A Little More Good News On Uk Pensions

[AFKAFSinLOS]

If like me, your an expat living in Thailand, pensions stuck around the world can be a bit annoying sometimes, particularly when you'd just like a little more flexibility, find better investments or just want more choice. So the news below is welcome:

Most people wouldn't argue that Thailand could learn a few things from the UK about pensions. But personally I think there's also some learning that could be done in the UK, if they took a look at some aspects of Thai investment and pensions...One example being that in Thailand you can often access your money much easier... eg

- take a retirement fund before 55 but pay back the tax benefit you had...like Thailand

- get rid of capital gains on most individual's investments...like Thailand

- avoid stupid situations like below, where "protected rights" actually led to situations where you were protected from doing what would actually be more favourable...Can't say Thailand is always great for avoiding stupid situations tho'...

http://www.h-l.co.uk/news_and_expert_views...6.hl?rq=article

SIPP your protected rights.By Danny Cox | 10 Jul, 2008

Good news. It was confirmed recently that the rules will change so that Protected Rights pension money can be transferred into a SIPP from 1st October.

Protected Rights stem from contracting out of the State Second Pension (S2P) or its' predecessor SERPS (the State Earnings Related Pension Scheme) and are funded through national insurance contributions.

When you are employed and pay national insurance contributions, these are used to fund many welfare state benefits, including the Basic State Pension. Depending upon how much you earn you would also be funding the additional earnings related pension, S2P.

Contracting out of the earnings related pension meant that part of your national insurance contributions was diverted to a personal pension or stakeholder pension plan. These contributions were invested on your behalf and provided you with a pension at retirement. The idea here was that rather than the Government providing the second tier of pension, you took the investment risk and provided that pension yourself. It is important to stress that the Basic State pension is unaffected by being either contracted in or out.

Since the changes to pensions in April 2006 (I daren't call them simplification anymore) Protected Rights were left outside of the rules that allowed you to invest them as you could any other pension money, in a SIPP.

Now this is changing and from October investors will be able to move these funds into a SIPP. I for one will be transferring my Protected Rights fund into my Vantage SIPP at the earliest opportunity. There is a better investment choice although you must remember that investments can fall in value as well as rise. Also, one set of paperwork less to drop through the letter box is certainly good news for me.

Edited July 10, 2008 by AFKAFSinLOS

[AFKAFSinLOS]

Another longer article from the same source at Hargreaves Lansdown: One of the few investment, pensions, advisory, dealing services that I really like in the UK...

................

http://www.h-l.co.uk/news_and_expert_views...6.hl?rq=article

Opportunity knocks for six million pension investors..wanting to improve the growth of £100 billion worth of pensions. It will follow the scrapping in October of rules that stop "Protected Rights" from being invested in SIPPS..

......................

In case you were unlucky enough to have any of your protected rights or pensions with Equitable Life, the following quote is also good news:

"Thursday's newspaper round-up: BP, TNS, Equitable Life

Equitable Life is to call on the Government to pay damages as quickly as possible to policyholders who lost out following the near collapse of the UK's oldest mutual insurer, says the Telegraph."

.....................

I'd love all these pension companies to just let me have MY money back for use as I see fit in Thailand or elsewhere before the next scandal comes along...

Edited July 10, 2008 by AFKAFSinLOS

[pkrv]

Another longer article from the same source at Hargreaves Lansdown: One of the few investment, pensions, advisory, dealing services that I really like in the UK...

................

http://www.h-l.co.uk/news_and_expert_views...6.hl?rq=article

Opportunity knocks for six million pension investors..wanting to improve the growth of £100 billion worth of pensions. It will follow the scrapping in October of rules that stop "Protected Rights" from being invested in SIPPS..

......................

In case you were unlucky enough to have any of your protected rights or pensions with Equitable Life, the following quote is also good news:

"Thursday's newspaper round-up: BP, TNS, Equitable Life

Equitable Life is to call on the Government to pay damages as quickly as possible to policyholders who lost out following the near collapse of the UK's oldest mutual insurer, says the Telegraph."

.....................

I'd love all these pension companies to just let me have MY money back for use as I see fit in Thailand or elsewhere before the next scandal comes along...

Great posts AFKAFSinLOS. Yes this is true HP also are now forced to allow you to 'protect' your protected rights (IMO the term was a trade discriptions act violation if ever I heard one).

[AFKAFSinLOS]

.... Yes this is true HP also are now forced to allow you to 'protect' your protected rights (IMO the term was a trade discriptions act violation if ever I heard one).

Totally agree on the description.

When I was working in the UK, I used to think pensions where a good thing, and had a variety of different ones: defined benefit company schemes, personal pensions, AVCs, FSAVCs. UK pensions, probably still are OK for people living in the UK all their life. It's just I found as an expat, I can get more flexibility, and hence better investments elsewhere which are tax free.

