Dealing with UK Advisory Firms

NZ pensions can organise the transfer of your UK Pension without involving any UK Advisory firms in the process, saving you from another layer of costs.  We handle it all from New Zealand, and your funds remain directly under your ownership and control all the way. 

Some UK advisory firms may insist on an expensive report before they will commence the transfer process of your UK Pension, and they may also suggest that you should combine your existing UK schemes into one UK scheme before transferring, in order to make the transfer easier.  This is actually not necessary and will only add to the cost and time it takes to complete your UK Pension transfer.

Our advice is that an expensive report is not a requirement of a successful transfer – neither is there any need to transfer to another UK scheme as part of the transfer process. If you are persuaded to transfer your pension to another UK scheme before transferring to New Zealand you will most likely be faced with numerous additional charges. Commission may be paid to the UK advisory firm for the transfer within the UK, and a further commission may be paid when the transfer to NZ is completed, all of which will reduce your pension savings.

NZ Pensions does not insist on an expensive report, and we only make one transfer directly from your UK pension plan to an HMRC approved qualifying scheme in New Zealand.  We have been transferring UK Pensions for many years and our simple efficient transfer process will save you thousands!

NZ Advisory Firms

There are a number of things you need to know about the UK Pension transfer market in New Zealand, and you need to be aware of the advertising claims made by some "pension transfer specialists”.  Despite what you may be told, these are the facts:

• You do not need to make contributions to a local scheme before you commence the transfer process. You will only contribute to your new pension scheme in NZ if that is your wish, and we can review your retirement savings with you at a later date as well as also helping you with KiwiSaver.

• Beware of the fees charged for organising your UK Pension transfer – some ‘transfer specialists’ will charge a handling fee of 5% of your transferred funds and they will also take a further 1% per year for ongoing Adviser trail fees!

• Some Transfer Companies will lock your transferred funds in to their fund to age 60 or even age 65.  Under UK HMRC rules the minimum age at which you can access retirement benefits from QROPS Pension schemes is 55.  Locking you in to age 60 or 65 can sometimes be a tactic used to keep your funds invested so that more fees can be charged. 

• Under NZ legislation the Financial Advisers Act 2008, the Financial Advisers (Disclosure Regulations) 2010, and the Financial Advisers (Disclosure) Ammendment Regulations 2011 require Financial Advisers to fully disclose all fees and charges before you engage their services or invest funds with them – make sure you are fully aware of all charges you will incur during your UK Pension transfer.

NZ Pensions fully discloses all charges for transferring your pension, and will confirm these charges in writing before your transfer proceeds. With NZ Pensions there is only one transfer charge which is deducted at source from the transferred funds. 

Pension transfers – UK tax implications

New UK pension transfer regulations came into effect on April 6, 2006, allowing the tax-free transfer of funds from UK registered pension schemes to overseas qualifying schemes (known as QROPS).  These regulations were modified from April 6 2012 to increase the QROPS reporting period to 10 years from the date of any transfer and to restrict any lump sum withdrawal to 30% once retirement age is reached.

Any withdrawals made from a New Zealand QROPS scheme within a 10 year period in which a person becomes UK non-resident for UK tax purposes have to be notified by the NZ QROPS scheme to the UK HMRC, and then may potentially attract a UK tax liability of up to 55% if they are deemed to be unauthorized withdrawals.

Furthermore, Foreign investment fund rules (which pensions sometimes fall under) may mean that you end up having to tax pay tax on the growth in your UK pension fund, even though you are not in the UK.  Tax is a complex area and we suggest that you seek specialist tax advice as to your individual circumstances.

NZ Pensions uses NZ receiving schemes which are fully registered by Her Majesty’s Revenue & Customs to receive transfers from UK schemes. This means that transfers through NZ Pensions attract no penalty or exit taxes when your funds are transferred from the United Kingdom scheme.