Ex-pat Pensions: Things to Do and Consider

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There are many different types of pensions. You can either get one from your employer or receive one as a social benefit. Understanding and maximising the benefits of pensions can be quite challenging. Add to that the added difficulty of being an ex-pat living in a foreign country. And if you have a pension and also living abroad, there are several things you need to remember. Here is a detailed discussion of what you need to keep in mind as an expatriate pensioner. 

How does your home country qualify you for a pension plan?

Your home country follows a specific rule when qualifying an individual for a social pension. And as a person who works and lives abroad for extended periods, you need to know these requirements. For example, does your home country total the amount of time you’ve worked abroad along with any local employment you may have had? 

Tracking your employment history will also help make sure you don’t waste any of the time you’ve worked, regardless of how short. This is especially true for ex-pats who may sometimes forget their employment details. If you have a financial advisor, you may want to discuss what pension benefits you’re entitled to by considering your cumulative employment as a local and as an ex-pat. 

How does your country’s taxes impact your pension?

There are many intricacies involved in pensions for expats. An individual may qualify for both a social pension and an employment pension. And since they’re working abroad, there’s always a foreign element involved. And while there are many complexities, there are also ways you can boost your benefits. One example is getting a tax credit. But, you could also pay twice on taxes depending on the circumstances that apply. Speaking to your financial advisor in detail about taxes is critical to ensure that you’re getting the benefits and paying only what you’re supposed to. 

What are your options if you’re from the UK?

UK residents have several options when it comes to their pension. This is regardless of if they live or work in a different country. 

  1. Leave the pension in a UK plan. If you leave the pension in the UK while you’re living as an ex-pat abroad, you can request the earliest payout at age 55. If you want to wait until the actual pension payout date, you can monitor the status from time to time. 
  2. Transfer your UK pension to a qualified arrangement in your residence country. If you have a QROPS, you may transfer your pension plan abroad. But, make sure you know all the qualifications. 
  3. Pay into your UK pension. If you live abroad and work for a foreign employer, you can keep a pension in the UK and continue paying for it. However, this option may limit tax benefits and other reliefs. 

In conclusion, those with ex-pat pensions have some considerations to think about. But, if you manage your finances well, you won’t have to worry by the time you retire. Always seek the help of a professional financial advisor for assistance and resolution on any concern you have.

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