(PR.co.nz) Six months after changes in the way the New Zealand Inland Revenue treats UK pensions, people appear to be unsure about the new rules, leading to a decrease in pension transfers industry-wide.
Britannia Financial Services adviser Alun Rees-Williams fears many people may be confused, after heavy media reporting in the lead up to the change has left them thinking it’s all too late.
“The perception out there is that you cannot transfer your pension to New Zealand at all, or that the process will be too time consuming or costly,” he says.
“This is not the case. The two major changes that people need to be aware of is that unfunded UK government pensions such as NHS, Teachers and Armed Forces can no longer be transferred – and that superannuation companies in New Zealand must be a Qualified Recognised Overseas Pension Scheme or QROPS,” Rees-Williams explains. “However, all private and funded government pension schemes can still be transferred.”
You may ask, why bother? Surely leaving your pension where it is and allowing the interest to grow in British pounds until you are ready to retire would be the more sensible option.
Rees-Williams says that’s not necessarily the case. “With the right New Zealand QROPS specialist, your fund can be easier to monitor, more flexible, not subject to further UK law changes and could earn more. By not transferring people could be losing an opportunity to boost their retirement savings by thousands of dollars.”
With around 14,200 permanent long-term migrants arriving from the United Kingdom in one year* (38 percent of those being New Zealand citizens), it appears that many people are missing out – giving up without trying or enquiring.
Rees-Williams insists it is not too late. He encourages any British migrants now resident in New Zealand, as well as any Kiwis who have paid into a pension fund while working in the UK, to check their options with a QROPS adviser.
“In most cases, a call to an independent adviser will confirm whether your pension is transferable,” Rees-Williams says. “It is can be an easier, faster and more rewarding process than people realise.”
* Demographic Trends: 2012, Statistics New Zealand: http://www.stats.govt.nz/browse_for_stats/population/estimates_and_projections/demographic-trends-2012/international%20travel%20and%20migration.aspx
Media Release on 7 December 2015 by Britannia Financial Services
Alun Rees-Williams, Britannia Financial Services
Phone: 09 414 4215