so it's important you do your research before going through with it. In the end I decided to go with a company called braemar and so far they have been pretty good.

[UKMarbella2009]

Originally Posted by expat76

In answer to the above, with my situation I decided to look at pension release when I was made redundant, approaching my 50th birthday. It turned out to be the best option for me. I released enough cash from my pension to be able to clear my mortgage and the money that was left should give me a reasonable pension when I do come to retire. There are a few a companies out there that offer this so it's important you do your research before going through with it. In the end I decided to go with a company called braemar and so far they have been pretty good.

Blimey, it's difficult to explain to people

QROPS is designed to replicate a UK pension, NOT allow cash release. So the HMRC government are clamping down on jurisdictions that have done so

Anyone who has cashed in their full pension through a Singapore scheme, are now being chased for a 55% tax bill by the UK government. Regardless of what they have done with the cash. Singapore was shut down for flouting the rules. Gibraltar, Hong Kong, and New Zealand may be next

If you have cashed in your pension fully, it is a strong likelihood, if not a certainty that eventually you will have to pay 55% of that pension back to the HMRC. No matter what you have done with the cash, where you are in the world, or how old you are

[Suenneil]

Originally Posted by UKMarbella2009

Blimey, it's difficult to explain to people

QROPS is designed to replicate a UK pension, NOT allow cash release. So the HMRC government are clamping down on jurisdictions that have done so

Anyone who has cashed in their full pension through a Singapore scheme, are now being chased for a 55% tax bill by the UK government. Regardless of what they have done with the cash. Singapore was shut down for flouting the rules. Gibraltar, Hong Kong, and New Zealand may be next

If you have cashed in your pension fully, it is a strong likelihood, if not a certainty that eventually you will have to pay 55% of that pension back to the HMRC. No matter what you have done with the cash, where you are in the world, or how old you are

Hi

If what you are saying is true (and trust me Im not suggesting you are telling lies! lol) then its very very worrying for people that may have gone ahead and released money ..... if this is the case then wouldnt the individuals be able to get some redress for bad advice ? incorrect or misleading advice ?

Sue

[UKMarbella2009]

Originally Posted by Suenneil

Hi

If what you are saying is true (and trust me Im not suggesting you are telling lies! lol) then its very very worrying for people that may have gone ahead and released money ..... if this is the case then wouldnt the individuals be able to get some redress for bad advice ? incorrect or misleading advice ?

Sue

Don't belive me I'm an innocent poster

Speak to the HMRC, or a company selling QROPS qho are regulated by FSC or FSA

The ones flouting the rules are offshore brokers who are unregulated, or the regulation is so light it wouldn't apply to expats. There are 100's of them out there, in fact most offshore brokers are unregulated

I've been part of the team constructing a new QROPS in Guernsey. We have written to the HMRC with details off the QROPS schemes that are flouting the rules.

[UKMarbella2009]

I meant don't believe me I'm just an 'anonymous' poster, like everyone else here

[mrypg9]

Originally Posted by Brendanwest

Yes indeed there are several companies advertising for this now. My wife and I both used the services of one such company based in Alhaurin El Grande a few months ago to cash in both our UK private pension funds.

Without going in to too many details, the process basically involved transferring our UK SIPPS to an offshore SIPP account (as everyone is legally entitled to do). It took 7 weeks for my pension to go through the lengthy legal process, and 9 weeks for my wife's fund.

Once the pension funds are offshore then basically they can be cashed in, and the value of the pension transferred to an offshore account (for tax efficiency purposes).

Obviously it cost a fair bit to set this up. The legal fee's for both my wife and myself's sizeable pensions amounted to over 15% of the value of each of the funds. We have no regrets though as if we had left them where they were however then I have little doubt the value of our pension funds would be worthless within the next year, as from all the forecasts I have seen pension funds are undoubtedly headed towards the proverbial iceberg! We have already reinvested most of the money in to safe investments that we have control over.

Obviously you have to be a bit careful with who you trust your pension fund with, this is Spain afterall. So if smithy45 (or anyone else) want details of the people I used in Alhaurin then feel free to send me a PM.

We have a SIPP as well as other investments and are doing what you have done. We have already taken the maximum chunk permitted to date and reinvested here in Spain with a very reputable Spanish bank at a rate almost four times that we were receiving from the UK. Our fund manager has also reinvested chunks in UK institutions which are offering more attractive returns.
I have my doubts as to whether interest rates in Spain will remain at the current level for long, though, so we are keeping our options open. We are fortunately not reliant on the SIPP as our only source of future income as we both have other sources, although as these are paid in sterling, their value has depreciated by over 25% during the last year.
Our SIPP was accrued from the proceeds of the sales of commercial properties: sales which by sheer luck were concluded before the crisis took hold..
There is a God
ADDENDUM:
I have just read the previous posts which weren't visible as I was writing and I must say we did not go the QROPS route. I am sure that what has been written about QROPS is correct. We were advised this was the case by our Offshore Bank. As someone said, what seems too good to be true usually is. There are very strict rules governing SIPPS as anyone with such a scheme has benefited from generous tax relief from HMG.
FURTHER ADDENDUM: So we haven't done exactly what you have done, Brendan, as SIPPS and QROPS don't mix. We have maximised the possibilities within the rules of the SIPP., having taken advice from the fund manager.