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Assurance Vie

For expats living or retiring in France, an assurance vie is a tax efficient investment product which should be considered if you intend to live in France for a long time.

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Who needs an Assurance Vie?

When moving abroad as an expat, it is surprising how often tax-efficient investments in your home country can become a tax burden in your new location. Expats who move to France are often met with this same dilemma where the income and gains from ISAs and other such investment arrangements are fully taxable, incurring hefty payments which often counteract the potential growth these vehicles offer. Luckily, the Assurance Vie is a convenient and effective way around this as you are not required to pay tax on any investments within it until you make a withdrawal. As one of France’s most tax-efficient structures, this tax wrapper is one of the most popular ways to save for retirement or later life while growing wealth and minimising tax liabilities.

What is an Assurance Vie?

The Assurance Vie is a life insurance wrapper that holds your investments and offers tax relief on them that improves the longer you hold the policy. If you withdraw a sum from the Assurance Vie, you will only pay tax on the gain element of the withdrawal and not the original capital. Once you have held an Assurance Vie policy for 8 years or more you will be entitled to an annual tax-free allowance of €4,600 or €9.200 for married couples.

What are the benefits?

  • No tax is paid on investments until withdrawals are made.
  • Tax is paid only on the growth element of a withdrawal.
  • Annual tax-free withdrawal allowance after 8 years.
  • Reduced inheritance tax for beneficiaries (for premiums invested under the age of 70)
  • An effective way to consolidate assets.

There are also Assurance Vie policies based outside of France known as International Assurance Vies. These offer their own distinct set of benefits such as greater flexibility for those moving throughout the EU, documentation written in English, for easier comprehension and the option of investing assets that are in different currencies.

How flexible is an Assurance-Vie

An Assurance Vie can be tailored in several ways to suit your needs and requirements. Firstly, you can choose the risk level of your investment portfolio to suit your own personal tolerance and select the products that your savings are invested in. Secondly opting for an international Assurance Vie, as opposed to a French Assurance Vie, you can invest assets that are in currencies other than euros, like sterling or US dollars, for example. Finally, an Assurance Vie is not locked, meaning that should you want to, you can access and withdraw your investments at any time, although the tax implications of such a decision would obviously differ depending on the point at which the withdrawal is made.

How can an Assurance Vie benefit my beneficiaries?

An Assurance Vie is not only tax-efficient when it comes to withdrawals and saving, but it is also an effective way to minimize the often hefty taxation imposed by French success laws  when passing on your estate after your death. With an Assurance Vie policy, you can leave up to €152,500 per beneficiary, tax-free, whether they are a blood relative or not. Without an Assurance Vie, the tax-free allowance for non-relatives is only €1594. There will be a 20% tax imposed on the next €700,000 and a further 31.25% on anything above that.

How are Assurance Vies taxed?

Since 2017, a new flat rate of 30% has been brought in on withdrawals from Assurance Vies; this is made up of 17.2% social charges and 12.8% income tax. The exception to this is Fond en Euros investments which are taxed slightly differently due to the security they offer.

Due to the varying efficiency of different investment vehicles depending on your location, the chances are that you will need to reevaluate your investment strategy when moving to France from another country. Whilst the Assurance Vie is often the best solution for retired and working expats looking to stay in the country long term, the type of policy that is right for you will differ depending on your personal circumstance and financial objectives. In order to ensure that you are making the right decision when it comes to securing your financial future it is always best to seek the advice of a financial adviser. This is especially relevant when it comes to arranging your finances in a country where the processes and regulations might differ from those you are used to back home. At Blacktower, we have a team of experienced advisers based in France and across the EU who can offer sound, face-to-face advice on how best to take advantage of the Assurance Vie and all its benefits.

To discuss whether an Assurance Vie might be right for you, get in touch today using the details below to arrange a no-obligation, complimentary consultation with one of our advisers.

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Asset management

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Whether it’s managing an international pension fund or administering multiple real-estate properties, it’s safe to say that many of us are fairly unfamiliar with the deeper nuances of asset management.

In fact, if you’ve only recently come into wealth or have only just begun considering how you might be able to grow the value of your financial possessions, you might be unfamiliar with what capital asset management is.

To help you understand if you should seek assistance to grow your personal wealth, and if working with an asset management company is right for your needs, here’s everything you need to know about the process.

What is asset management?

In layman’s terms, having assets under management refers to the day-to-day running of what’s known as a wealth portfolio, which is often carried out by an outside firm or qualified individual.

The goal of this form of wealth management is to boost the financial capital of your asset portfolio over time by acquiring, maintaining, and trading assets that have the potential to grow in value, ultimately providing you with a greater return on your investment.

All of this is also done under the express guidance of maintaining an acceptable level of risk for the client’s capital. Said level of risk is dictated by the client and acts as a guide on what sort of investment actions can and can’t be taken with the portfolio.

Typical areas that are usually covered by capital asset management can include, but are not limited to:

  • Stocks
  • Bonds
  • Real estate
  • Commodities
  • Mutual funds

Technically speaking, this process can be carried out by yourself, especially if you want total control over your assets and finances. However, this can be a time-consuming process, especially if you aren’t knowledgeable in this area of finance. It can often be much easier to seek the assistance of a financial advisor, like those at Blacktower.

