Expats Lose UK State Pension Annual Indexation Appeal
Posted: 17 March 2010
Those pensioners who had moved to countries such as New Zealand, Australia, South Africa and Canada (among others) were yesterday dealt a bitter blow. The European Court of Human Rights yeasterday rejected an appeal from a group of UK expatriate pensioners by an 11 to 6 majority. This means that they will continue to have their UK State Pension payments frozen i.e. with no annual indexation increase. The pensioners wanted to receive increases in line with inflation as they would if they were resident in the UK. The Department for Work and Pensions who are responsible for the payment of the UK State Pension were pleased with the outcome as their primary responsibility is to aid those pensioners in the UK who contribute to our economy through spending and payment of UK taxes. Those who are currently in the process of planning their migration to a country with no reciprocal agreement really need to make sure they have suitable private pension provisions in place where QROPS arrangements and advantages can then be utilised. Suitable pension planning and appropriate financial advice prior to your migration can lead to your successful migration. Out of those migrants who return to the UK, one of the main reasons for their decision to return is finances. Pension planning prior to departure can mean that you can take advantage of UK tax reliefs. In many instances UK pensions can then be transferred to a QROPS in a more tax friendly jurisdiction. A decision to transfer to a QROPS however should not be taken lightly, particularly where final salary schemes such as the NHS, Teachers, Armed Forces and Local Government are concerned. For further information and advice on expatriate pension and QROPS planning and information on how the European Court of Human Rights ruling will affect your pension planning, please contact Andrew Hains, Senior QROPS adviser on the QROPS adviser team at Offshore QROPS on 01483 202072.
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