Looming article 50 ruling: overseas pension transfers surge
According to recent research, the forthcoming triggering of Article 50 is helping to propel the current rush to move UK final salary pensions into overseas schemes.
The statistics from deVere Group indicate a rise in enquiries over recent weeks, with their own growing by 21% since the beginning of December 2016. They expect momentum to rise the closer they get to “trigger day”.
Commenting on the intensified interest in pension transferral was Nigel Green. The founder and CEO of deVere Group stated: “It’s understandable why so many are considering transferring their UK pensions into an HMRC-recognised overseas pension scheme at the moment. They recognise the golden opportunity right now.”
He highlighted the three key factors which had driven the sudden increase. Green stated that these were economic uncertainty following the referendum result, final salary pension deficits coming under pressure and reduction or gilt yields which have increased transfer values.
Green also commented on the funding gap as well as the potential difficulties in funding pension schemes following an economic downturn.
“It has been reported that Britain’s pension funding gap almost doubled during 2016 and it could soon reach a trillion.
“The size of the gap brings into question the survival of many company pension schemes. Certainly, many will need to make significant changes to the terms of employees’ pension schemes.
“No-one knows for sure what a post-Brexit Britain will look like and how the economy will fare. If there is an economic downturn, for example, it would become increasingly difficult to fund pension schemes. Plus, the value of the assets that the schemes invest in would likely depreciate.”
He then went on to acknowledge that although not everyone was suitable for the overseas schemes, it may be best for those that are eligible, to do so.
“All in all, so-called ‘gold-plated’ final salary schemes are, in many cases, looking considerably less golden than they once did. As such, people are, quite sensibly, looking to safeguard and take control of their hard earned retirement income.
“Of course, an overseas pension transfer is not suitable for everyone. However, for those who do qualify, with the countdown on to the triggering of Article 50, now might just be the ideal time to do so.”