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Expats a Factor in Huge Pension Withdrawals

The high level of withdrawals highlights just how bold and innovative savers can be once they are granted the freedom and flexibility to do as they wish with their pensions rather than being saddled with the passive and sometimes disempowering pension rules of a few years ago.

Many are not simply withdrawing their money and spending it or indeed investing it in the stock market. Instead, they are choosing other methods of taking their pension, including expat pension transfers such as QROPS and SIPPs.

The figures are also further proof of the moribund state of final salary schemes; many savers are taking the option of receiving a lump sum payment in exchange for the cancellation of their final salary scheme. This is an arrangement that seems to be suiting both savers and the administrators of final salary schemes.

However, there are some concerns that the level of pension withdrawals could be a sign that some savers are making irresponsible or ill-informed decisions that could place their future financial security in jeopardy. As such, every saver should consider that the freedoms afforded by the pension reforms place an additional emphasis on the need for trusted professional advice when making decisions about how to transfer or invest pensions. Any desire to scrimp in this regard is likely to prove a false economy.

Good advice can help savers make solid plans and contingencies that align with their strategies, goals and projected timescales. This is hard enough for most investment professionals to achieve, let alone the lay investor.

Interestingly, the FCA figures reveal that close to 40% of the withdrawals were made by savers between the ages of 55 and 65, with the majority taken as a lump sum; it is clear that today’s savers are seeking to do things are on their own terms, but do so successfully good advice is critical.

Speak to Blacktower today for expat pension planning advice and information on the full gamut of wealth management and investing opportunities available to you as an expat.

This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.

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Auto-Enrolment increases number of savers, but are they saving enough?

Piggy bankStatistics from the Office for National Statistics (ONS) have shown that a record number of savers are now members of workplace pension schemes.

The figures show that the proportion of employees who are contributing to a company pension has risen significantly in the five years since Auto-Enrolment (AE) began.

AE was introduced in 2012 and makes it compulsory for employers to automatically enrol all eligible employees into a pension scheme unless the employee actively opts out. An employee is eligible for AE if they are aged between 22 and the state pension age and have a salary of more than £10,000.

In 2012, prior to AE, 47 per cent of UK employees were enrolled on a company pension scheme. This figure has now risen to 73 per cent in 2017. In other words, there are over 9.5 million more people saving for their retirement than there were five years ago, and it’s mainly thanks to AE.

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Property prices in Spain for 2017

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Of course, reliable financial advice is one of the most effective ways to make sure your money is in order so that you can property search in confidence and it always helps to have your finances in place beforehand, especially if you’re considering one of the popular or pricier locations on the Spanish coast.

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