How does asset management work

As the name implies, assets under management are either handled by individual advisors or asset management firms. Regardless of which you choose to work with, once you decide to seek asset management services, you’ll be assigned a representative to work with you.

Once in contact with you, the first thing your new portfolio manager will do is meet with you and go through your asset portfolio to garner an understanding of your long-term financial goals and what you want to get out of their services.

After this initial discussion, your portfolio manager will then work with you to create an investment plan unique to your needs, with the end goal of maximising the value of your assets over time at a level of risk acceptable to you. They may also advise you on what level or risk to avoid, depending on the contents of your assets.

From here, your manager will use this knowledge to make investments on your behalf. This is typically done through in-depth research into current or future market trends, reviewing corporate finances, and other relevant sources of information. They will then continually monitor and tweak your portfolio in order to diversify its contents with higher-value assets.

What are the different types of asset management?

As with many areas involving finance, asset management services fall into a variety of categories. Each of these offer differing levels of service, and will monitor and tailor your investments in relation to independent degrees of fiduciary responsibility – whether or not they’re bound by law to make decisions for their client’s portfolio based on good faith.

Financial advisors

One of the most common types of global asset management options, opting for the aid of a financial advisor will give you access to a professional adviser who works within a specific financial area related to your needs.

An advisor of this kind will actively recommend the types of investments you should make with your assets for the best return on your investments. They can also buy and sell your capital, assuming you agree to this in the contract.

However, the level of fiduciary duty financial advisors have can vary between each person and firm, so it’s best to check this with them beforehand.

Investment brokers

Much like a financial advisor, an investment broker can be both a single individual or a member of one the of various asset management firms available in your area. They can perform many of the same duties as a financial advisor but tend to focus on stocks, bonds, and mutual funds.

Like financial advisors, investment brokers often don’t have a set fiduciary duty, so you should be sure of where your desired investment broker stands on this matter before you agree to any advisory assistance.

Registered investment advisors

Asset managers that fall under registered investment advisors belong to firms that can advise clients on risk before managing their portfolio options. Where they differ from other advisors, however, is in their legal obligations.

As the name implies, a registered investment advisor is highly regulated, almost always registered under the appropriate local government body, ensuring that they take actions that are in line with your fund’s best interests.

Computer advisor

Highly affordable but also rather uncommon, this type of asset management involves the use of a computer algorithm to monitor and rebalance your portfolio, selling and buying according to the goals and risk tolerances you’ve previously laid out.

These advisors are rising in prevalence thanks to their ease of maintenance and are often recommended for those with smaller financial investments.

Is asset management right for you?

Although opting for an asset management service can be a useful tool, it’s not for everyone.

In many cases, the costs associated with asset management often mean it’s only feasible for those with a sizeable asset group and money. There is also often a minimum investment level to consider on top of this, which can be a hurdle for many looking for financial assistance who don’t meet the initial requirements.

Costs for this kind of service can also vary greatly, ranging anywhere from brokerage and additional fees associated with each transaction to an annual percentage cost based on the total value of your fund.

In some cases, it may actually be easier for you to use alternative investment options, such as ISAs, to facilitate your capital growth goals, though there is no harm in speaking with an advisor beforehand to understand your options.

At the end of the day, whether or not the use of asset management services is right for you will come down to how much you’re willing to invest in your portfolio, and what you want to get out of your capital in the long run.

To see whether you or not you might qualify for the minimum asset management requirements, you can get in touch with our team of financial advisors for more information.

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International mortgage solutions

Overseas Mortgage Guidance You Can Trust

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When it comes to buying a property overseas, there are many factors you’ll want to take into account to make your purchasing experience as simple and stress-free as possible.

It’s essential to ensure the right funding, understand and adhere to local rules and regulations, and enlist the help of an experienced, well-respected financial advisor who possesses the required local knowledge to put your mind at ease.

Doing any one of these things is liable to make the process of purchasing property overseas easier to navigate, enabling you to move into your dream property quicker while preventing pitfalls in the future.

Of course, when it comes to financing the purchase of a property overseas, cash upfront payments are not always the most feasible finance option.

If you truly want to invest safely when buying a property, then you should always look to secure an international mortgage solution, such as those financed by the international mortgage advisers we work with here at Blacktower.

What is an international mortgage?

An international mortgage, also known as an expat mortgage or overseas mortgage, is exactly as it sounds. These are mortgages specifically provided to expats in order to help them finance buying a property overseas.

Overseas mortgages can be used to buy permanent property overseas now or during retirement, holiday homes, or as a buy-to-let investment to act as another source of income.

While the prospect of applying for an overseas property mortgage might seem intimidating, there are numerous specialist overseas mortgage lenders in the UK and abroad who can offer financial services, provided you can meet the required criteria.

Important things to know about applying for an expat mortgage

First and foremost, you should be aware of that there are two main ways to apply for an overseas mortgage, either of which might be suitable for your needs. These include:

  • Financing your mortgage with a dedicated international mortgage provider, such as those we work with here at Blacktower.
  • Financing your mortgage through a UK-based mortgage lender.

It’s important to note that, due to the variations in rules and regulations when buying property overseas, the process of applying for an overseas property mortgage may take longer than initially anticipated.

Unlike in countries such as the UK, it’s not uncommon for international mortgage lenders to focus on the size of your salary, rather than the amount of your deposit, when it comes to the size of your mortgage. This is mainly to ensure you can afford any expat mortgage repayment costs.

