The #1 Question We Hear Most

The #1 Question We Hear Most

by Thomas Quinn on Jul 29, 2020

We have been speaking with former UK residents and Brits across the USA for a combined 10 years now, in this video we discuss the number 1 question we hear most.

Transcript

00:00Here at Taylor& Taylor, this is the question we get asked most. So it's whether you should, or whether I should transfer my UK pension. So I'll outline a few reasons why you shouldn't. First, and then I'll move on to outline a few reasons why we find people do transfer their UK pensions. So number one, is if you're transferring UK pensions, you're often looking for help with that, that help can come with an additional cost, which may be more expensive than your current schemes. Especially if you've already got a new defined contribution or newer type of UK pension already. So that's a reason why not to. And another reason, if you've got an old final salary defined benefit pension in the UK, in the default position on these schemes is that it's in your best interest to keep them where they are.

00:47 So, going through that process of understanding, if it's right to move often results in the advice to leave those benefits where they are. Now, you can still obviously review and look at moving those. But the default position by the regulator and by pension transfer specialists who help in this area, is to keep the benefits where they are. So those are the few reasons why people tend to leave their pensions in the UK and not transfer them. Some reasons why you might look at moving is currency consideration. So you were in the US, you're going to stay in the US, you can actually create a US dollar UK pension, that is an option available to you. Another option or another reason why people might move is consolidation. So if you've got a number of UK pensions and you don't want to deal with the administration, or you want to consolidate them, you can do that.

01:35 So, you can move them under one umbrella. Cost is one, even though that's a reason why not. Reason being old eighties, nineties money purchase defined benefit, defined contribution schemes can be quite expensive. We also have come across a few Sipp which have been quite expensive as well, with high bid offer spread costs to go in and out of funds four or 5%. That's old school, that's expensive. So that might be a reason why you might move a UK pension is to reduce your costs. Another option would be sort of investment options, greater investment flexibility. If that was a big consideration of yours you could get that in another vehicle. Something called a Sipp in the UK would give you greater investment flexibility and options upon retirement as well.

02:14 If you move something like a Sipp, which is really the main option that people would be looking at, you get full flexibility to access pensions from 55, as opposed to what might be 65, 60 or other ages where you can't access your pension before a certain age. It's 55 always on a UK sip. So there's a few reasons there that covers off quite a bit of a first call for us when we're speaking with people. And hopefully that's some help for you as well. By all means like and subscribe to our videos on YouTube or on LinkedIn. And if you want to reach out, please do get in contact with us. The information should be in a link somewhere around here. Cheers.

If you're not a client and you want to find out how we could help you if you live in the USA having formally lived in the UK, please get in touch on +1 646-201-4865 or info@taylortaylorusa.com 

Taylor & Taylor Financial Services USA LLC is a registered investment adviser.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.  Investments involve risk and, unless otherwise stated, are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.