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Benefits of transferring your pension to the UK

By April 21, 2016October 10th, 2023Pension fund

Benefits of transferring your pension to the UK

April 21, 2016

Relocating abroad is such a costly affair, many South Africans who have relocated abroad are wary of moving any existing assets or money left in South Africa. In fact, we are taught from a young age to leave our savings alone – we are told that our retirement funds should be left alone.

Yet, the rules change when you emigrate. And if you’ve moved to the UK, you may be doing yourself a disservice by leaving your savings back home.

You could increase the value of your pension

Expats living in the UK can stand to benefit from the UK’s pension incentive programme. This programme incentivises expats for reinvesting the proceeds of their foreign pension into a UK pension.

Although you will initially need to pay compulsory SARS withdrawal tax on your pension, once this pension is converted to pounds and reinvested in a UK pension, you could receive a significant pension incentive bonus and increase the initial value of your savings by up to 25%.

In addition to this, you will also be earning interest on your pension in a much stronger currency, which could see your savings grow much faster.

What if I want to return to South Africa?

The great part about all this is that should you ever want to return to South Africa, you will receive the income on your retirement savings tax free.

What about my retirement annuity?

The process for transferring retirement annuities abroad is slightly more complicated than that of pension transfers. But thanks to legislative changes in 2008, South Africans living abroad can transfer the proceeds of their retirement annuities offshore even before the normal retirement age of 55.

In order to encash your retirement annuity and transfer it across borders you will need to apply for financial emigration. Financial emigration does not change your South African citizenship or passport privileges, but merely changes your residency status for exchange control purposes. Once you have emigrated financially you are free to move money out of South Africa through your blocked bank account (held at any of the major South African banks).

Talk to and transfer your savings today!

Of course, the administrative process in transferring retirement funds abroad is a bit of a hassle. But can facilitate the entire process from start to finish. If you’re interested in moving your savings abroad and possibly increasing the value, simply leave your details and we’ll call you!

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