On top of this, many countries have strict rules when it comes to debt and applying for mortgages. In many cases, if your total debt is greater than a certain percentage of your salary, you may be denied an international mortgage.

You should also be aware that it may take overseas mortgage lenders longer to assess if you have bad credit, and may require you to pay a larger, non-refundable deposit, though this will be dependent on the country and their laws surrounding buying a property.

To find the best possible expat mortgage solutions, it’s suggested you work with an experienced mortgage broker with clear experience in managing other mortgages for expats.

An experienced mortgage broker will be able to:

  • Find you a mortgage with the best interest rates.
  • Handle your mortgage paperwork.
  • Negotiate the terms of your mortgage deal.
  • Arrange any required transactions.
  • Thoroughly assess and vet any contracts on a legal level before you sign.

Is there a difference between mortgages for owner and investment properties?

When it comes to expat mortgages for owner and investment properties, there is little to no difference between seeking an overseas property mortgage for either property type.

While countries like the UK and USA will offer buy-to-let schemes to facilitate investment purchases, the majority of countries do not have similar schemes. Many also don’t account for existing or new rental income when assessing affordability.

This can cause problems for clients who have an existing investment portfolio containing other mortgages, but should in no way deter you from seeking further property investments.

By working with experienced mortgage brokers, such as those providing international mortgage solutions with Blacktower, you’ll have a safe and secure way to navigate this issue.

How do I repay an international mortgage?

Overseas property mortgages, particularly in Europe, tend to be repayable in either variable or fixed repayment rates, unless you’re making a purchase of over €2 million.

If you’re making an investment of this size, then it’s likely that Interest only options may be considered.

Locations available for this service

We work with expats looking to various locations, including:

  • Spain
  • France
  • Portugal
  • Italy
  • Holland
  • Germany
  • Switzerland
  • Ireland
  • USA

If you want to know more about moving to or finding mortgages for expats in a specific country, why not read through our relevant location guides?

Here at Blacktower, we work with those offering professional international mortgage solutions to assist you in the purchasing or refinancing of property overseas, including a wide range of locations from Europe to the USA.

Whether you are looking to buy for investment, work, holidays, or retirement, we have the expertise and knowledge to arrange the most suitable mortgage for your personal circumstances.

We offer a tailored service that is specific to each client’s situation, with the minimum and maximum loan amount being determined on a case-by-case basis, all subject to your overall personal financial profile and property valuation.

Whether you’re just beginning your search, have already found your dream property, or wish to carry out improvements to an existing overseas property you already own, we’re here to equip you with the advice you need to make decisions that safeguard your future.

Contact us below to arrange a free overseas mortgage assessment or to enquire further about any of the services mentioned:

Talk to us today

For more information on International mortgage solutions Contact Us Today

Our Services

International mortgage solutions

Overseas Mortgage Guidance You Can Trust

Talk to us today

When it comes to buying a property overseas, there are many factors you’ll want to take into account to make your purchasing experience as simple and stress-free as possible.

It’s essential to ensure the right funding, understand and adhere to local rules and regulations, and enlist the help of an experienced, well-respected financial advisor who possesses the required local knowledge to put your mind at ease.

International Mortgage Brokers

Doing any one of these things is liable to make the process of purchasing property overseas easier to navigate, enabling you to move into your dream property quicker while preventing pitfalls in the future.

Of course, when it comes to financing the purchase of a property overseas, cash upfront payments are not always the most feasible finance option.

International Mortgage Lenders Experts

If you truly want to invest safely when buying a property, then you should always look to secure an international mortgage solution, such as those financed by the international mortgage advisers we work with here at Blacktower.

What is an international mortgage?

An international mortgage, also known as an expat mortgage or overseas mortgage, is exactly as it sounds. These are mortgages specifically provided to expats in order to help them finance buying a property overseas.

Overseas mortgages can be used to buy permanent property overseas now or during retirement, holiday homes, or as a buy-to-let investment to act as another source of income.

While the prospect of applying for an overseas property mortgage might seem intimidating, there are numerous specialist overseas mortgage lenders in the UK and abroad who can offer financial services, provided you can meet the required criteria.

Important things to know about applying for an expat mortgage

First and foremost, you should be aware of that there are two main ways to apply for an overseas mortgage, either of which might be suitable for your needs. These include:

  • Financing your mortgage with a dedicated international mortgage provider, such as those we work with here at Blacktower.
  • Financing your mortgage through a UK-based mortgage lender.

It’s important to note that, due to the variations in rules and regulations when buying property overseas, the process of applying for an overseas property mortgage may take longer than initially anticipated.

Unlike in countries such as the UK, it’s not uncommon for international mortgage lenders to focus on the size of your salary, rather than the amount of your deposit, when it comes to the size of your mortgage. This is mainly to ensure you can afford any expat mortgage repayment costs.

On top of this, many countries have strict rules when it comes to debt and applying for mortgages. In many cases, if your total debt is greater than a certain percentage of your salary, you may be denied an international mortgage.

You should also be aware that it may take overseas mortgage lenders longer to assess if you have bad credit, and may require you to pay a larger, non-refundable deposit, though this will be dependent on the country and their laws surrounding buying a property.

To find the best possible expat mortgage solutions, it’s suggested you work with an experienced mortgage broker with clear experience in managing other mortgages for expats.

