THE RETIREMENT DECISION

THE RETIREMENT DECISION

So why should someone transfer their pension?

WHAT IS THE PROBLEM?

• In 2008/09 public service schemes paid out £32bn • This is about two-thirds of the cost of the basic state pension.

• the gap between contributions and pensions in payment is currently £4.5bn per annum • By 2015 this will double to over £9bn per annum

WHAT IS THE PROBLEM?

THE PRIVATE SECTOR REMEMBER…. What happens in the public sector follows in the private sector “In January 2012, Shell became the last company in FTSE100 to close its final salary pension scheme to new entrants”

(Financial Times, 7 th January 2012)

“A recent survey by the National Association of Pension Funds found that only 19 per cent of final salary [schemes]… are still open to new hires”

(Financial Times, 7 th January 2012)

COMPARING THE BENEFITS: SIPP v QROPS

RETIREMENT • NOT to be confused with ‘working retirement’ • Retirement is when you take benefits NOT when you reach a specified age • You may be able to take benefits from your pension scheme BEFORE leaving employment (age 55+)

DEATH BENEFITS (BEFORE RETIREMENT) UK SIPP QROPS 100% return of fund value to beneficiaries NO IHT on death benefits SUMMARY When holding funds before retirement then the choice is

SIPP

TAX FREE CASH Status UK SIPP QROPS 25% of original transfer value 25% of fund value 30% of fund value and maybe more… SUMMARY If maximum cash is the objective then the choice

depends on the client’s residency status

TAX ON INCOME UK SIPP NZ QROPS MALTA QROPS Up to 35% tax GIBRALTAR QROPS 2.5% tax Taxed under PAYE 0% tax SUMMARY For tax free income at source then the choice is clearly

New Zealand QROPS.

However, understanding of

Double Taxation Agreements (DTA)

will be vital

DEATH BENEFITS (AFTER RETIREMENT) UK SIPP QROPS 100% return of fund value to beneficiaries 55% tax charge on death NO IHT on death benefits SUMMARY The choice for tax efficient death benefits AFTER retirement is

QROPS

DOUBLE TAXATION AGREEMENTS DTA analysis makes it clear that: • there is no ‘one size fits all’ jurisdiction • QROPS advice has taken on an extra dimension • The choice of QROPS jurisdictions will be largely governed by the retirement destination of the client WE CAN HELP!

INVESTMENT OPTIONS UK SIPP NZ QROPS MALTA/GIBRALTAR QROPS Self Select FSA regulated Discretionary Fund Manager Self Select SUMMARY The choice of investment options depends on the client’s requirements

COST COST SET-UP ANNUAL UK SIPP £300 (plus VAT) £250 (plus VAT) NZ QROPS £600 £800 MALTA QROPS £1,350 £1,350 GIBRALTAR QROPS TBA TBA

QROPS A QROPS is suitable for someone who: • Has completed five consecutive tax years outside the UK • Has retired offshore and intends to remain offshore • Is about to retire offshore and intends to remain offshore • Has a fund value approaching the lifetime allowance of £1.5M

UK SIPP We still firmly believe that in most cases the Brooklands SIPP will be the correct choice before retirement Even though the Brooklands SIPP is an FSA regulated product you can still offer it to non-UK residents Your client can enjoy the regulatory benefits and low cost of SIPP With easy transition to QROPS when required

BROOKLANDS PENSIONS WE ACKNOWLEDGE that client circumstances change WE UNDERSTAND that your client’s retirement plan is possibly the most important financial decision they will ever make WE PROVIDE the best possible options and do not limit you to one type of scheme or jurisdiction WE DO NOT CHARGE EXIT FEES

BROOKLANDS PENSIONS We ensure we adhere to the highest standards of regulation and put our members first FSA registration number 463682