Civil Servants – both current and former – are now publicly expressing their concerns, as retirement promises and pre-agreed arrangements look likely to be reneged upon.
In the face of adverse public sector pension conditions, which include a huge deficit bill made worse by austerity measures, and the threat of having to work for longer and receive less, many ex-employees are looking for ways to cut their losses and get the savings they have contributed throughout their career placed into something more stable and reliable.
The Government are set to ban all public sector pensions across every sector from being transferred once April 2015 comes around, leaving expatriates and those with retirement plans which don’t involve staying in England, just a few months to consider their options.
Pamela Lee, a former Civil Servant from the Borough of London, spoke to Money International from Valencia, Spain; “Having worked and contributed to a pension scheme for 23 years, I now don’t know for sure when I will be able to draw my pension, or how much I will get. I have 10 years to go before I will be able to draw my pension under current rules, but that is likely to be extended before I even get there. It’s very concerning as we have been planning our retirement based on the rules as they stood when we left. Now it has also started me thinking about the fact that my money is being exposed to high risk by remaining there. The growth has all but stopped as the indexation level has been shifted, and I am concerned that in 10 years the pound could be weak in comparison with the Euro.”
These are all valid concerns, but for the next few months an alternative option is available. A Qualifying Recognised Overseas Pension Scheme (QROPS) offers expatriates across the world the chance to be closer to their money, have it kept in a deficit-free fund and currency of their choice, choose their level of investment and benefit from substantial tax breaks not available in the UK.
Retirement becomes a more prevalent issue the older you get, however for those planning or hoping to retire abroad, the time to consider all available options for securing a comfortable retirement is now. The option to transfer a UK-based pension into an overseas scheme will be shut down for the public sector as of April, and this has led to a huge surge in activity around QROPS, with some providers reporting an uplift in enquiries of 300% compared to this time last year.
QROPS can be extremely beneficial for the right people, but professional advice should be sought before weighing up the best way to move forward. One thing that everybody can agree on during these turbulent times, is that the words “uncertain” and “retirement” don’t sit together too well, so for expatriates, the next few months could represent a last opportunity to address this issue.