With the exception of:....

1) A previously very good 1/45ths defined benefit scheme, which now grows at the lower of 2.5% or inflation, although it has some spouses pension

2) Small pension tied up by the Equitable Life scandal

3) This protected rights cr*p which is small and inflexible and just hassle. {It would have perhaps made sense for someone investing for 30 years, until 1) they stopped it and changed the rules 2) was so restrictive if you wanted to move it to somewhere better}

I moved all my defined contribution schemes, eg FSAVCs, AVCs, old fashioned Personal Pensions, etc under a single SIPP umbrella with Hargreaves Lansdown (HL). They give me the choice to invest where I want, and take control. They actually discount most initial charges to zero compared to if I went direct. Most independent IFAs don't like HL, which reinforces how good they are, as they are actually someone who gets you in at very/low cost, and a middle man who saves rather than takes your money. Your accountant, solicitor, actuary etc also won't recommend them, as they can't compete with them...

So for me 2) and 3) I will soon move to my Hargreaves Lansdown SIPP, which offers a choice of hundreds of funds/shares etc with very little/no initial charges, and just the normal fund annual charges on funds. They'll cut down all my hassle. And best of all for an expat, you can do it all online and they don't charge you anything...

Edited July 11, 2008 by AFKAFSinLOS

[AFKAFSinLOS]

The only bits I still can't fix so far are:

a) inflexibility of having to wait until 55 after the UK Government added 5 years. As we said elsewhere, better if you could draw earlier and for longer even if less

b ) being taxed on receipt of income. Apart from a bit of cash. UK pensions are virtually the last taxable investments I own.

Hence I'm waiting to find the Hargreaves Lansdown of offshore QROPs. {Definitely not the Generalis, Skandia, Scottish Provident of this world from "independent IFA" cowboys... }

BTW For anyone with old pensions schemes which are kept, your advisor probably hasn't told you that the Govt change in rules from 50 - 55 could well have reduced what you could have obtained by 30% plus over just 5 years.

I ran the calcs on my defined benefit scheme a few years back and decided even tho' it could only grow at max of 2.5% or inflation until retirement, I was better off holding compared to the transfer value, as it was based on final salary (increasing albeit slowly from a decade or so ago), and offered some spouse benefits. When the UK Govt changed retirement ages, all of a sudden that was an extra 5years at 2.5% taxable compared to say 8% tax free pa I know I could probably get tax free if it wasn't in a pension.(Actually historically I've earned more than 8% when I DIY but that's just a prudent estimate). 2.5% compounded for 5 years is around 13% taxable. Compared to 8% compounded is 47% which I could invest tax free elsewhere....So around 34% wiped off what could have been. Had I known the Govt would move the goalposts say 5 years ago, well then we're taking even more!!

Bottom line:

- UK pensions are probably OK for people in UK, and suit the UK system and way of life.

- Monitor your UK pensions carefully, and keep up to date with the rules. eg a single change can wipe off 34% overnight

- For expats there are better, more flexible tax free investments you can access when you want, which suit your way of life better

- Think carefully why you would choose to tie up your money in the UK and one day if you're lucky enough to live the right amount of time, pay tax

- Why invest in something that will disappear when you die. Why not pass it on to your kids, charity whatever/ whoever you choose...

Edited July 11, 2008 by AFKAFSinLOS

[GuestHouse]

While I agree with much of what is said here, and I certainly agree that the removal of restrictions on Protected Rights and Pensions in general are a good thing. We need to be careful when discussing Expatriate Occupational Pensions.

I, and a number of other members here on TV, remain as contributing members to UK based final salary pension schemes. As contributing members we maintain the whole range of benefits that these schemes offer.

So while I agree that any expatriate holding rights in a Deferred Occupational Pension would be well advised to examine alternative vehicles for the fund they have established (I myself have examined these possibilities). I also think that any expatriates who remain contributing members to Occupational Pensions Schemes should think very carefully before moving out of such a pension plan.

Additionally, while the possible benefits of moving out of an Occupational Pension Scheme (particularly one that is deferred) are well advertised - The risks are not. And there is little discussion on the loss of protections that an expatriate looses when moving out of a UK based Occupational Pension Scheme. Not least of which is loss of protections under the UK Occupational Pension Protections Scheme.

Just as anyone holding deferred rights in a UK based Occupational Pension Scheme would be well advised to examine alternatives, they would be doubly well advised to seek advice on what rights and protections they would be loosing if they choose to move their savings out of the pension.

This advice is not just available from financial advisors/accountants - but importantly is available from the Trustees of the subject pension scheme.

--

An experiment springs to mind... more later.

