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Top Tips for a Successful Pension Transfer

pension transfersTransferring your UK pensions to New Zealand can give you a great opportunity to invest your fund how you would like to, and to unlock a portion of your pension funds. But you are right to be wary of any companies offering a pension transfer service which “sounds too good to be true” or is marketed too aggressively.

At Broadbase International we take a different approach. We have made a huge resource of pension transfer information available both here on our website and as a free e-book (our comprehensive UK Pension Guide ), and we offer this to you free and without further obligation.

So read on for our pension transfer top tips for Brits in New Zealand.

01Don’t pay too much in up-front fees. A good pension transfer service will be clear about its charges, and we don’t think that you should be charged to ask questions about your specific situation. The thought of losing up to 5% of your fund in transfer charges in one hit makes us wince – this could be a year’s growth on your fund, and once you add compound interest into the equation it just gets worse.

02Be very wary of the exchange rate your pension fund gets when it is transferred to New Zealand. Most pension transfer services just give you the exchange rate on the day that the transfer comes through, but you have absolutely no control over when this may be – pension transfers generally take between 6 weeks and 6 months, and there can be a lot of movement in the Pound Sterling to NZ Dollar exchange rate in that time. We are able to keep most UK pensions in Pounds, earning a competitive rate of interest, until you can get an exchange rate you are happy with. Then, when you are ready to convert your Pounds to NZ$, we are able to offer you excellent exchange rates on the day you ask for them, and your transfer is only a phone call away.

03Take an active interest in where your pension funds are invested. The company you worked for in the UK probably gave you a restricted choice of where your funds were invested, and most people pretty much trust that their company will make the right choice for them. But when you have transferred your funds, a whole new range of opportunities opens up for you, and you can often even personalise your own investments. Some pension transfer services will only offer you one NZ pension fund, which may not be the right one for you. We offer you a choice of New Zealand QROPS pension funds, and you can manage these actively or have them managed for you. It’s good to have options.

04Get expert advice. Your pension is a valuable asset and more importantly it is your valuable asset. Some pension transfer services transfer UK pensions without offering you advice as to whether it is the best course of action for you. We take the time to make sure that you understand your options and we are committed to getting the best result for you. At Broadbase International we have extensive experience of both the UK and NZ pensions industries, giving us an excellent understanding of the legislation and practicalities of transferring your pension.

05Don’t take NO for an answer. Some pension transfer services ask you for an estimate of the size of your fund before they will even talk to you. Some places will only transfer big pensions; others will not look into final salary pensions for you. We transfer all eligible pensions, big and small, and we will look into those “complicated” transfers for you. It’s all part of the service.

06Don’t spend it all! Gaining early access to a portion of your funds can give your lifestyle an incredible boost – imagine paying off your mortgage early, or being able to take a break from your career to raise your family or re-train. But your pension funds are designed to supplement your income in retirement, so we would not advise taking out more than 40% of your fund before you retire. And if you do choose to drawdown lump sums before you reach retirement age, for example to pay off your mortgage, we would advise you make payments into your pension pot. We’re happy to discuss any aspect of your retirement planning with you.

Please read on for an example of how you can save thousands by choosing the timing of when your pension funds are converted from pounds to dollars.

Please fee free to contact us if you have any questions about your UK pensions, and don't forget to order your free copy of our comprehensive UK Pension Guide.

Last Updated ( Monday, 15 February 2010 )
 
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