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BREXIT TO FUEL DEMAND FOR UK PENSIONS TO BE MOVED OUT OF BRITAIN

Brexit will be a trigger for more people to move their British pensions out of the UK, affirms the founder and CEO of one of the world’s largest independent financial advisory organisations.

 The observation from Nigel Green, chief executive of deVere Group, comes after the shock result of the EU referendum last week.

 Mr Green comments: “Brexit will be a trigger for even more people to move their British pensions out of the UK. As the reality of what a Leave result in the EU referendum means for personal finances sinks in, people will now be reassessing their retirement planning strategy.

 “We can fully expect demand for HMRC-recognised overseas pension transfers to be further boosted thanks to the UK’s decision to leave the European Union.

 “Due to the huge amount of uncertainty that’s created, more and more people who are eligible to do so – that’s to say expats and those who are considering retiring outside Britain – will be seeking to safeguard their retirement funds by transferring them into a secure, regulated, English-speaking jurisdiction outside the UK.”

 He continues: “Arguably, the most pressing concern – and therefore the main trigger for people to consider transferring their pensions out of the UK – is the significant fall in the pound following the Brexit result.

 “For those living in the EU and in receipt of a UK pension, a plummeting pound has serious consequences; the cost of living becomes more expensive.

 “An established way to help mitigate these problems of currency fluctuations, which can seriously erode retirement income, is to transfer your UK pension into a Qualifying Recognised Overseas Pension Scheme, or QROPS.

 “One of the main benefits of a QROPS is that you can choose which currency you wish to receive payments in. This eliminates the risk of exchange rate fluctuations, which makes the individual’s financial situation more predictable, consistent and secure.

 “Those who move their pension pots into a QROPS will also be able to take advantage of the other associated benefits. These include that funds can be fully passed on to heirs after death (after five full years of non-UK residence), there is greater investment flexibility and freedom, and there’s the possibility to allay UK income tax or death charges of up to 45 per cent.”

 Mr Green goes on to say: “Another key reason why the demand for QROPS is set to soar is purely down to volume.  We can expect expat numbers to increase.  This is because it’s likely that over the next two years, whilst Britain is still a full member of the EU, those who are thinking about retiring to places like Spain and France will do so sooner rather than later.

 “They will want to move whilst it is still easy to do so. No-one really knows for sure how Brexit will complicate things for Brits seeking to move to other EU countries after the UK has officially exited.”

 The deVere CEO adds: “There have been some questions raised over the legalities of QROPS following the Brexit decision.  Let’s be clear: QROPS started under EU law, but now there are separate agreements in place between the UK and individual jurisdictions, such as Malta, regarding pensions transfers.

 “This means that when the UK leaves the EU, these agreements will remain intact.  Therefore, the pension funds established in these jurisdictions will still meet the criteria to be recognised as Overseas Pensions Schemes under UK legislation.”

 Mr Green concludes: “Considering the wider post-Brexit vote scenario we are facing, we can assume that the wider international financial advisory sector is about to enter a phase of enormous activity and growth.”