Edited July 11, 2008 by GuestHouse

[Lost in LOS]

I think this should be on the forum since it directly affects English retires in Thailand and I don't read through it since it doesn't affect me, no harm no foul. what i am wondering is why, when I posted a few days ago, about the US policy where they are considering changing the taxing on social security for Americans retired, was the post taken off. i clearly said it was US so if no one else wanted to read it they could just skip right on by but it directly affect us Americans retired here. same with soccer, I am no interested in the slightest but I do believe it should be on the forum since so many living here are interested in it

just my two cents and since i am american you can take this opinion off also if you like. not complaining of course, just curious

[AFKAFSinLOS]

Guest House,

While a fair bit of what you say makes sense, the first part you always overlook is that circrumstances change and life changes. For someone living in the UK all their life and working in the same company all their life a UK pension might make sense. These people existed in our grandparents day, but rarely do today. Look how many expats people now live in Thailand compared to 50 years ago...

By nature expats have changed their life-styles and moved away already. Accumulating "old schemes" is therefore a risk. No scheme is ever an old scheme when you join it. But it is very easy for it to become so for an expat in the modern world.

Hence when you recommend continuing to contribute, that may be all well and good for now. But for anyone who may change job, country, employer, be subject of a merger/acquisition, in a country like UK where laws regularly change etc etc you need to think ahead. Very few people will not be subject to one of these, and in a changing world while be proportionally less in the future.

Today's current scheme you recommend contributing to, may become tomorrow's old scheme when you stop contributing. You yourself have some old schemes, like many of us, which you would rather do something else with if you could. You've evaluated the prospects and probably had to settle for the better of two or more undesirebale options. Don't you ever consider that perhaps looking back you could have done something better... I do and I've learn't from it...

Hence you need to extend your reasoning further... Should you "continue to contribute" or even "start to contribute" today, to something that will be unsuitable in a few years time. I've highlighted several examples of this in UK pensions and there will be more to come...

Secondly there are better options elsewhere, and definitely more diversity...why saddle yourself with something that has so many future unkown risks?

The worst part being that if the risks do crystallise, as they often have done as illustrated above, for yourself, myself and millions of others, under UK pension rules you are helpless. You can't get your money out until the Government allows you to. That will remain a fundamental flaw..

[AFKAFSinLOS]

You mentioned an experiment. Knowing you have a Thai spouse: Here's three: I know you think highly of your UK accountant...

1) Ask your UK accountant, which is better for an expat working and intending to remain in Thailand. A THB 300,000 investment in a Long Term Equity Fund. Or a similar GBP amount invested in a UK pension... Ask them for their reasons. Then also ask them also why they have never recommended this to you during your time in Thailand?

2) Ask your UK accountant which is more flexible a Thai RMF invested in Global Funds or a UK personal pension with defined contributions, and which on average have lower charges, as well as being more tax efficient. Again ask them why, and then why they never recommended to you while in Thailand...

3) Ask your UK accountant, which is more flexible in terms of what you can do with your money. The Singapore state system, which has Ordinary and Special Accounts which can be used for house purchases, medical bills, investments etc, or a UK personal pension?....Bear in mind also while Singapore has some cowboy firms like UK, generally MAS has some extremely high standards...

Lastly. Don't forget it's not either or... For someone with a reaonable pot, diversification is a god send. A key point being your UK advisor knows little of these things, and it's not in their interests either...

Note: I haven't even touched real offshore alternatives...

Edited July 11, 2008 by AFKAFSinLOS

[AFKAFSinLOS]

I think this should be on the forum since it directly affects English retires in Thailand and I don't read through it since it doesn't affect me, no harm no foul. what i am wondering is why, when I posted a few days ago, about the US policy where they are considering changing the taxing on social security for Americans retired, was the post taken off. i clearly said it was US so if no one else wanted to read it they could just skip right on by but it directly affect us Americans retired here. same with soccer, I am no interested in the slightest but I do believe it should be on the forum since so many living here are interested in it

just my two cents and since i am american you can take this opinion off also if you like. not complaining of course, just curious

To be honest I'd agree with you. No idea why they took it off, and hadn't realised they do that. Personally I'd be interested in US investments, as I think you need to consider various countries. The tax regime in US makes life difficult but there are some interesting options, and its a well-developed market useful for identifying future things that might happen good/bad here.

Investments in Thailand need to be compared to investments elsewhere. Particularly as 90%+ of people on TV weren't born in Thailand. Same as the threads on currencies, stock markets etc.

One thing I would say though, is I usually try and demonstrate how it is relevant to Thailand somehow as the above thread illustrates...

[GuestHouse]

I have made a distinction between Deferred Pensions and Active Pensions to which an Expat is still contributing for the express purpose of pointing out that what is good advice with respect to one may not be, and almost certainly is not good advice for the other.

I have nowhere stated that someone should start paying into a new UK pension.

