If you worked in the UK civil service, armed forces, teacher or NHS and are not yet taking your pension then your options for securing your future pension will no longer exist. From April 2015 the UK Government will no longer allow any transfers into offshore pension schemes (QROPS) as your schemes are classed as unfunded. This means that today’s pensioners are being funded by the current workforce, and your future pension will be funded by the future workforce. This, according to the UK is “to protect current and future tax payers”.

Workers in the NHS and the armed forces who are looking to move their pension overseas at retirement have very little time left to make the change after the government announced a ban on pension transfers for unfunded defined benefit (DB) schemes. By shutting the door on offshore pension transfers they are ensuring that they do not have to borrow money today, to pay out future pension holders and they can take future payments from future income. This is not the way the pension system was designed, it should be that an investment pot of capital sits behind each pension, but the way they have been managed, and the recent recession ensures that this is no longer the case.

We have been able since 2006 to take advantage of government policies of allowing pension holders who live abroad, to take ownership and control of their pensions through QROPS (Qualified Recognised Overseas Pension Scheme). Many of our clients in Thailand and around the world have taken advantage of this policy, which means that their pension is 100% owned by them, to give their family the FULL benefit of their UK pension, as well as increased income during their retirement. This window of opportunity is about to close, and we believe that any requests for valuations which are not made before the end of 2014 may become locked in the system when the transfers stop in April 2015. When the window closes that means that the scheme WILL HAVE TO REMAIN with the UK Government system. There are risks of pension incomes falling further, and retirement ages increasing, and the pension holders will no longer have control over this. It is vital that people are informed about the changes, as the government will not be notifying individuals personally, and it is important that you know your rights, and ensure you can take necessary steps to control your pensions.

If you have one of these schemes, then you must first request a transfer value for the scheme, which will give us a better idea what your pension would give you if moved into an offshore scheme. Then we are able to evaluate if a transfer would be beneficial to you, compared with leaving the pension in the UK. An offshore scheme would give you 100% ownership of the pension, but not 100% access to the funds during your lifetime. This is to protect both HMRC, and yourself to ensure that you have an income for life. Upon your death you are able to pass 100% of the remaining funds to your next of kin with in most cases a zero inheritance tax liability.

The key change from your perspective is that unfunded schemes (this includes the Armed Forces Pension Scheme, the Principal Civil Service Pension Scheme, the NHS Pension Scheme and the Teachers’ Pensions Scheme) will no longer allow members to transfer their pension. If you have any questions on how this will affect you, or what options may be open to you please get in touch with us.

Government has announced a ban on transferring funds from public service pension schemes overseas

Workers in the NHS and the Armed Forces who are looking to move their pension overseas at retirement have very little time left to make the change after the Government announced a ban on pension transfers for unfunded defined benefit (DB) schemes.

The Chancellor confirmed in a document recently presented to Parliament that members of defined benefit pension schemes which are funded – where an investment fund sits behind the pensions in payment – will be able to transfer their pensions to a defined contribution (DC) scheme after taking advice.

However, those in unfunded schemes – where the contributions today go to pay pensioners directly tomorrow – will be banned from transferring their pensions “to protect the Exchequer and taxpayers”. The Armed Forces, civil service, NHS, firefighters, police and teachers all fall under the bracket of these “pay as you go” schemes.

Continue reading (The Telegraph) →

The new, tougher regulations and guidelines announced today for the UK’s pension transfer market are being hailed as “a landmark moment for consumers and the industry” by Nigel Green, the founder and chief executive of deVere Group.

The observations from Mr Green, are in response to the Treasury’s confirmation that only advisers operating within the Financial Conduct Authority’s (FCA) framework will be able to offer advice on transferring defined benefit (DB) pension schemes into Qualifying Recognised Overseas Pension Schemes (QROPS).

The move follows the publication of a review commissioned by the FCA that found “a risk of customers losing out on retirement income due to poor advice.” The review looked at nearly 300 cases from bulk pension transfer advice exercises between 2008 and 2012.

Mr Green comments: “It is right and appropriate that those offering advice to the public on transferring UK pensions must be of a professional level that is expected by the UK regulatory body, the FCA.

“In addition, we champion the revised QROPS guidelines that insist that a client’s tax position and risk appetite, amongst other factors, are fully assessed; and that schemes that are substantially underfunded will have the right to refuse transfers.

Continue reading (deVere) →

Britain’s civil servants are urgently seeking advice on transferring their pensions out of the UK after UK Chancellor George Osborne launched an explosive budget 2014 bombshell on the industry.

According to the boss of, one of the world’s largest financial advisory firms, deVere Group has received a 20% surge in British civil servants looking to transfer their pensions out of the country after Osborne proposed to ban the activity later this year.

“Public sector workers will no longer be able to transfer their civil service pension schemes. The reason for this, it can be reasonably assumed, is that these schemes are alarmingly underfunded and the Treasury is concerned that it will burden with the debts,” said Nigel Green, the founder and chief executive of deVere Group.

“Whilst it is, in many respects, understandable that the government has taken this decision it is, of course, extremely worrying for the pension savers within schemes that are so enormously underfunded through no fault of their own.

Continue reading (International Business Times) →

Increasing numbers of the estimated 4.7 million British expats are taking their pensions out of the UK, according to two financial advisory firms

Increasing numbers of pensioners who’ve found a place in the sun have opted to move their pensions overseas with them.