An experienced mortgage broker will be able to:

  • Find you a mortgage with the best interest rates.
  • Handle your mortgage paperwork.
  • Negotiate the terms of your mortgage deal.
  • Arrange any required transactions.
  • Thoroughly assess and vet any contracts on a legal level before you sign.

Is there a difference between mortgages for owner and investment properties?

When it comes to expat mortgages for owner and investment properties, there is little to no difference between seeking an overseas property mortgage for either property type.

While countries like the UK and USA will offer buy-to-let schemes to facilitate investment purchases, the majority of countries do not have similar schemes. Many also don’t account for existing or new rental income when assessing affordability.

This can cause problems for clients who have an existing investment portfolio containing other mortgages, but should in no way deter you from seeking further property investments.

By working with experienced mortgage brokers, such as those providing international mortgage solutions with Blacktower, you’ll have a safe and secure way to navigate this issue.

How do I repay an international mortgage?

Overseas property mortgages, particularly in Europe, tend to be repayable in either variable or fixed repayment rates, unless you’re making a purchase of over €2 million.

If you’re making an investment of this size, then it’s likely that Interest only options may be considered.

Locations available for this service

We work with expats looking to get international mortgages in various locations, including:

  • Spain
  • France
  • Portugal
  • Italy
  • Holland
  • Germany
  • Switzerland
  • Ireland
  • USA

If you want to know more about moving to or finding overseas mortgages for expats in a specific country, why not read through our relevant free guides?

Here at Blacktower, we work with those offering professional international mortgage solutions to assist you in the purchasing or refinancing of property overseas, including a wide range of locations from Europe to the USA.

Whether you are looking to buy for investment, work, holidays, or retirement, we have the expertise and knowledge to arrange the most suitable mortgage for your personal circumstances.

We offer a tailored service that is specific to each client’s situation, with the minimum and maximum loan amount being determined on a case-by-case basis, all subject to your overall personal financial profile and property valuation.

Whether you’re just beginning your search, have already found your dream property, or wish to carry out improvements to an existing overseas property you already own, we’re here to equip you with the advice you need to make decisions that safeguard your future.

Contact us below to arrange a free overseas mortgage assessment or to enquire further about any of the services mentioned:

Talk to us today

For more information on International mortgage solutions Contact Us Today

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Post-Brexit Investment Planning for UK Expatriates in 2025

Expert financial advice for expats

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It’s now five years since the UK officially left the European Union — and yet, Brexit’s long-term financial impact continues to shape the lives of UK nationals living overseas.

For British expatriates across Europe and beyond, the rules of the financial landscape have permanently changed. 2025 marks the era of post-Brexit financial reality, where UK residents abroad must adapt their investment, pension, and tax planning strategies to ensure stability, compliance, and growth.

At Blacktower Financial Management, we’ve been advising UK expatriates for nearly four decades — through economic cycles, regulatory shifts, and political change. Today, we help clients across the EU and worldwide navigate the post-Brexit world confidently, turning uncertainty into opportunity.

1️⃣ Brexit’s Lasting Impact on Expat Investment

When Brexit ended the UK’s membership of the EU single market, it also ended “passporting rights”, which previously allowed UK-regulated financial institutions to operate freely across Europe.

In 2025, that reality remains. The UK and EU financial systems now function independently — and the result for expats is clear:

Many UK-based banks, investment firms, and advisers no longer serve EU residents.

Some UK investment platforms and ISAs have been frozen or closed to clients living abroad.

Cross-border pension transfers and reporting obligations have grown more complex.

For UK nationals living in Spain, Portugal, France, Germany, or the Netherlands, this shift has made it crucial to work with EU-regulated advisory firms like Blacktower that maintain a presence and regulatory status within both the UK and EU.

The message of 2025 is simple: expat investment success now depends on cross-border financial alignment.

2️⃣ The 2025 Economic Environment: Inflation, Interest Rates, and Market Shifts

The years following Brexit have brought further financial headwinds — global inflation, rising interest rates, and geopolitical uncertainty. In 2025, investors face a world where:

Central banks across Europe and the UK are balancing inflation control with growth stimulation.

Currencies have become volatile, particularly the GBP/EUR rate.

Global equity markets are adjusting to post-pandemic, high-interest environments.

For expatriates, this means proactive investment diversification and currency management are more important than ever. Holding all your wealth in sterling or in UK-based products can expose you to unnecessary risk — both from currency swings and from the UK’s domestic economic policy shifts.

At Blacktower, we help clients rebalance portfolios across currencies, geographies, and asset classes, ensuring a smoother, more resilient investment experience in a changing world.

3️⃣ Why Traditional UK Investments May No Longer Work for Expats

While many British nationals maintain long-standing investment portfolios or pension plans in the UK, these arrangements can now be inefficient or even inaccessible once you live abroad.

Common Issues in 2025

ISAs: Once you become a non-UK resident, you can no longer make new ISA contributions — and in most EU countries, ISA income and gains are fully taxable.

UK-based platforms: Many refuse service to EU residents due to post-Brexit regulatory restrictions.

Currency exposure: Living in Europe while holding sterling assets means your income fluctuates with the exchange rate.

Inheritance exposure: UK-based investments may still fall under UK Inheritance Tax (IHT), even if you’ve relocated.

That’s why many UK expatriates are now moving their wealth into EU-compliant, tax-efficient investment structures.