You are of course quite right laws and personal circumstances can change - though to be fare we ought to add laws and personal circumstances 'anywhere' can change. We ought also to point out that not all such changes are a negative step - The protections put in place by the UK government following Maxewell are examples of very positive changes that holders of UK Occupational Pension Rights benefit from.

--

An experiment... I'm putting together an email to four 'Financial Advisors' in Thailand to discover what advice they would give me.

I wonder if, like yourself, they will be making assumptions about how much better they can do than my occupational pension whithout actually knowing what benefits my occupational pension offers?

For example, are you even sure that I personally contribute to my pension? 'Contributions' might well be on my behalf...

Edited July 11, 2008 by GuestHouse

[AFKAFSinLOS]

I have made a distinction between Deferred Pensions and Active Pensions to which an Expat is still contributing for the express purpose of pointing out that what is good advice with respect to one may not be, and almost certainly is not good advice for the other.

I have nowhere stated that someone should start paying into a new UK pension.

You are of course quite right laws and personal circumstances can change - though to be fare we ought to add laws and personal circumstances 'anywhere' can change. We ought also to point out that not all such changes are a negative step - The protections put in place by the UK government following Maxewell are examples of very positive changes that holders of UK Occupational Pension Rights benefit from.

--

An experiment... I'm putting together an email to four 'Financial Advisors' in Thailand to discover what advice they would give me.

I wonder if, like yourself, they will be making assumptions about how much better they can do than my occupational pension whithout actually knowing what benefits my occupational pension offers?

For example, are you even sure that I personally contribute to my pension? 'Contributions' might well be on my behalf...

Today's "Active Pensions" often become tomorrow's "Deferred Pensions". You're right the UK does try and improve things for the better. Unfortunately they often get it wrong... and that's the problem. More often than not there are some winners and some losers.

I still maintain the biggest flaws with UK and many other Government pension schemes is that they tie up your money (something incidentally cowboy offshore IFAs also do). If they change the rules you are often stuck with it for many years to come. You wouldn't carry on working for an employer that changed your working conditions to an unacceptable level, so why should you have to carry on with their pension scheme, or why allow a government to do this to you. No harm in investing your money with long term intentions. But better to be able to get it out again if you need/ want to...

I have nowhere stated that someone should start paying into a new UK pension.

I would note you often tell people to consider investing extra/spare cash in their UK pension schemes.

You're right I don't know all your scheme particulars. Two things to add:

1) You're someone who gives out a lot of personal infomation in your posts on an internet forum. Intelligent people remember what you have written elsewhere, and don't base their responses solely on your reply in a single thread.

2) Even with a non-contributory scheme, expats can often negotiate those contributions to go elsewhere into better more flexible investments not tied up for many years... I do know however, that you have some deferred pensions. Hence I would always question why you put yourself at risk of making the same mistakes again... There may be reasons, but there are often better alternatives for the same benefits with lower risks...you just need to find them, rather than hoping an advisor or employer will tell you. Learn to have your cake and eat it...

Good luck with getting good advice from your "4 advisors". Particularly in Thailand...

To be fair you should also add your UK advisor and ask them about investing in Thailand and how much they really know about much outside the UK...If your UK advisor actually has any of their own money outside the UK, that would be a nice first step...

Edited July 11, 2008 by AFKAFSinLOS

[GuestHouse]

To be fare.. you accept that you can't advise better choices without knowing the particulars of the current benefits.

And that of course extends to 'deferred pensions'... they may not be a mistake at all... they might be 'multiple baskets' - seldom a bad thing.

But admire your confidence in Thailand as an investment destination, if you can steal your nerves for that I'm sure I can sleep nights with my trust in the UK.

[AFKAFSinLOS]

To be fare.. you accept that you can't advise better choices without knowing the particulars of the current benefits.

And that of course extends to 'deferred pensions'... they may not be a mistake at all... they might be 'multiple baskets' - seldom a bad thing.

But admire your confidence in Thailand as an investment destination, if you can steal your nerves for that I'm sure I can sleep nights with my trust in the UK.

Naturally if you can't give all the facts I can't prove to you whether something is better or not. However, as a general comment: For someone of your age as an expat, 2nd/3rd generation UK immigrant, who cares about their family and looking after their children, with several years to retirement, married with a Thai wife and kids, a deferred pension in sterling will rarely be the optimum investment, since:

1) Increases and growth will be limited

2) It will be taxable when you eventually get to take it

3) You will probably be limited to 25%-33% in cash maximum when you take it. The rest will have a limited life span

4) It will die with you and your wife's generation

5) You won't be able to access it before you're 55 years old

6) You're overlooking currency risk in the possible future global aspects of your family life

Yes I can sleep very well at night with Thai investments. The reason being is that they are part of a diversified portfolio covering different countries, different asset classes, different currencies and of course different legal jurisdictions and best of all largely tax free and largely accessible short-medium term if desired, (with the exception of mainly the UK pension bugbears).

