The countdown is on: Civil servants hit with ban on pension transfers
The government’s impending ban on unfunded civil service pensions being transferred out of the UK is nothing short of a hammer blow to individuals who have served and continue to serve their country.
As from April this year, public sector workers with unfunded pension schemes will no longer be able to move them outside the UK, therefore drastically reducing important retirement options available to them.
Those who currently work or have worked for the NHS, Armed Forces, Police, Fire Service or in state education, and who have accumulated retirement funds in their roles have less than two months, to look into the advantages of transferring their pensions out of the UK should they wish to do so.
It can be reasonably assumed that the core reason for the government’s decision, announced in George Osborne’s Budget last year, is because as these pension schemes are unfunded, there are serious concerns the Treasury will be burdened with crippling debt.
Whilst I can understand why this course of action is being taken, it does mean that civil servants with the aforementioned schemes and who qualify to move their retirement funds out of the country, will miss out on the potential associated benefits of transferring their pension pots.
Since the 2014 Budget, deVere Group has reported a significant rise in the number of enquiries by public sector workers with regards to HMRC-recognised Qualifying Recognised Overseas Pension Schemes (QROPS), which typically enhance tax efficiency, provide greater control and flexibility on investments, and offer a choice of currency in which funds are paid out in.
As financial advisers, it is our responsibility to urge those with unfunded civil service pensions to consider all the currently available retirement options before it’s too late – which includes for those who qualify to do so transferring their pension into a QROPS to safeguard and maximise their retirement funds in a secure, lower tax jurisdiction.
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