4️⃣ Investment Options for UK Expats in the Post-Brexit Era

The key to successful post-Brexit wealth management is local compliance with global diversification.

✅ EU-Compliant Investment Wrappers

Investment bonds and Assurance Vie policies (available in countries such as Portugal, France, and Spain) have become the preferred investment vehicle for UK expatriates.

They offer:

Tax-deferred growth — income and gains are only taxed upon withdrawal.

Favourable local tax treatment for long-term holdings.

Multi-currency options to mitigate exchange-rate risk.

Estate planning flexibility, allowing you to nominate beneficiaries directly.

These structures comply with EU regulations while offering the same professional investment management and protection you’d expect from a high-quality UK product.

✅ Pension Planning in a Post-Brexit World

For UK expatriates, understanding how Brexit impacts pensions remains vital.

Depending on your circumstances, you may benefit from:

QROPS (Qualifying Recognised Overseas Pension Schemes): Enabling you to transfer your UK pension abroad for greater control, currency choice, and potential tax advantages.

SIPPs (Self-Invested Personal Pensions): Retaining flexibility and access to global investment options for those planning to return to the UK.

Blacktower’s international pension specialists assess your current schemes and long-term residency plans to recommend a structure that offers flexibility, tax efficiency, and peace of mind.

✅ Multi-Currency, Globally Diversified Portfolios

Currency diversification is one of the cornerstones of successful post-Brexit investing.

Holding wealth across GBP, EUR, and USD can:

Reduce volatility caused by single-currency exposure.

Stabilise income for those living on euro-denominated expenses.

Allow tactical investment allocation between global markets.

Blacktower builds multi-currency investment portfolios tailored to your life stage, residency, and risk profile — ensuring your money continues to grow, no matter where you call home.

5️⃣ Post-Brexit Tax Planning for Expats

Every EU country has its own tax regime, and these rules have become even more important for UK expatriates since Brexit.

For example:

In Portugal, the Non-Habitual Residency (NHR) regime continues to offer 10-year tax advantages for new residents.

In Spain, compliant investment structures such as Spanish-compliant bonds remain key to tax efficiency.

In France, Assurance Vie continues to provide one of Europe’s most tax-favourable savings environments.

In Germany or the Netherlands, EU-regulated life assurance wrappers can offer valuable tax deferral benefits.

Without proper planning, UK expats risk double taxation, reduced investment returns, or unexpected liabilities. Blacktower advisers work alongside local tax experts to ensure your investment strategy remains compliant — and efficient — wherever you reside.

6️⃣ Estate and Legacy Planning After Brexit

Post-Brexit, UK inheritance laws no longer align automatically with EU succession rules. If you own property or assets in an EU country, your estate could be subject to local inheritance laws — including forced heirship regulations.

However, tools such as Assurance Vie, international wills, and trust structures can help ensure your estate passes to the right people while minimising tax exposure.

Blacktower’s estate planning specialists work with local legal partners to align your cross-border estate plan with your overall financial strategy — giving you and your family peace of mind.

7️⃣ The Blacktower Advantage in a Post-Brexit World

Navigating investment and retirement planning after Brexit requires expertise that spans both sides of the Channel.

Why UK Expats Choose Blacktower

EU and UK regulation: We’re authorised to advise clients across the UK and Europe.

Local presence: Offices in Spain, Portugal, France, Germany, the Netherlands, and beyond.

Proven longevity: Nearly 40 years of international advisory excellence.

Client-first approach: Independent, transparent, and tailored to every individual.

Our role is simple: to help you build a compliant, tax-efficient, and future-proof investment plan that fits your life abroad.

Plan for the Future — with Confidence

Brexit may have rewritten the rules, but with the right planning, your financial future remains firmly in your control.

Whether you’re retired in the Algarve, working in Amsterdam, or enjoying life on the Costa del Sol, Blacktower’s experienced financial advisers can help you:

Protect your wealth.

Structure your investments tax-efficiently.

Plan your retirement and legacy with confidence.

📞 Book your complimentary consultation today

Let Blacktower Financial Management help you take control of your financial future — in the post-Brexit world of 2025 and beyond.

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Defined benefit pensions

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What is a Defined Benefit pension scheme?

Defined Benefit (DB) pension schemes (often referred to as Final Salary Schemes) gives an employee a pension based on final salary, and length of service. It produces a guaranteed pension on retirement, in contrast to a Defined Contribution (DC) scheme which is simply a pot of money with no guaranteed income. The higher the salary, and the longer the period of service, the higher the pension will be.

Who is a defined benefit pension for?

DB schemes are traditionally very common in the public sector workplace and, to a lesser extent, in the private sector. They typically fall into two categories: those based on a final salary and, in more recent times, those based on a ‘career average’ salary. In the latter case, the term ‘final salary scheme ’ is a misnomer – employers have taken to using an average salary in order to reduce funding requirements.

Many years ago, DBs were seen as an attractive option for those wishing to stay with their employer for a long period of time. However, it is now rare for an employee to stay with the same employer for the whole of their working life. Businesses have also struggled to fund DB schemes because of the cost of committing themselves to providing a guaranteed pension many years in advance of the employee’s retirement age. As a result, many DB schemes are now switching to DC arrangements.

