When it comes to managing your UK pensions and preparing them for retirement, especially when you live outside of the UK or you are a US connected individual, care needs to be taken. You will have to deal with a lack of providers willing to help you, currency risk and ever-changing pension legislation. Cross Border Financial Planning can help wherever you are in the world with your UK pension planning. Although many UK pension providers are unwilling to work with non-UK residents, you still have a choice between Personal Pensions and Self Invested Personal Pensions.
This guide is there to provide a summary of the key benefits and features of each:
Personal Pensions
- One company provides Pension, Trading Platform and Underlying investment strategies.
- Low cost.
- At age 55, Flexible Access Drawdown can be accessed.
- Limited to Pound Sterling denomination.
- Easy to understand.
- A qualifying pension in the eyes of the Internal Revenue Service (IRS).
Self-Invested Personal Pensions (SIPPs)
- The SIPP only provides the pension. Your adviser will recommend an independent trading platform and investment strategy.
- Higher levels of flexibility where the pension can be denominated and invested in other currencies such as US Dollars or Euro. Income can also be paid in these currencies.
- At age 55, Flexible Access Drawdown can be accessed.
- More investment choice and access to professionally managed investment portfolios.
- Total costs can be higher due to specialist trading platforms and investments that offer other currencies.
- Potential for further US taxation if Passive Foreign Investments Companies (PFICs) are held within the investment portfolio should the owner be a US connected individual.
Our role as cross border financial advisers is to consider your situation and objectives and then make a recommendation on whether a personal pension or SIPP is most appropriate. The providers of both types of pension are regulated by the Financial Conduct Authority so whichever options you use, you can be rest assured that the company is one that is appropriately authorised and regulated.
If you have any questions, please don’t hesitate to contact us here.