Wealth management specialists the deVere Group saw a 15 per cent increase in the number of clients transferring pensions into a Qualifying Recognised Overseas Pension Schemes (QROPS) last year.

QROPS, which were established in 2006, are HM Revenue & Customs-recognised pension schemes based in selected jurisdictions outside the UK. Around 10,000 expats move their pensions each year.

“The 15 per cent growth in our QROPS business to the year ending December 2013 reflects the sustained upward trend in the QROPS sector more generally,” said Nigel Green, the deVere Group founder and chief executive.

“I would attribute this to the growing public awareness of the mounting problems of the UK pension system. There is a growing public perception that there are fewer incentives to keep retirement funds in the UK due to the scrapping of some key age-related benefits, among other factors; and because, as clients frequently tell us, pension pots have in recent years become easy targets for stealthy and not-so stealthy government raids.”

Continue reading (The Telegraph) →

The pension funding gap of Britain’s top companies has widened in the past year despite billions of pounds of corporate cash being injected into retirement schemes, a report said on Tuesday.

Pension consultants LCP said pension scheme deficits for companies in the UK’s FTSE 100 blue chip stock index grew to 43 billion pounds at June 30 compared with 42 billion a year before, as fund assets didn’t generate enough cash to cover obligations.

The finding is an illustration of the impact of repeated rounds of “quantitative easing”, under which the Bank of England has been buying back bonds to boost economic growth, contributing to a sharp drop in the yield on British government gilts – a staple investment for pension funds.

Pension funds have been left searching for higher-yielding investments such as real estate while they wait for gilt yields to turn higher.

Continue reading (Reuters) →

Britain’s state pension one of the worst in the world

BRITAIN’S state pension is among the worst in the developed world with only Mexico offering its workers less.

Britons on average wages can expect a pension worth just 33 per cent of their final salary when they retire, according to the Organisation for Economic Co-operation and Development yesterday.

Of the 34 countries in the OECD, only Mexico had a worse rate at 29 per cent compared to a 54 per cent average across the rest of the bloc.

The startling statistics were contained in the organisation’s annual Pensions At A Glance report published yesterday.

Continue reading (Daily Express) →

Speaking at the end of a three-day conference in Yokohama, Japanese president Shinzo Abe said Africa will be an engine for world growth in the coming decades and Japan has to invest more heavily in the continent. The fifth Tokyo International Conference on African Development finished its three-day meeting in Yokohama on Monday. The TICAD, held every five years, was started in 1993 at the initiative of Japan as a forum for African leaders to discuss Africa’s economic development and the shape of assistance to the continent. Some 50 African leaders attended this year’s conference, as did Prime Minister Shinzo Abe.

Japan pledged $32bn (£21bn) in aid to Africa, including money to tackle militant Islamists.  Japan appears to be worried how its rival China is gaining more and more influence in the African region.  “Africa will be a growth centre over the next couple of decades until the middle of this century… now is the time for us to invest in Africa,” Mr Abe said at the end of the conference co-hosted with the African Union (AU), World Bank and UN.

Continue reading Africa future centre of World Growth →

There has been some speculation that capital markets have priced in the ending quantitative easing (QE) by the US Fed.  I believe that it is impossible to predict what will happen to the US and global economy, or to global capital markets, as QE is withdrawn. Therefore it is illogical to believe that the effects of tapering QE can be priced in.  Since the ending of QE will mean $85 billion less demand for US and global financial assets each month, if its withdrawal is priced in then surely – everything else being equal – we should see the S&P 500 index at more subdued levels? Not at all-time highs, as it has been this week, and on a trailing P/E of 17.9 (as calculated by ThomsonReuters).

Proponents of the argument point to last week’s positive reaction by the US stock market to stronger than expected jobs data, noting that it defied the recent habit of falling on any good economic data which might in turn trigger the ending of QE. At last, they argue, investors are looking beyond the ending of QE and to the increased corporate profits that will come from the economic recovery.  Certainly, the US and the global economy are recovering, illustrated recently by another good third quarter earnings season in the US and the October jobs data.

Continue reading Has the US stock market priced in the ending of QE? →

British businesses could face a £450 billion bill as a result of plans to force pension funds to protect themselves from risk with extra capital. If the proposed rules were introduced, they would accelerate the closure of Britain’s remaining final salary pension schemes in the private sector. The EU body that regulates occupational pensions estimated that the deficit in the UK’s defined benefit pension schemes would almost double from £237bn to £450bn if the new rules, called “Solvency II”, were introduced.

Steve Webb, the minister for pensions, said: “The EU’s latest figures show the extremely high cost its plans would place on UK defined benefit pension schemes. “This confirms that any such new rules would harm businesses’ ability to invest, grow and create jobs, and many more schemes could be forced to close. I continue to urge the Commission to abandon these reckless plans.”

The National Association of Pension Funds (NAPF) warned that moving to the new rules for pensions would put a “huge burden” on Britain’s remaining final salary pension schemes and the businesses that run them. Joanne Segars, the NAPF’s chief executive, said: “The EU plans for UK pensions come with a clear and unpalatable price tag. Businesses trying to run final salary pensions could be faced with bigger pensions bills to plug an astonishing £450bn funding gap. This would have a highly damaging effect for the retirement prospects of millions of workers.

Continue reading New EU rules would double the cost of British pensions →