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Advantages of a defined benefit plan

It’s important to assess the advantages and disadvantages of the various pension plans available to you. One of the strengths of a DB scheme is something called ‘escalation’, whereby your pension income rises in line with inflation, albeit with a ceiling – often around 5% – thus protecting the purchasing power of your pension.

Other advantages of a DB plan include the possibility of receiving a full pension – if you have to retire earlier than anticipated due to ill health – and payments to dependants on death, both before and after retirement. The main attraction of a DB pension is that the amount of your pension is ‘predetermined’ regardless of how the scheme’s investments have performed on the Stock Market. In other words, your employer bears all the investment risk on your behalf.

Limitations of a defined benefit plan

While defined benefit pension schemes suit those who stay for many years with the same employer, it may not be the best choice if you change careers often. Companies may require minimum terms of service before you become eligible for the scheme. Employees can’t choose how their money is invested and the rules can be complex but this is generally a small price to pay for a significant pension – in many schemes the employee has to fund only one-third of the cost.

How to calculate your DB pension

Your circumstances and the scheme’s terms and conditions will influence the value of your DB pension. In most cases, you can take your pension at 55 (rising to 57 in 2028) but there would be a reduction for each year you retire early because you can expect to receive the pension for longer. A reduction in pension of 3-5% for each year you retire early is not uncommon and you should check early retirement reductions with your employer for your particular scheme.

To calculate your pension, take the number of years you have been a member of the defined benefit pension scheme, then divide it by the accrual rate (a percentage of pensionable pay – commonly 1/6oth per year of service), and multiply it by your final pensionable earnings.

For example:

  • You’ve worked at your company for 40 years
  • Your final year’s income before tax is £27,000
  • The scheme’s accrual rate is 1/60th
  • Your annual pension income would be £27,000 x 40/60 = £18,000 pa..

Lump sum payments

There may be the option to take a tax-free lump sum in lieu of some of your pension; the amount is determined by the scheme’s actuary and your pension will be reduced in line with commutation factors set by the scheme.

Transfers

Most schemes offer the possibility of transferring the value of your benefits to another arrangement. You must first cease to be a member of the scheme either by leaving the company or by simply opting out of the scheme. The scheme will offer you a Cash Equivalent Transfer Value (CETV) which reflects the scheme’s view of the cash value of your accrued pension.

If you accept the transfer value, you can arrange to have this paid to any other registered pension scheme. By doing so, you will give up the security of regular guaranteed lifetime payments, in return for the flexibility of being able to manage and invest your money where you see fit. There will also be the option to take a tax-free lump sum but this would be a maximum of 25% of the fund value. Under recent legislation, you can withdraw the entire pension pot in one go but this would be very risky and may result in a large tax liability.

A DB pension transfer is an irreversible decision which can affect your retirement income significantly. If you have dependants, or need regular guaranteed income, it may not be the right choice for you. Individuals who usually benefit from transferring their pension are those who aren’t solely reliant on their workplace pension as retirement income and want top pass the value of their fund on to their family – this is not possible with a DB scheme where the only benefit on death is a spouse’s/dependant’s pension.

If you want your retirement income to be in a currency other than Sterling, a Qualifying Recognised Overseas Pension Scheme (QROPS), is worth considering if you have moved abroad for your retirement. The scheme must comply with UK tax law, and it is important to consider the loss of any perks associated with it.

Due to increased regulation, transferring from a DB scheme to another arrangement has become extremely complex. Our financial advisors can provide guidance on how to assess whether such a transfer is in your best interests based upon your personal circumstances.

Gilt yields and transfer values

Bonds held by the UK Government and across the Commonwealth are referred to as gilts. They generally tend to be low risk and, therefore low return but are strongly influenced by the political climate. DB transfer values are affected by gilt yields – rising yields tend to push transfer values down. Gilt yields tend to rise in tandem with rising interest rates, and we have, therefore, seen transfer values fall substantially over the last few years as interest rates started to move up again from 2021.

Defined benefit pension advice from Blacktower

When it comes to advice on defined benefit pensions, you know you are in safe hands with Blacktower, one of the leading wealth management experts in the UK and abroad. Whether you’re keen to provide for your family, or relocate to your dream destination, our highly qualified, multilingual team is here to help. Alternatively, we can also advise you on defined contribution schemes, SIPPs, QROPS, and QNUPS.

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Defined contribution pensions

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What is a defined contribution pension?

A defined contribution (DC) scheme is simply a pension ‘pot’ or fund that you build up over many years. At retirement, there is no guaranteed income – the amount of pension you receive depends on factors such as the amount paid in, the fund’s investment performance, and the choices you make at retirement.

Defined benefit vs. defined contribution schemes

One of the main differences between a defined benefit (DB) scheme is that a DB scheme guarantees a set pension on retirement based on salary and years of service. There is no guaranteed pension available with a DC scheme. DB schemes are often referred to as ‘gold-plated’ because of the guaranteed pension at retirement.

On death (either before or during retirement) a DB scheme usually pays a dependant’s pension payable to your spouse or partner – typically 50% of your pension at the date of death.  

A DC scheme typically pays the whole value of the fund to a nominated beneficiary at death although some older policies may have restriuctions.

Budget 2024

A major impact in the October 2024 Budget was the announcement that unused pension funds will be added to the individual’s estate and may be liable to Inheritance Tax (IHT). If your estate is in excess of £325,000, this could be 40% of your unused DC pension fund. This change is to be implemented in 2027.

