Pensions Advice Please

[timsk]

I don't know about you lot, but I find that close friends and family who know me very well tend not to ask me financial based questions. I guess they've sussed out just how little I really know.:cheesy: This is not the case with work colleagues and acquaintances. For some reason, they assume I have vast knowledge and experience of every financial product under the sun. They canvass my opinion regularly on anything from house prices to pensions and everything in between! It happens to be the latter about which a new work colleague has sought my advice. He's a delightful chap from India but refuses to accept my protestations that I know nothing about pensions. Anyway, he's keen to start one but his concern is that one day he may want to return to India and wonders if he'll be able to take it with him when he leaves the U.K.
Any thoughts on this and any other pension based issues that might affect him would be much appreciated. I'd like to help him if I can - thanks.
Tim.

 

[A Dashing Blade]

Absolutely, totally not my area at all but would think that ability to import money into India would be a factor

 

[mikeeg]

I don't think he will be able to move it (unless legislation changes) but at retirement age there is nothing stopping him from getting pension paid into a foreign bank account (check and ensure whether a double taxaxtion agreement exists between UK and India though) if he returns to India.

If he sets one up, he'll receive full tax relief on contributions going in (subject to net relevant earnings and annual allowance which is currently £225,000 per year) and pension environment is largely free of most UK taxes.

If he decides to setup pension and moves back to India before retirement age, then pension will just lapse and can stay as is (although ability to contribute more than £3,600 gross per year will cease without UK earnings). He should still be able to access it at a later stage though.

You should stress that whatever he does may be affected in the future by change in legislation.

Just my thoughts.

 

[timsk]

Cheers chaps!

Tim.

 

[anley]

I don't know if he will be able to take it with him, I assume not as he'll have to buy some sort of annuity. But he will be able to take a lump sum (around 25%) when he retires.

But he doesn't need to take it with him as it will be paid into his UK account which can then be transfered to an Indian one.

The only trouble will be the potential exchange rate. Say the rate moves against him (Sterling/Rupee) he might find that his montly payments shrink by say 25%. Of course they can always go up by 25% as well.

My advice is to pay part of his allocated pension money into a UK fund and the other half (or some %) into the Indian stockmarket and property. That way he'll have the best of both worlds.

 

[Pitscum]

I don't know if he will be able to take it with him, I assume not as he'll have to buy some sort of annuity. But he will be able to take a lump sum (around 25%) when he retires.

But he doesn't need to take it with him as it will be paid into his UK account which can then be transfered to an Indian one.

The only trouble will be the potential exchange rate. Say the rate moves against him (Sterling/Rupee) he might find that his montly payments shrink by say 25%. Of course they can always go up by 25% as well.

My advice is to pay part of his allocated pension money into a UK fund and the other half (or some %) into the Indian stockmarket and property. That way he'll have the best of both worlds.

he can get it paid into an account. taking cash into india isnt the problem, its getting cash out of india......

 

[nine]

Originally Posted by:

Timsk,

Its a good question I think many people on these boards should ask.
I've been looking into the details of moving a pension offshore and it would appear it is possible to transfer a UK pension to a QROPS - Qualifying Recognised Overseas Pension Scheme.
Always best to speak to a specialist as this Labour gov has royally FU pensions generally so I wouldn't know if there are a minimum number of years he has to keep the thing running before transferring abroad, etc.

This is not the case with work colleagues and acquaintances. For some reason, they assume I have vast knowledge and experience of every financial product under the sun. They canvass my opinion regularly on anything from house prices to pensions and everything in between!
Tim.

As an aside this is no bad thing milk it for all its worth. Nothing succeeds like success and if they already think you're successful...