UK Pension Transfer

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How to Transfer a Pension Fund From the UK to New Zealand

Moving to NZ from the United Kingdom and want to bring your pension fund with you? Progressive Financial Planning in Christchurch will:

• Advise you on the pros and cons of UK pension transfers to NZ (some funds are best left in the UK)
• Explain the rules and tax regulations that will affect what you are able to do with your UK pension fund
• Liaise with your UK pension fund administrator on your behalf to obtain answers quickly 
• Recommend where to place your UK pension money in New Zealand for maximum benefit

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Why Transfer Your UK Pension to NZ?

Our certified financial planners have facilitated the transfer of UK pension funds on behalf of many clients. Transferring your United Kingdom pension to New Zealand has many benefits:

• Better control and accessibility of your pension funds by being held in NZ
• It allows you to consolidate several small pensions into one NZ fund
• Removes the effect of currency fluctuations on your pension
• Enables you to explore more options when re-investing the funds
• Reduces tax liabilities in NZ
• Offers you more withdrawal options
• Less trouble accessing your pension when you need it

In the UK the Finance and Pensions Acts of 2004 significantly simplified the legislation governing what you can and can’t do with regard to transferring UK pensions to overseas countries.

You may now transfer your UK pension assets into a Qualifying Recognised Overseas Pension Scheme (QROPS).  The HM Revenue & Customs Department in the UK determines which overseas schemes are eligible for QROPS approval.

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How does it work? The simplified version…..

1. You provide us with the name of the pension provider, your client number and policy details for your existing pension fund in the UK.
2. We ask you to sign an “Authority to Act” form. This permits us to approach the pension provider on your behalf.
3. We approach the UK pension company for a current Transfer Valuation Quotation and other documentation peculiar to that pension administrator.
4. We help you select a NZ pension investment scheme provider and complete the application form with you.
5. The documentation releasing the funds is received from the UK provider and forwarded, with the application, to the NZ provider.  In some instances this occurs directly to the NZ provider.
6. Some pensions are very quickly transferred in a matter of weeks and others take months!  Much of the difference depends on the efficiency of the UK provider’s administration and their individual rules limiting how they operate, and also how complicated the investment in the UK is.

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Early Access to Pension Funds

Depending on the NZ scheme selected, you may be able to access your funds as early as 50 years of age.  At that time, far more options will be open to you as to where you may invest the final sum of the funds becoming available.

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The Five Year Rule

During your initial five year period of residency in NZ, the NZ scheme which received your funds must undertake to report any withdrawals you make from the fund, to HM Revenue & Customs in the UK.  These withdrawals may be due to retirement, death, or rollover into another fund.  If early withdrawals are made you may be liable for up to 55% UK tax on the amount withdrawn.

After being a resident in NZ for 5 years, you become exempt from any UK tax charges if you were to make a withdrawal from the funds.

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Don’t be Caught Out  - Continuing contributions to your pension fund

You may elect to continue saving and adding to your NZ pension fund, if for instance you are still working.  If you then elected to withdraw some of your funds for any reason, it would be deemed to be withdrawn from the UK portion first, regardless of your additional savings, and therefore could be liable for UK taxation if within the first five years.

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Contact us to arrange a free financial advice appointment

A free disclosure document is available on request.

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