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After the transfer – what now? Making the most of your pension in NZ

A decision to transfer your UK pension to New Zealand is an important one – but it may well be only the first step in getting your retirement funds sorted. Once you’ve moved your money, there can be a range of other questions and considerations to tackle. Here are a few to think about.
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Your investment choices

Your UK pension will have been transferred into a QROPS in New Zealand, but from there you will need to make some decisions about the appropriate investments for the money.

QROPS are managed funds or investment platforms, where your money is put into specific individual investments.

To work out what the right approach is for you, you may need to consider a few things:

  • Your investment timeline: How long do you have until you retire? The longer you have, the more risk it may be appropriate for you to take. If you have opted to have your pension in funds in New Zealand, a conservative fund may be a suitable option if you’re likely to need the money in the next few years, while a growth or even aggressive fund may be more appropriate if you have longer a timeframe before needing to use the funds.
  • The amount of engagement you want to have: An investment platform may require more input from you than a managed fund investment – we can help you to determine what might be a good fit.
  • Tax considerations: In New Zealand, contributions to retirement savings come from after-tax income and the returns on the investment are taxed, but withdrawals you make are not. It will be important to make sure that your prescribed investor rate (PIR) is correct so that tax is paid on your investment correctly. You may be subject to the FIF regime for any foreign investments you still hold directly, or which your New Zealand funds invest in. 

Regular reviews

We can help you get your settings right now, but it will be important to make sure that your investments keep up with any changes to your circumstances as the years go by.

Regular reviews will help to make sure that your investment settings remain appropriate for your situation and any goals that you may have.

Checking in at least annually can help to give you peace of mind that your investments are performing as you could expect them to. This can also allow you to make any necessary adjustments.

Prevent potential pitfalls

There are a few things that can trip up many investors. 

Mismatched fund selection: If you are invested in managed funds that are not aligned with your risk profile, it can create problems. Being invested in something that is too risky, for example, can mean that you encounter volatility that you are not prepared for, or do not have time to ride out. But being in a fund that is too conservative can mean you miss out on higher returns over time.

Setting and forgetting: Your needs will change over time and not regularly reviewing your investments could mean you miss opportunities to ensure your strategy remains appropriate for you.

Not seeking advice: Financial advisers can help with investing decisions, and help you stay the course if you encounter challenges.

Want to talk?

If you’re ready for the next step in your pension transfer journey, get in touch with us. Our expert team can answer any questions you might have about moving your pension to New Zealand or managing your money once you get it here.

 

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.

 

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