“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.
The Malta Association of Retirement Scheme Practioners (MARSP) have been attempting to persuade the Malta Financial Services Authority (MFSA) that Switzerland has the relevant regulatory authorisation, supervision and enforcement in line with the EU in order for Swiss Based Advisors to continue to be able to service their EU clients post changes to Malta Pension Legislation – which has seen many clients having to seek an alternative, appropriately licenced, EU based Financial Adviser.
One of the most common questions asked of expat financial services firms is what should clients do with their pensions. Some wish to keep all their money in a UK-based pension, some will look to transfer to a Qualifying Recognised Overseas Pension Scheme (QROPS) and others will want to take a tax-free lump sum from their fund. In short, what an individual chooses to do will depend heavily on their personal circumstances together with any advice they receive from their expat financial services professional.