Doctor, Dentist, Teacher, Spy?

If you ever worked in the UK in the NHS or as a Teacher or even in the Armed Forces, Police or other government service, come April 2015 you can breathe a sigh of relief and perhaps your phone will not ring as often.

Why is that? I hear you cry.

The UK Government has announced that all transfers out of unfunded UK defined benefits pension schemes will be banned effective April 2015.

An unfunded pension scheme is one in which here is no actual money. The benefits paid to retirees are made either from the governments other resources or from current contributions of those paying in.

The government cannot afford to have people taking cash lump sums in lieu of pension benefit especially in the current low interest rate environment and this is one reason why they want to stop you from doing it. They simply don’t want to stump up the cash in advance

One other reason is that those who know they will not live very long and whose pension income either dies with them or is a drastically reduced widows/widowers pension would rather have the cash in hand as it could be better to take cash now rather than die within a year of retirement.

The reality is that most people probably would not want to exchange what is a gilt-edged guaranteed income from a AAA-rated government but there will be people, perhaps expatriate people who have no intention of ever returning to the UK for whom it just might be something worth looking at.

After April 2015, you will no longer have the option. If you want to be certain that leaving it there is the best thing for you, let me know and we can check. We independent actuaries and a UK FCA authorised branch of our group to ensure you get the very best advice

On the plus side, most of those QROPS salesmen will not be calling any more.