From 1st December 2016 the ability to access 30% of the funds at 55 will be significantly reduced. Currently when someone transfers their UK pension to New Zealand, the amount that they can withdraw is determined by Her Majesty’s Revenue and Customs (HMRC). This means that the earliest you can withdraw transferred UK pension funds is age 55 and the amount that you can withdraw is essentially 30%.
However, on 1 December 2016 new legislation being introduced under the Financial Markets Conduct Act (FMCA) will come into effect that will restrict the amount of funds that can be withdrawn from a New Zealand superannuation scheme for members age 55 years old to only 10% of the fund balance.
After 1 December 2016 you will not be able to join a new scheme and still have the ability to withdraw 30% (or more) at age 55.
Some additional points to consider:
- When you transfer a UK pension the funds will usually be GBPs, and some schemes will change the funds in NZ$ on arrival, but the scheme that we use allows you to keep your funds in GBPs as long as you wish and you can even invest in GBP denominated investments. All investment advice is provided by Hamilton Hindin Greene.
- Henderson International can help take the hassle away for you by explaining the process and what needs to be done step by step, sorting out all the necessary paperwork and co-ordinating all parties involved so nothing gets missed.
- The scheme that we use enables Hamilton Hindin Greene to put an investment portfolio based upon your requirements and goals. The choice of investments includes stock markets in NZ, Australia, UK and US as well as a huge range of Unit Trusts, Funds and Exchange Traded Funds. This is quite similar to the Self Invested Personal Pensions (SIPPs) that are available in the UK, but with the added benefit of expert investment advice.
- UK State pensions can’t be transferred, neither can unfunded government schemes such as the Teachers Pension scheme and the NHS scheme. However, if the scheme is funded such as the University SuperannuationScheme and some Local Authority schemes then it is possible to transfer their pensions.
- You will only be taxed if you transfer after 4 years of becoming a NZ tax resident, which has more information. If you transfer to a QROPS there are usually no UK tax implications. Henderson International works with experts in UK and NZ tax who can provide detailed personal assessments if required.
Transferring UK Pensions is a complicated subject contact Jeremy Henderson for a free no obligation discussion on your UK pension transfer options. There is no harm is seeing what the options are and even if you decide not to transfer your UK pensions you will have done so from a position of knowledge.
Jeremy Henderson - Henderson International
+64 21 498 058