How to set up a defined contribution pension scheme

Most companies these days are likely to choose a defined contribution pension plan, and as it is a legal requirement to offer a workplace pension scheme, they will automatically enrol employees if they fit the eligibility criteria. Human resources should provide employees with information on their defined contribution provider within two months of starting with the company. The employer can forecast pension spend as their outgoings are defined from the outset, and many will choose from the top defined contribution providers – large specialists who cost less – while taking advice from the UK Pensions Regulator.

If you are setting up your own private defined contribution pension scheme, it is essential that you seek advice from a wealth management group such as Blacktower to ensure you are investing with the top defined contribution providers. We can help safeguard your assets when it matters most.

Taking defined contribution pension benefits

You can take benefits once you reach the age of 55, but note that this age rises to 57 in 2028. You may, however, be able to draw your pension earlier, if you have a ‘protected pension age’, or if your life expectancy is dramatically shortened.

Income

Estimating the income you are entitled to receive from your defined contribution pension scheme can be useful for planning your retirement and addressing any shortfall in the meantime.

You can set up your pension either by buying an annuity which means that you exchange your pension pot for a guaranteed income provided by an insurance company. The income you receive will depend upon the value of your pot and annuity rates that prevail at the time.

An alternative is to opt for Flexi-Access Drawdown which allows you to draw any amount from your pension pot as and when you need it. Whilst this is an flexible option, there is always the danger that you will run out of money if you withdraw too much each year.

Lump sum payments

If you wish to retire with an accompanying lump sum payment, you can take 25% free of UK tax. The remainder can be used to provide an income – either by purchasing an annuity or by Flexi Access Drawdown. Any income you take will be taxable at your marginal (highest) rate.

Defined contribution pension advice from Blacktower We understand that peace of mind regarding your money is imperative now more than ever. That’s why Blacktower only deals with the top defined contribution providers, to make sure you can look forward to the retirement you deserve. Finding the right scheme can be a lengthy process, but after your initial no-obligation appointment with one of our reliable advisors you’ll be on a smooth path to a secure future. Alternatively, we can advise you on other international pension plans, including defined benefit schemes, QNUPS, SIPPs, and QROPS

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Banking and Finance – Pensions

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The Blacktower Group’s Banking & Finance Client Division has been created to support the needs of our professional clients who have dedicated experience in the field.

This means that the advice that every client receives is not only tailored specifically to their requirements, but the adviser handling their finances is well versed in the nuances of banking pensions.

The advisers servicing this division are primarily ex-banking and finance individuals, with both international and local expertise spanning from some of the world’s leading banks, including Merrill Lynch, Deutsche Bank, SEB, Danske Bank and Dresdner.

How it works

Introduction

Our initial meeting is a no charge, no obligation appointment where your adviser will give you more information about who Blacktower is, and discuss in more detail how our products and services can benefit you.

Understanding our clients
Before giving any advice, it is imperative that we have a clear understanding of the client’s current financial situation, future goals and attitude to risk. This helps us give the bespoke advice that we are known for, and structure a portfolio created around the individual.

6i
Before you receive any form of official counsel from Blacktower, we implement our mandatory 6i methodology.

Simply, six eyes will thoroughly vet the proposed advice before it is sent to you. The first check will come from the paraplanner writing the recommendations. Secondly, this is surveyed by the Head of Department, before being sent to our diligent Compliance team for a final review.

Our investment approach
At BFMI, we believe in long-term investing through a top down approach, with emphasis on costs. The majority of portfolios that we manage will have a large exposure to developed markets through Exchange-Traded Funds (ETFs), with satellite investments into commodities and emerging markets.

Blacktower Banking and Finance Division

The Blacktower Group’s Banking & Finance Client Division is here to support our professional clients. You can get in touch with us today by using our contact form at the top of the page or by calling +350 200 42353. We look forward to assisting you.

Disclaimer: BFMI advisers do not give tax advice. Clients will receive independent tax advice from an external tax professional or seek their own advice.

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Insurance Solutions

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Insurance and retirement solutions for expats in Germany

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Germany is one of Europe’s most dynamic and prosperous countries — offering world-class infrastructure, excellent healthcare, and a high standard of living. It’s no wonder that thousands of expatriates from the UK, US, and across the globe have chosen to make Germany their home.

But for those who relocate, understanding how to protect your wealth and plan for retirement within Germany’s financial and tax system can be complex. The country has a unique mix of state and private pension systems, mandatory insurances, and taxation rules that differ significantly from those in the UK or US.

At Blacktower Financial Management, we’ve been helping expatriates manage their financial affairs across Europe for nearly 40 years. Our advisers in Germany specialise in cross-border financial, insurance, and retirement solutions — helping you secure your financial future with confidence.

1️⃣ Financial Security Starts with Insurance

Insurance plays a central role in German financial planning. For expatriates, understanding which insurances are mandatory, optional, or beneficial is key to protecting both your income and your lifestyle.

Health Insurance (Krankenversicherung)

Health insurance is mandatory for everyone living and working in Germany. Expats can choose between:

  • Statutory Health Insurance (Gesetzliche Krankenversicherung – GKV): Public coverage that operates on an income-based contribution model.
  • Private Health Insurance (Private Krankenversicherung – PKV): Tailored coverage based on personal risk and health status, often offering faster access to specialists and private hospitals.