Your "advisor" should have briefed you on the basics of things like capm and portfolio theory to show how risk adjusted returns for even the best investment can usually be improved thru diversification...

You're not alone. It's a common misunderstanding to perceive individual Thai investments as high risk, and therefore anything to do with Thailand as high risk. It's also a difficult concept for some people that:

medium risk investments + high risk investments could actually equal low risk investments....

Life's not usually "either/ or"... learn to have your cakes and eat them all...should you choose to...

Edited July 11, 2008 by AFKAFSinLOS

[GuestHouse]

Would your advice be different if, for example, you were advising someone who is not a 2nd/3rd generation immigrant? - Say for example a UK Citizen who's family had been in the UK for many generations?

It seems to be something of an irrelevance?

Relevance is important I think.

[pkrv]

I think this should be on the forum since it directly affects English retires in Thailand and I don't read through it since it doesn't affect me, no harm no foul. what i am wondering is why, when I posted a few days ago, about the US policy where they are considering changing the taxing on social security for Americans retired, was the post taken off. i clearly said it was US so if no one else wanted to read it they could just skip right on by but it directly affect us Americans retired here. same with soccer, I am no interested in the slightest but I do believe it should be on the forum since so many living here are interested in it

just my two cents and since i am american you can take this opinion off also if you like. not complaining of course, just curious

That’s weird. In many cases the US pension is directly required to secure a retirement visa in Thailand. Why would it be deleted? This is critical information (especially for US retirees).

Edited July 11, 2008 by pkrv

[Lost in LOS]

I think this should be on the forum since it directly affects English retires in Thailand and I don't read through it since it doesn't affect me, no harm no foul. what i am wondering is why, when I posted a few days ago, about the US policy where they are considering changing the taxing on social security for Americans retired, was the post taken off. i clearly said it was US so if no one else wanted to read it they could just skip right on by but it directly affect us Americans retired here. same with soccer, I am no interested in the slightest but I do believe it should be on the forum since so many living here are interested in it

just my two cents and since i am american you can take this opinion off also if you like. not complaining of course, just curious

That’s weird. In many cases the US pension is directly required to secure a retirement visa in Thailand. Why would it be deleted? This is critical information (especially for US retirees).

My thoughts exactly. i will be getting SS next year and if they are attempting to raise the rate considerably then it will affect myself and most Americans living here. This was proposed by the democratic speaker of the house and the democratic candidate. seems important to me for the future of Americans living in Thailand, just like it is important for Europeans counting on a government program in their retirement here in Thailand.

[thaigene2]

Thanks for the post. Personally, I'll keep making the State Pension payments, Class whatever (I forget - is it 2 or 4..).

The UK Stakeholder and Private Pension schemes were a serious rip-off and I can't believe they still haven't changed them to the US or Canadian models. I stopped paying into the UK private schemes years ago. Anyone know if anything's changed in recent years as to getting one's money the f+ck out of those private schemes?? I'd even be willing to pay the tax on it just to get away from those rip-offs so I could re-invest in in something that will allow me control once again.

[AFKAFSinLOS]

Would your advice be different if, for example, you were advising someone who is not a 2nd/3rd generation immigrant? - Say for example a UK Citizen who's family had been in the UK for many generations?

It seems to be something of an irrelevance?

Relevance is important I think.

It's possibly relevant. Finances should be linked with lifestyle. Lifestyles differ according to many things, including your social environment and upbringing. KYC is an important part of investments, (although I appreciate you're probably more familiar with KFC ). It would raise questions that would not be relevant to say a UK citizen whose family has been there for many generations.eg Would you have plans to return permanently, or visit for extended periods? Would you have relatives dependent on your financial position not located in UK etc etc. That dependency could raise THB, USD, GBP liabilities that need to be managed...Currency is an important aspect of investing in UK pensions..Hence it could be relevant...

The main point I was making is that you assume people make a comment based on a single post you make. Bear in mind a common theme in your posts is to talk about yourself rather than the original posts subject So to claim people are unaware of your financial circumstances and therefore cannot make general comments is not always correct...

Edited July 14, 2008 by AFKAFSinLOS

[AFKAFSinLOS]

Thanks for the post. Personally, I'll keep making the State Pension payments, Class whatever (I forget - is it 2 or 4..).

The UK Stakeholder and Private Pension schemes were a serious rip-off and I can't believe they still haven't changed them to the US or Canadian models. I stopped paying into the UK private schemes years ago. Anyone know if anything's changed in recent years as to getting one's money the f+ck out of those private schemes?? I'd even be willing to pay the tax on it just to get away from those rip-offs so I could re-invest in in something that will allow me control once again.

