Sometimes, when you’re facing a financial decision, it can feel as though the easiest thing is to do nothing.
Maybe life gets in the way and you don’t have the time to put into deciding on a course of action, or you’re concerned about making the wrong choice.
But there can be risks in not taking action on your UK pension.
Here are a few things to think about.
Currency risk: Anyone who has investments or financial dealings with another country will know how much difference the exchange rate can make. If you have money overseas, exchange rates can significantly affect its value. When the New Zealand dollar rises, your overseas funds become worth less in NZD. When it falls, they're worth more.
Currency movements can be hard to predict, and this can be an issue if you’re relying on income from your overseas pension. Moving your pension to New Zealand can give you more certainty about the value of your investments because once you’ve made the shift the fluctuations will no longer be a problem, and also gives you the opportunity to choose the time that you think will be most appropriate for your transfer.
Some funds that you might transfer your pension into allow you to keep your investment, or some of it, in GBP until it’s the right time for you to transfer it to NZD.
Access risk: For many people, moving a pension is quite a pragmatic decision. It can feel a lot easier to manage money that is in the same country that you are. You don’t have to worry about finding people in the UK if you have questions about administering your pension, and you don’t have to worry about navigating international withdrawal complexities.
Tax risk: Tax obligations can be an important part of your retirement planning. At the moment, we know that people who move to New Zealand have four years from becoming tax residents to move their pensions without local tax considerations. There is no inheritance tax or wealth tax in New Zealand to apply to your pension. But tax rules can change and the way that different countries’ tax systems interact can change, too. Moving your pension may allow you to take advantage of the opportunity that is present now.
Don’t make a decision by default
Not doing anything is still a decision – maybe just one you haven’t consciously made.
As advisers we’re here to help you ensure that you’re making conscious, strategic decisions about your pension, and making your money work for you in the most appropriate way possible.
Moving a pension may not be right for everyone, but it’s important you assess it in an informed way.
Get in touch with the Pension Transfers team
Our team of expert advisers is skilled in all aspects of pension transfers and can answer any questions you might have, whether you’re at the start of the process or have already given it significant thought.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.