The pros and cons of transferring your pension
You have a UK based private or workplace pension and are considering your options with how to better manage it from South Africa. We strongly recommend you speak to Holborn Assets about the implications of doing so.
Some UK private workplace pensions can be Defined Benefit (DB) schemes, which are rare these days because they pay out a secure income for life. Thus, it’s not usually advised to transfer a DB pension scheme because of all of the benefits they provide. When you transfer, all benefits of your current scheme are lost, and only the value is carried over which could be a much higher amount than you were previously aware of.
That being said, did you know that your spouse will normally only receive 50 to 60% on death and your children may receive nothing? Would you rather protect your pension pot to provide for your spouse, children and future generations? Would you like the option to flex your payments up or down to suit your needs in retirement?
More commonly, UK workplace or private pension funds are now Defined Contribution schemes, with the value determined by the underlying investment decisions you made and which are subject to the vagaries of the market. Are your funds the best performing funds in the market place, what are your funds invested in and what does your current scheme cost?
Finally, you may be paying unnecessary income tax on your overseas pension income. This may be deducted at source and with a few adjustments you could benefit from a 0% income tax rate in South Africa.
Holborn’s local advisers in South Africa hold all of the relevant qualifications to handle both defined benefit and defined contribution pension pot transfers. We can guide you through the process, starting with a complimentary red, amber or green report to show you the status of your current arrangements.
In the very least, by contacting Holborn Assets today you’ll know a bit more about your pension than you do today along with some options you may wish to consider further.