Thaigene,

In terms of continuing your NI contributions while being an expat outside the UK:

- You can back pay these, so contributing now is not essential. eg you can often back-pay up to 6 years in in one go

- Hence it may pay to invest elsewhere and wait and see, so you can make the decision later...to have the maximum 30 years, to retire at 68, technically you could do nothing until 38 at the earliest. If you can back pay 6 years, that's 44... Most people will have a few years already, so it could be even later.

- The pension age may shift again, and amounts will continue to change (likely being less value). Might as well wait a while to see what you are actually getting, and if you're likely to even live until 68...

For someone close to retirement, paying NIs is not a bad deal. For someone on the other extreme, at aged 18 years, and having to wait 50 years for any return, that's a whole different ball game. Most people are in the middle. Hence I would prefer to wait and see, invest elsewhere, and do it as late as possible when it's clearer... . I also know that the return on the average UK unit trust is very likely to exceed the growth rate in state pensions... The only minor risk is they change the regulations and not allow you to pay... As you say though, they need money...so unlikely...

Totally agree, that if I could have my money back from UK pension schemes, and give back any tax benefit I received I would do.... . This is one area the UK is behind even Thailand...

{BTW It is possible in UK in some circumstances, but there are severe punitive tax penalties over and above the benefits you've received}

Personally:

- I'm stuck with some small UK pensions I have, so look for opportunities to improve them whenever possible

- I no longer contribute to them, and find better alternatives elsewhere

- UK pensions are the last main taxable investments I have...

- I like to think I learn from my mistakes...

Edited July 14, 2008 by AFKAFSinLOS

[thaigene2]

Thanks for the post. Personally, I'll keep making the State Pension payments, Class whatever (I forget - is it 2 or 4..).

The UK Stakeholder and Private Pension schemes were a serious rip-off and I can't believe they still haven't changed them to the US or Canadian models. I stopped paying into the UK private schemes years ago. Anyone know if anything's changed in recent years as to getting one's money the f+ck out of those private schemes?? I'd even be willing to pay the tax on it just to get away from those rip-offs so I could re-invest in in something that will allow me control once again.

Thaigene,

In terms of continuing your NI contributions while being an expat outside the UK:

- You can back pay these, so contributing now is not essential. eg you can often back-pay up to 6 years in in one go

- Hence it may pay to invest elsewhere and wait and see, so you can make the decision later...to have the maximum 30 years, to retire at 68, technically you could do nothing until 38 at the earliest. If you can back pay 6 years, that's 44... Most people will have a few years already, so it could be even later.

- The pension age may shift again, and amounts will continue to change (likely being less value). Might as well wait a while to see what you are actually getting, and if you're likely to even live until 68...

For someone close to retirement, paying NIs is not a bad deal. For someone on the other extreme, at aged 18 years, and having to wait 50 years for any return, that's a whole different ball game. Most people are in the middle. Hence I would prefer to wait and see, invest elsewhere, and do it as late as possible when it's clearer... . I also know that the return on the average UK unit trust is very likely to exceed the growth rate in state pensions... The only minor risk is they change the regulations and not allow you to pay... As you say though, they need money...so unlikely...

Totally agree, that if I could have my money back from UK pension schemes, and give back any tax benefit I received I would do.... . This is one area the UK is behind even Thailand...

{BTW It is possible in UK in some circumstances, but there are severe punitive tax penalties over and above the benefits you've received}

Personally:

- I'm stuck with some small UK pensions I have, so look for opportunities to improve them whenever possible

- I no longer contribute to them, and find better alternatives elsewhere

- UK pensions are the last main taxable investments I have...

- I like to think I learn from my mistakes...

Yes - thanks for your candor. I recall a Mate and I pumping money into every 'mutual' pension fund we could hoping for a windfall. Paid off in some respects - not others like The Equitable.

The UK of course is very much like Thailand where the elites control everything, but the Brits don't like to admit it! Cap in hand, Guv!

Anyway, you'd have to be an idiot to keep pumping money into the British funds, where they keep it for years, pay you peanuts when you reitre, and you earn bugger all in the interim - and SAVE NO TAX as an expat.

Weird. Anyone conspiring in that one? Tim nice but dim?

TG2

[pkrv]

Thanks for the post. Personally, I'll keep making the State Pension payments, Class whatever (I forget - is it 2 or 4..).

The UK Stakeholder and Private Pension schemes were a serious rip-off and I can't believe they still haven't changed them to the US or Canadian models. I stopped paying into the UK private schemes years ago. Anyone know if anything's changed in recent years as to getting one's money the f+ck out of those private schemes?? I'd even be willing to pay the tax on it just to get away from those rip-offs so I could re-invest in in something that will allow me control once again.

