At the start of 2017 one item on the business agenda, amidst a very changing economic and political backdrop, is access to people and skills. The obvious points that comes to mind is the referendum on EU membership held last summer and the US election, with what that may hold for international trade and movement.
Yet that is not the be-all and end-all on the matter of immigration and emigration. Research after the UK vote showed that Brexit didn’t just mean the UK’s Brexit: it means exit – from the UK for businesspeople, from their businesses. That was the finding from a poll of 250 Britons seriously considering emigration. A fifth of these respondents cited the EU referendum vote as the main reason why they want to emigrate.
In fact, as the respondents were a sample of business movers and shakers, it’s a concerning matter that emigration from the UK is looking so attractive to those of an entrepreneurial mind-set…
There are certainly plenty of people who feel that Brexit will affect their business or personal prospects. For those similarly minded, it should be pointed out that it might be harder to move abroad than at first thought.
Perhaps predictably, the research uncovered that sorting out the pension is bottom of the list when it comes to pre-emigration tasks. Failing to take the appropriate advice in time could well leave many out of pocket when it comes to collecting their full financial entitlements.
An example of this is that an individual will have their UK pension fund held and benefits paid to them in GBP Sterling. However, by moving abroad a UK pension member’s lifestyle will then be in a different currency to that of their pension funds. This could make a huge difference in retirement where exchange rate fluctuations, between the GBP Sterling and the currency of the country that they are living in, leads to uncertainty of income levels in retirement. Any detrimental effect in the exchange rate could leave the member with a shortfall in their pension income levels and could lead to them returning to the UK, if they cannot meet that shortfall from other sources.
According to our research, less than half of people (43 per cent) seriously considering a permanent move abroad said it was important to arrange their pension transfer before emigrating. It’s understandable, of course: in all the excitement of planning a move abroad, there are a thousand and one other considerations, from finding a place to live (cited as “important” by 81 per cent of respondents), to arranging visas (78 per cent), to sorting out medical cover (61 per cent).
Pensions are everyone’s lifeline and only 13 per cent of our respondents said their existing pension would only make up a “minor” part of their retirement income, so it’s not something we should be complacent about. Unless you’re really sure that you’re intimately acquainted with the rules surrounding pensions, speaking to professional retirement planners and IFAs could be the wisest financial decision you’ll take in your life.
Half of future emigrants (48 per cent) say that they think they know how to transfer their pensions, yet two thirds admitted that they do not understand the rules involved in moving their pension overseas. Furthermore, 28 per cent have not considered how to manage their pension following emigration, while more than half do not even know what returns they will get from their provider once they make the move.
And, if Brexit blues mean that you’re seriously thinking of making that move abroad, the time to start planning is right now. We recommend that the process of moving your pension abroad can easily take six months, so it’s essential that you get your affairs in order in good time. And for something so important, it’s worth spending a bit of money – certainly more than the £50 an hour that a quarter of our respondents thought it should cost for expert advice...