The UK Budget announcement on 19th of March has highlighted the UK Government’s intention to cease the transfer of pensions for members of Public Sector Schemes. Clarification of this came on the 6th August whereby it was announced that transfers would be banned from the following schemes;
- Armed Forces
- Civil Service
There has been no timeline published regarding any potential bans before April 6th 2015, however we believe it possible that measures could be implemented prior to this date. Regardless of an announcement of the timeline prior to April 2015, there is a limited window of opportunity for members of those schemes whom have sought advice and wish to transfer their funds out of these Public Sector Schemes.
So how will such bans on transfers actually affect members? Broadly if a member has migrated to another country to retire, and they are unable to transfer their funds, this will mean that their retirement income stream will be permanently subject to exchange rate fluctuations as long as they live overseas. Additionally, there may be negative tax consequences for receiving UK retirement income, compared to drawing income from an overseas scheme.
bdhSterling expects further announcements to clarify the HMRC position in their 2014 Autumn Statement.
Importantly, if you are a member of a defined benefit scheme, or any UK pension fund, please contact us for a free initial assessment to outline your options.