Thaigene,

In terms of continuing your NI contributions while being an expat outside the UK:

- You can back pay these, so contributing now is not essential. eg you can often back-pay up to 6 years in in one go

- Hence it may pay to invest elsewhere and wait and see, so you can make the decision later...to have the maximum 30 years, to retire at 68, technically you could do nothing until 38 at the earliest. If you can back pay 6 years, that's 44... Most people will have a few years already, so it could be even later.

- The pension age may shift again, and amounts will continue to change (likely being less value). Might as well wait a while to see what you are actually getting, and if you're likely to even live until 68...

For someone close to retirement, paying NIs is not a bad deal. For someone on the other extreme, at aged 18 years, and having to wait 50 years for any return, that's a whole different ball game. Most people are in the middle. Hence I would prefer to wait and see, invest elsewhere, and do it as late as possible when it's clearer... . I also know that the return on the average UK unit trust is very likely to exceed the growth rate in state pensions... The only minor risk is they change the regulations and not allow you to pay... As you say though, they need money...so unlikely...

Totally agree, that if I could have my money back from UK pension schemes, and give back any tax benefit I received I would do.... . This is one area the UK is behind even Thailand...

{BTW It is possible in UK in some circumstances, but there are severe punitive tax penalties over and above the benefits you've received}

Personally:

- I'm stuck with some small UK pensions I have, so look for opportunities to improve them whenever possible

- I no longer contribute to them, and find better alternatives elsewhere

- UK pensions are the last main taxable investments I have...

- I like to think I learn from my mistakes...

Yes - thanks for your candor. I recall a Mate and I pumping money into every 'mutual' pension fund we could hoping for a windfall. Paid off in some respects - not others like The Equitable.

The UK of course is very much like Thailand where the elites control everything, but the Brits don't like to admit it! Cap in hand, Guv!

Anyway, you'd have to be an idiot to keep pumping money into the British funds, where they keep it for years, pay you peanuts when you reitre, and you earn bugger all in the interim - and SAVE NO TAX as an expat.

Weird. Anyone conspiring in that one? Tim nice but dim?

TG2

I shall have you know Tim Nice But Dim carries the can for the 'Empire and all that'. That he was educated to about the level required, was irrelevant I will have you know!

[GuestHouse]

and SAVE NO TAX as an expat.

Curiouser and curiouser.

[thaigene2]

and SAVE NO TAX as an expat.

Curiouser and curiouser.

I meant you save no tax on these private pension schemes if you're working abroad and not paying UK taxes - the only reason one would take out one of those private Stakeholder Pensions is for the tax savings, right? You'd be better off just sticking the money in the bank wouldn't you? At least that way you could access it.

[pkrv]

Out of interest I just made a scan of the web and could not find a way to check my UK National Insurance contribution details on line.

Is this possible? - I mean this is a lifelong commitment of payments this is surely imperative?

[AFKAFSinLOS]

Out of interest I just made a scan of the web and could not find a way to check my UK National Insurance contribution details on line.

Is this possible? - I mean this is a lifelong commitment of payments this is surely imperative?

No I don't think you can check on-line, that would be too easy. The following is a useful starting link for UK tax questions, with a reasonable search function

http://www.hmrc.gov.uk/individuals/moreiwt.shtml#individuals

If you want any real personal info you have to write to them in Newcastle. There is a telephone number, but about all they can help you with is telling you which form to submit... I've done this once and received a reply. The second time I did it a few months back, they told me they wouldn't be able to process anything until after August due to system and legislation changes.

At the risk of sounding anal in quoting forms... , you can enter the following in the serach function and dowload the following which may be useul

- CA3638 How to get a pension forecast = the one you need to complete if you want a forecast

- NI38 Social Security Abroad

- Leaflet on shortfall in contributions: FAQs = http://www.hmrc.gov.uk/faqs/vol-conts.htm

CA3638.pdf

[pkrv]

Out of interest I just made a scan of the web and could not find a way to check my UK National Insurance contribution details on line.

Is this possible? - I mean this is a lifelong commitment of payments this is surely imperative?

No I don't think you can check on-line, that would be too easy. The following is a useful starting link for UK tax questions, with a reasonable search function

http://www.hmrc.gov.uk/individuals/moreiwt.shtml#individuals

If you want any real personal info you have to write to them in Newcastle. There is a telephone number, but about all they can help you with is telling you which form to submit... I've done this once and received a reply. The second time I did it a few months back, they told me they wouldn't be able to process anything until after August due to system and legislation changes.

At the risk of sounding anal in quoting forms... , you can enter the following in the serach function and dowload the following which may be useul

- CA3638 How to get a pension forecast = the one you need to complete if you want a forecast

- NI38 Social Security Abroad

- Leaflet on shortfall in contributions: FAQs = http://www.hmrc.gov.uk/faqs/vol-conts.htm

I guess we came to the same conclusion.

[pkrv]

Out of interest I just made a scan of the web and could not find a way to check my UK National Insurance contribution details on line.

