Speculation that the British Government is planning a multi-billion-pound raid on pension contributions in the forthcoming Budget has resulted in a “significant spike” in the number of people seeking advice on transferring their pensions out of the UK, says the deVere Group.
As plans for the so-called ‘mansion tax’ were rumoured to be scrapped this week due to fierce criticism, there is speculation that the coalition is now seeking ways to bolster its coffers by scrapping tax relief to higher-rate tax payers on their pension contributions.
There are also suggestions that George Osborne, could cut the tax-free amount that can be taken out of a pension pot when someone reaches 55 years old.
“As uncertainty builds ahead of the Budget, savvy pension holders are becoming increasingly aware that the goalposts could change and some of the tax advantages like the tax free lump sum could be reduced or even removed meaning there is less incentive to keep their British pensions in the UK.
“As a result of the uncertainty and the desire of a larger number of expats to retire outside of the UK, our advisors are reporting a significant spike in the number of existing and potential clients considering moving their pensions into HMRC-recognised overseas schemes,” says Nigel Green, CEO of the deVere Group, the world’s largest independent financial advisory group.
“If higher-rate tax payers lose tax relief on contributions or the tax free lump sum is reduced or even removed, the benefits of moving a pension to HMRC approved QROPS for expats will become more attractive as it would enable those individuals to be able to safeguard and maximise their pension pots to a greater degree,” he adds.