How to Make Overseas Pension Transfers

If you are in one country and your pension fund is in another, it’s time to consider making an overseas pension transfer. Today, we invite Dan Abrahams, Co-Founder of MyCurrencyTransferto help out with some expert advice

British expats can take advantage of a Qualifying Recognised Overseas  Pension Scheme or QROPS for short. You have worked hard for your money over the years and it is important to ensure you get access to your money in the best possible way. 

QROPS are often referred to as offshore pension schemes because the companies supplying them are based outside of the UK. There are over 3000 different schemes running in over 46 countries and that’s great news for those shopping around for the best scheme to suit their needs.

The First Step - Finding A Good Financial Advisor

A professional financial advisor experienced in both UK and overseas pension schemes will ensure that you have access to the most suitable and profitable pension transfer deals available to you. Your advisor can give you tailored advice that takes into account the tax rules for the country you are in and any other aspects of pension transfer that you need to be aware about. Conditions and benefits often vary between countries.

Thinking Of Taking A Lump Sum?

The majority of UK pensions offer a lump sum but limit this to 25% of the pension fund value. However, many QROPS can stretch that to 30% as long as the pension scheme retains 70% of the original pension pot to provide a regular retirement income.

Lump sum flexibility like this can help if you are looking to buy a car in your new country or pay for another big purchase.  Again, your financial advisor will be able to ensure you know the options available to you so that you can make a sensible and informed choice.

Income Tax On Your Pension Payments

For any QROPS taken out in the same country where you are based, you will be taxed according to the local tax rules for that country. And if you take out a QROPS in a different country to where you are based, the tax you pay will depend on whether your country and the QROPS country has a tax treaty between them. If they do you might be able to take advantage of some tax breaks. Another option is to choose a pension company offering QROPS that can be moved to another country without having to pay hefty entry and exit fees. 

How To Beat Fluctuations In The Exchange Rate

Your UK pension can only be transferred in Sterling no matter what country you are moving your pension to. That means you need to time your transfer well so that you can make the most of fluctuating exchange rates. Exchange rates trade every day and can change quite dramatically during the course of a day’s trading. The good news is that you can monitor these changes by using an exchange rate comparison website.  A good financial advisor can also give you advice on how to get the best exchange rate by using an FX broker that offers bespoke money transfer services.

Life Insurance Guide 2012 Why Life Insurance at our age???

Life Insurance Tips 

When my mother was in her early eighties we talked with her financial planner about purchasing a life insurance policy. Believe it or not, even a widow at her age (82) needed some life insurance protection. Not because there was anyone left that would be dependent upon her for support after her death but because this was a very good way to protect her money from all those people that wanted to get their hands on it after she was gone. By protecting her money she also guarantee that any outstanding debts she had was paid off (think home mortgage or any credit card debt). So yesterday when I was contacted by an insurance company representative with information on insurance policies I sat up and paid attention. As a quick review, here are some choices available to you:

Life Insurance Guide 2012   

Life insurance is a critical component of any financial plan and ensuring that you have the right kind of coverage is important. Without having the right kind of life insurance, you cannot be sure that your family will be taken care of if you pass away unexpectedly. When engaging in financial planning, keep these life insurance tips in mind.

Decide if You Want Cash Value  

When you're in the market for a new life insurance policy, you have to determine whether you want your policy to have a cash value. Term life insurance only provides a death benefit for a specific number of years. By comparison, whole life insurance gives you a death benefit and a growing cash value.

Some people do not want a cash value and would rather save money on premiums. Instead of paying extra money to get a cash value, you could just as easily invest that money on your own and earn more money over time. However, if you are not disciplined enough to make yourself set aside money every month, using a whole life insurance policy can be a decent investment.

Get Enough Coverage  

When it comes to choosing a life insurance policy, you also have to make sure that you have enough coverage. Many people who buy life insurance policies are under-insured and do not have enough coverage to adequately protect their families. You need to at least have enough money to pay off all of your outstanding debts and provide your family with a little cash. For example, if you have a mortgage, student loans, credit cards and an auto loan, add up all of the debts that you have. Then add an amount on top of the debt so that your family will have enough money to pay your final expenses and have some left over. The face value of the policy is ultimately the amount that your beneficiary will receive when you pass away.

Company Quality

When choosing a life insurance policy, you should also look at the quality of the company that is offering it to you. Try to find a company that is reputable in the industry and has a good history of paying claims. If an insurance company goes out of business, it will not be able to honor your life insurance policy. Make sure that you choose one of the best insurance companies in the industry to work with.

Decide if You Want Cash Value   

When you're in the market for a new life insurance policy, you have to determine whether you want your policy to have a cash value. Term life insurance only provides a death benefit for a specific number of years. By comparison, whole life insurance gives you a death benefit and a growing cash value.  

Some people do not want a cash value and would rather save money on premiums. Instead of paying extra money to get a cash value, you could just as easily invest that money on your own and earn more money over time. However, if you are not disciplined enough to make yourself set aside money every month, using a whole life insurance policy can be a decent investment.  

Get Enough Coverage

When it comes to choosing a life insurance policy, you also have to make sure that you have enough coverage. Many people who buy life insurance policies are under-insured and do not have enough coverage to adequately protect their families. You need to at least have enough money to pay off all of your outstanding debts and provide your family with a little cash. For example, if you have a mortgage, student loans, credit cards and an auto loan, add up all of the debts that you have. Then add an amount on top of the debt so that your family will have enough money to pay your final expenses and have some left over. The face value of the policy is ultimately the amount that your beneficiary will receive when you pass away. 

Company Quality 

When choosing a life insurance policy, you should also look at the quality of the company that is offering it to you. Try to find a company that is reputable in the industry and has a good history of paying claims. If an insurance company goes out of business, it will not be able to honor your life insurance policy. Make sure that you choose one of the best insurance companies in the industry to work with.

The information was a reminder that taking care of business when it comes to our financial planning and life insurance is more important than ever.  Just remember, even though you are financially able to live the life style you are living now, your children could lose a great deal if your insurance does not cover the mortgage payment at your death.  We are all well aware that getting property sold can be a problem.  As for the credit card company I don't even want to go there.

FYI

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