Is this possible? - I mean this is a lifelong commitment of payments this is surely imperative?

No I don't think you can check on-line, that would be too easy. The following is a useful starting link for UK tax questions, with a reasonable search function

http://www.hmrc.gov.uk/individuals/moreiwt.shtml#individuals

If you want any real personal info you have to write to them in Newcastle. There is a telephone number, but about all they can help you with is telling you which form to submit... I've done this once and received a reply. The second time I did it a few months back, they told me they wouldn't be able to process anything until after August due to system and legislation changes.

At the risk of sounding anal in quoting forms... , you can enter the following in the serach function and dowload the following which may be useul

- CA3638 How to get a pension forecast = the one you need to complete if you want a forecast

- NI38 Social Security Abroad

- Leaflet on shortfall in contributions: FAQs = http://www.hmrc.gov.uk/faqs/vol-conts.htm

I guess we came to the same conclusion. PKRV.

[Guderian]

Out of interest I just made a scan of the web and could not find a way to check my UK National Insurance contribution details on line.

Is this possible? - I mean this is a lifelong commitment of payments this is surely imperative?

No I don't think you can check on-line, that would be too easy. The following is a useful starting link for UK tax questions, with a reasonable search function

http://www.hmrc.gov.uk/individuals/moreiwt.shtml#individuals

If you want any real personal info you have to write to them in Newcastle. There is a telephone number, but about all they can help you with is telling you which form to submit... I've done this once and received a reply. The second time I did it a few months back, they told me they wouldn't be able to process anything until after August due to system and legislation changes.

At the risk of sounding anal in quoting forms... , you can enter the following in the serach function and dowload the following which may be useul

- CA3638 How to get a pension forecast = the one you need to complete if you want a forecast

- NI38 Social Security Abroad

- Leaflet on shortfall in contributions: FAQs = http://www.hmrc.gov.uk/faqs/vol-conts.htm

I gave them a call 2 or 3 years ago, and they were helpful and very efficient. Within a fortnight I had a paper statement of what I had paid and what I might be entitled to at age 65. It was all accurate and free.

I wonder if anyone can help me with the following question?

I have an entitlement to a deferred pension from 14 years service with a former employer (one of the largest UK companies). This will be payable in 8 years time, when I reach 60. Every year until 2004 they sent me a statement of the indexation applied to the pension, an estimate of what the pension might be worth when I reach 60, and an estimate of the tax-free lump sum. They now seem to have decided to stop doing this for deferred pensioners. I chase them each year for a statement, which they reluctantly provide, but this year they told me that they are no longer providing updates. This doesn't sound right to me. The fund will be worth over £200K by the time I am 60, and forms a significant part of my future financial planning. How can they refuse to tell me how it has been indexed each year, or what it's current and projected values are? I thought, to be honest, that there was a legal requirement for them to do so. Does anyone have a link to a site explaining the rules about this sort of thing? Alternatively, is there a central UK pensions advice service or ombudsman that can help with these matters?

Thanks if you can point me in the right direction.

[GuestHouse]

I wonder if anyone can help me with the following question?

I have an entitlement to a deferred pension from 14 years service with a former employer (one of the largest UK companies). This will be payable in 8 years time, when I reach 60. Every year until 2004 they sent me a statement of the indexation applied to the pension, an estimate of what the pension might be worth when I reach 60, and an estimate of the tax-free lump sum. They now seem to have decided to stop doing this for deferred pensioners. I chase them each year for a statement, which they reluctantly provide, but this year they told me that they are no longer providing updates. This doesn't sound right to me. The fund will be worth over £200K by the time I am 60, and forms a significant part of my future financial planning. How can they refuse to tell me how it has been indexed each year, or what it's current and projected values are? I thought, to be honest, that there was a legal requirement for them to do so. Does anyone have a link to a site explaining the rules about this sort of thing? Alternatively, is there a central UK pensions advice service or ombudsman that can help with these matters?

Thanks if you can point me in the right direction.

It's not clear in your question who it is you have written to. The most likely set up is that you will have a Board of Trustees to your Pension and a Pension Administrator (usually and Investment/Insurance Company).

The legal power in this set up is with the Trustees, so you ought, if you have not already, write to the Trustees and ask them for a clarification.

The rules of my own pensions are that an Annual report shall be issued every year to every member and where applicable a Pension Forcast shall be given for early retirement. All members get a pension forcast.

So something seems at odds here.

There is independent help available:

For general help and advice try www.opas.org.uk

or if you have a seriuous concern regarding compliance to pension law www.pensions-ombudsman.org.uk

As a general rule the pension Trustess should be communicating with you - Lack of communication is a good complaint to start with.

Take a look at this from the Pensions Advisory Service Requirements for Annual Report

Go Get 'em!

Edited July 17, 2008 by GuestHouse