British expatriates saw the minimum age at which you can start taking your private or company pension raise from 50 to 55 in April 2010. This was part of the 2006 Pension legislation changes, which were brought in to make pensions simpler. Those with the smallest and largest pension pots are those who were most affected by changes in legislation but even for those in the middle, especially those around retirement age at the moment, a little forward planning could still be very rewarding.
The pensions gap remains an emotive phrase for those with a UK pension. If your anticipated retirement income falls short of your anticipated retirement outgoings, you have a pension gap. A pension gap indicates that you will not have enough money when you are retired to facilitate the kind of lifestyle you aim to enjoy as a pensioner.
Essentially there are only two main ways to close a pension gap: save significantly more now for your future or retire later and save more gradually.
The right route for you will depend on the size of your pension gap. If you fall short of your desired income by a small amount, perhaps a thousand pounds a year, there may be short-term changes you can make today to increase your savings, or retirement outgoings that you would be willing to forgo instead. If you fall short by several thousand pounds a year, you will need to look more carefully at the ways in which you could make up the shortcoming.
Those facing pensions gap, especially those in government schemes, are already looking at ways to reduce the risk of retiring without sufficient money.
Don't forget to look at your State Pension forecast; currently the full pension is around £87 a week if you have paid your National Insurance contributions in full, or around £52 a week if your pension is based on your husband's fully paid up National Insurance contributions. If you are not forecast to receive the full State Pension, investigate why this is. You might be able to fill gaps that appeared in your National Insurance record when you were studying, travelling or looking after young children, by making back payments now. In this way you can increase the State Pension you will be entitled to when you retire.
Equally anyone with a significant UK pension that is dormant, should really consider moving it to QROPS and maybe even QNUPS.
The Holborn Pensions Team includes a number of highly qualified members of the UK's Personal Finance Society who are eminently qualified to discuss and advise on all matters of Pension including frozen schemes and potential transfers. Contact a qualified Holborn Assets adviser for the best advice.
In this Section
- QROPS - A QROPS is a Qualifying Recognised Overseas Pension Scheme that is recognised by and has met the criteria as set by Her Majesty's Revenue & Customs (HMRC). Any QROPS can, therefore, in principle accept a transfer from a UK registered pension scheme.
- QNUPS - The Qualifying Non-UK Pension Scheme (QNUPS) came into existence as a means to rectify a mistake made in the 2004 Finance Act, this mistake meant that money placed in QROPS would be subjected to UK inheritance tax in the event of the holders death. Now, with a QNUPS, any money transferred into the scheme will be free from all UK inheritance tax.
- SIPP - A Self Invested Personal Pension (SIPP) is a personal pension but with added flexibility. Unlike most traditional personal pensions, a SIPP offers you lots of different investment options. It puts you in control of your money and your life.
- Historical UK Pensions - The first ever state pension was introduced in 1908, under the Old Age Pensions Act. It was payable to those aged 70 and over, and was subject to a means test and a 'moral character' test. 1925 then saw the introduction of the contribution principle started and from 1928 pensions were payable from age 65 for men.
- Your UK Pension Analyzed - A pension analysis is an essential service for anyone who wants to make the most of their pension. It is also a fundamental part of any financial health check that Holborn provides for its clients.
- UK Government Pension - The government offers UK citizens a basic State Pension. As a UK citizen you are entitled to receive this benefit once you are over State Pension Age providing you have made sufficient National Insurance contributions.
- National Insurance Contribution - Contributions of National Insurance (NI) are compulsory charges applied to earnings from employment or profits from self-employment above certain minimum amounts. NI contributions fund in part the National Health Service and provide protection against sickness and unemployment. National Insurance Contributions (NIC's) also entitle the member to receive a basic state pension at retirement if enough regular payments are made.
- Forgotten or Lost Pensions - Were you one of the millions of people who 'contracted out of SERPS', the state second pension or state earnings related pension scheme and have since lost track of who is holding those valuable national insurance contributions which you may not be able to claim when you retire?