News & Insights

The importance of proper retirement planning

What’s more, a quarter of savers who accessed money from a defined contribution pension over the last two years were unable to explain how they did so. And of the respondents nearing retirement with a defined contribution pension, over a quarter could not say how much money was in their pot.

Overall, the report shows a general lack of consumer knowledge and confidence when dealing with money, making them ill-equipped to make important financial decisions without assistance.

expats and pension transfers

To be able to know how best to manage your pension pot, you should have a basic understanding of how it works. Talking to a professional financial adviser can help you discover new opportunities for your money.

Take the process of pension transfers for expats, for example. Completing a pension transfer (under the guidance of the right financial adviser who has experience in making pension transfers for expats, of course) to a QROPS, QNUPS, or SIPPs is one of the most beneficial ways for an expat to make more of their retirement savings. But, if this new survey is any indication, it’s likely that many expats are completely unaware of how much this could benefit them.

And other research has shown how important it is for savers to know what they could be doing to allow their retirement fund to grow. Another report, this time from the Swiss bank UBS, has highlighted the importance of having a private pension because, unfortunately, many basic state pensions, in various countries, will not be enough to cover basic cost of living.

UBS’s International Pension Gap Index has highlighted that many governments do not provide a system that adequately supports citizens in their later years. The main takeaway from the report is this: basic state pensions are not enough to see people comfortably through their retirement, and they found this to be true no matter where in the world they researched.

The bank’s study included several different countries, looking at the difference between the retirement income citizens will receive from the state and the amount they’ll realistically need to comfortably fund their retirement.

In all of the countries analysed, there was found to be a significant gap between state pension payments and cost of living. In Britain, for example, the £159.55 per week that the UK Department for Work and Pensions provides to eligible retired citizens is much lower than the amount spent by many Britons per week. The UBS report shows that an “average UK Jane” earning a median wage for a full time job would receive just 41% of her final income if she relied on the state pension alone. Meaning she would need to save around 47% of her income per month to maintain her lifestyle after retirement.

With state pensions unsuccessfully covering the cost of living in retirement, it’s very risky to rely solely on a state pension as your only form of income. It is therefore quite worrying to know that, according to the FCA’s Financial Lives Survey, there are around 15 million people with no pension savings and 40 percent with savings less than £5,000. The UBS report concludes that there are ways for individuals to make things easier on themselves, but also noted that improvements to the current pension systems were necessary: “While it should be clear that individual private savings and an early enough planning will be key to maintain a certain lifestyle in retirement, challenges on a systemic level need to be addressed as well.”

If you currently have a UK pension and are hoping to enjoy a fulfilling retirement that isn’t hampered by any financial concerns, then a Blacktower financial adviser could help you make the most suitable retirement investment plans.

Assisting with pension transfers for expats is just one effective method of wealth management that helps our clients to make their money go further.

Equipped with years of experience, our advisers can help you protect and grow your wealth effectively, helping your maximise your pension pot and seeking to ensure that tax liability is no larger than it needs to be.

Other News

No More Tax Exemptions

No More Tax ExemptionsHands up if you still own a property in the UK, but have residential status in Tenerife, or indeed anywhere else in the world?  

If you’re one of the many thousands of expats, who decided to keep a foothold in the UK property market, ´just in case´, then potentially, you may well be out of pocket when you decide it´s time to sell.   This is yet another one of the latest steps in a series of significant changes affecting the taxation of UK residential property in recent years.   Up until the 6th of April 2015, non-UK residents have always enjoyed being exempt from Capital Gains Tax (CGT) on private residences, and also had the right to claim Private Resident Relief… regrettably for many, this is no longer an option – the rules have now changed!  Capital Gains Tax (CGT) has been extended to non-UK residents with effect from the 6th of April this year.  

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End to 15-year-rule for expats

Great news for the clients of expat financial services: the government has announced proposals to abolish the 15-year time limit on the right of expats to participate in UK general elections.

The policy statement, which was published as part of document entitled “A democracy that works for everyone: British citizens overseas”, details the government’s idea of ensuring rigorous checks on the identities of expats so that they can register to vote without suspicion of fraud.

Furthermore, cost analysis performed by the government predicts that ending the 15-year rule and implementing an expat voting registration scheme will actually cost only a six-figure sum; far less than the millions of pounds some experts have previously claimed it would require.

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