“As this represents a significant step, government would need to carefully consider whether the potential benefits and risks of changing the requirement for one group of safeguarded members is in their interests, including whether any alternative can in fact offer the same consumer protections,” stated the Department for Work & Pensions consultation paper.
One problem facing the DWP is that pensions transfers for expats have only been available since April 2015, so there is only limited historical data detailing the overseas pensions transfer process.
It is also worth remembering that the advice requirement exists to offer pension savers safeguards so that they do not suffer financial loss when transferring from a defined contribution scheme.
This safeguard is particularly important in relation to pensions transfers for expats as they may be at more risk of rogue operators conducting their business outside of the UK.
Professional and regulated advice on pension transfer helps those undertaking overseas transfers to ensure they do not fall victim to unscrupulous advisors.
The DWP reports that there are around 700,000 UK expats with private sector, salary-related pension schemes that are not yet in payment, so the issue has the potential to affect a large number of people.
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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The Pensions and Lifetime Savings Association (PLSA) has published a guide to UK Retirement Living Standards* as part of a mission to assist people in working towards a prosperous future retirement.