Many expatriates choose private health insurance for its flexibility and enhanced benefits — but it’s important to seek advice before switching, as re-entry to the public system can be difficult.

Pension Insurance (Rentenversicherung)

If you are employed in Germany, you’ll automatically contribute to the state pension system, with deductions made from your salary. However, expatriates who plan to stay long term — or wish to maintain a globally diversified retirement plan — often look to supplement the state system with private and international pension solutions.

Life and Income Protection Insurance

Protecting your family and financial commitments is a cornerstone of any solid financial plan.

  • Life insurance (Lebensversicherung) ensures your loved ones are financially secure in the event of your death.
  • Income protection insurance safeguards your earnings if illness or injury prevents you from working.
  • Liability insurance (Haftpflichtversicherung) — strongly recommended in Germany — covers accidental damage or injury caused to others.

At Blacktower, we help expatriates review their existing insurance coverage and identify where additional protection or more tax-efficient structuring may be beneficial.

2️⃣ Retirement Planning for Expats in Germany

Retirement planning in Germany can seem complex at first — but with professional advice, it can be structured to your advantage.

Germany offers several pension options, ranging from the state pension to private and international retirement plans.

The German State Pension (Gesetzliche Rentenversicherung)

If you are working and paying into the German social security system, you’ll be contributing to the state pension. To qualify, you must typically pay contributions for at least five years.

However, the state pension may not provide enough income to maintain your lifestyle in retirement — especially for expatriates who have worked internationally and paid into multiple systems.

That’s why supplementary retirement planning is essential.

Private and International Pension Options

1. Private Pension Schemes (Rürup and Riester)

Germany offers two voluntary, government-backed private pension plans:

  • Riester Pension: Designed for employees contributing to the state pension; offers tax incentives and government bonuses.
  • Rürup Pension: Suited for self-employed individuals; contributions are tax-deductible up to set limits.

While these plans are beneficial for German taxpayers, they may not always suit expatriates with cross-border income.

2. International Pension Plans for Expats

For UK or US expatriates living in Germany, international pension structures often provide the most flexibility and control.

These include:

  • QROPS (Qualifying Recognised Overseas Pension Schemes): Ideal for UK nationals wishing to transfer their UK pension overseas while retaining tax efficiency and multi-currency flexibility.
  • SIPPs (Self-Invested Personal Pensions): For UK expats who wish to retain their pension in the UK but with global investment access.
  • US retirement accounts (IRA, 401(k)): US expats may benefit from restructuring these accounts with international tax efficiency in mind.

With the right guidance, it’s possible to combine German, UK, or US pensions into a coherent global retirement strategy — minimising tax exposure and ensuring long-term sustainability.

3️⃣ Investment and Wealth Management in Germany

In addition to pension planning, expatriates should consider how their broader investments are structured.

Many expats continue to hold investments in their home country after moving to Germany. However, this can create currency exposure, double taxation, and reporting complications under both German and foreign laws.

At Blacktower, we help you:

  • Build multi-currency investment portfolios (EUR, GBP, USD).
  • Access tax-efficient investment vehicles compliant with German and EU regulations.
  • Diversify across asset classes to balance growth and protection.

One of the most popular options for expatriates is an EU-regulated life assurance investment wrapper, which offers:

  • Tax-deferred growth until withdrawals.
  • Potential exemption from annual tax on investment gains.
  • Estate planning flexibility through beneficiary nomination.

These structures, available through Blacktower’s international partners, provide a simple, compliant way to manage wealth while living in Germany.

4️⃣ Estate and Succession Planning in Germany

Germany applies inheritance and gift tax (Erbschaft- und Schenkungsteuer) to both residents and assets located in Germany. Tax rates depend on the relationship between donor and recipient and the value of assets transferred.

Additionally, Germany’s forced heirship laws may impact how your estate is distributed — which can be a surprise for expats used to UK or US inheritance laws.

To ensure your wealth passes according to your wishes, we help you:

  • Draft or review wills valid under both German and home-country law.
  • Establish cross-border estate plans coordinated with legal professionals.
  • Explore life assurance-based inheritance solutions, which can provide liquidity and privacy.

Estate planning isn’t just about taxation — it’s about ensuring your loved ones are cared for, wherever they live.

5️⃣ Why Choose Blacktower in Germany?

At Blacktower Financial Management, we’ve built our reputation on helping expatriates achieve financial security across Europe and beyond.

Our strengths:

  • Local expertise: Advisers based in Germany with in-depth understanding of local regulations.
  • Cross-border insight: Specialists in UK, US, and EU financial systems.
  • Independent advice: We work for our clients, not financial product providers.
  • Tailored service: Every financial plan is customised to your goals, lifestyle, and residency status.

From comprehensive insurance reviews to sophisticated international pension and investment strategies, we provide end-to-end wealth management for expatriates living in Germany.

Secure Your Future with Confidence

Living in Germany offers stability, opportunity, and an excellent quality of life. With the right financial planning, you can make the most of your time abroad while ensuring your long-term security and legacy.

Whether you’re building your career, approaching retirement, or already enjoying life in Germany, Blacktower Financial Management is here to help you every step of the way.

📞 Book your complimentary consultation today
Speak to one of our specialist advisers in Germany and discover how our insurance, investment, and retirement solutions can help you secure a prosperous financial future.

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