Have you left the UK to work or retire abroad?
If you have permanently or temporarily moved to Hong Kong, it can be a challenge to ensure all of your financial affairs are in good order.
Many British expats move overseas with an early retirement in mind. Helping to achieve this goal means that you need to ensure that you have a solid retirement plan. This might require you to transfer your existing UK pension scheme or set up a new one that aligns with your expat lifestyle.
Bespoke Pension Advice For British Expats
Whilst your compensation package might be more than enough to accommodate your expat lifestyle, it might not include a pension plan which is critical for retirement. In many countries a pension scheme is not a statutory requirement, and for this reason, you must have a robust pension plan designed specifically for your needs. This pension plan has to consider changeable employment situations, possible relocation plans, and unforeseen circumstances.
Even if your Hong Kong employer offers a pension plan like the ORSO pension scheme, changes in your employment contract can introduce new dynamics into your retirement plan.
Thankfully, a full range of expat pension solutions can be tailored to meet the needs of individual expatriates based on their lifestyle, handle uncertainties and align with your unique preferences and goals. Due to the unique difference between these schemes and UK private pension schemes, you will need an experienced expat pension adviser to design a bespoke pension solution.
UK Pension Transfers for British Expats In Hong Kong
In April 2006, the UK Government introduced new legislation, to help British expats have more control over their pensions when moving overseas.
Thanks to Recognised Overseas Pension Scheme (ROPS) or International SIPPs (Self-Invested Personal Pensions), British expats now have more control over their pension plans. These schemes allow you to transfer your UK pension to a permitted overseas pension scheme, allowing for greater investment freedom and an opportunity to minimise your tax liability, depending on your own circumstances.
Pension Planning When Moving Overseas
If you are moving permanently to Hong Kong from the UK, an international pension scheme can help you to keep your UK pension and avoid some of the restrictions associated with relocation.
Some of the benefits you get from international pension schemes such as a ROPS are:
- Tax-free deposit of up to 30%
- Lower tax rates since you only pay tax in your country of residence
- Zero Income Tax charge in the event of death
- Ability to consolidate multiple historic pensions
- Opportunity to access an extensive range of global investment funds
- Freedom to pass your pension to a beneficiary of your choosing
- Freedom to access pension benefits from age 55 without penalty
- Payments in any major currency, thereby eliminating the impact of exchange rates
Whilst these obvious benefits may make the decision to switch to an international pension scheme like a ROPS or International SIPP seem an easy one, it’s important to seek expert pension advice. In the case of defined benefit pension transfers worth over £30,000, it is required by law to seek financial advice from a qualified adviser before transferring your pension.
Expat Pension Advice On Other Pension Schemes
The Hong Kong Pension landscape offers varied pension schemes for British expats. However, you don’t have to rely on the pension scheme that your employer offers.
- ORSO (Occupational Retirement Scheme Ordinance):A Hong Kong employer establishes an ORSO pension scheme for its employee(s). It falls under the oversight of the Mandatory Provident Fund Schemes Authority (MPFA) in Hong Kong. An ORSO scheme can offer significant benefits to expats, especially if they share company ownership.
- Superannuation Schemes: If you plan to relocate to Australia after working in Hong Kong, then knowing the best superannuation scheme for your lifestyle and retirement goals is vital. Our financial planners at Pyrmont Wealth will highlight your options and assist you with setting up and managing your superannuation scheme.
- Offshore Planning: Specific schemes are available to help expatriates with all their retirement planning needs. Expats living overseas may benefit significantly from planning their retirement using offshore financial solutions.
Comprehensive Pension Advice for Expats
One benefit you will get from talking with a financial adviser is a broad understanding of the pension landscape for British Expats in Hong Kong. Through multiple conversations about your life goals and retirement aspirations, our financial planners can craft a LifePlan inclusive of pensions and retirement planning to accommodate for your current and future lifestyle needs.
Additionally, our financial planners will be able to identify potential obstacles that can impede the plan’s ability to deliver on its income expectations. For instance, Hong Kong law requires employers to enlist employees in the local Mandatory Provident Fund (MPF). Whilst this might seem beneficial, it is an inadequate provision for most British Expats. The sums in an MPF are meager and cannot cover the living costs of a British Expat.
Furthermore, many expats value their freedom to move. However, due to the different rules governing pension schemes in other countries, they may be unable to save towards retirement when they move to another country. They need a competent pension solution that considers future relocation plans and other lifestyle variables.
Understanding how these obstacles apply to each expat is what we do best. We ask the right questions and use years of life-centred financial planning to advise the best pension solution and more importantly, the right LifePlan for your needs.
Aside from advising and assisting in developing and managing pension plans, we also offer various related services to provide a robust retirement solution.
Tax Efficient Investment Holdings: We design offshore pension solutions for British Expats living in Hong Kong. These solutions can include both cash and other asset types. We offer advice from our in-house team and network of legal advisors on how to structure a legal offshore retirement arrangement.
Inheritance Tax and Estate Planning: Our effective estate planning can help to:
-Pass on your wealth (and pensions) quickly and easily. Some estate planning solutions can avoid the often lengthy and expensive process of probate, ensuring your loved ones receive your wealth more efficiently
-Help to keep your affairs private. This can be particularly useful for those with complex family circumstances
-Help to avoid potential tax liabilities. Using the right estate planning tool can help to mitigate or avoid serious tax consequences for your family
-Provide greater control to the distribution of your assets
Working With Pyrmont Wealth
We understand expat pensions can be complex. Whatever the nature of your situation, we can clear the air and help you manage that complexity. Whether you are relocating your career, family, and life overseas, our team of experienced financial planners will help you manage expat pensions, tax, and retirement.
To discuss your plans in more detail, please get in touch with us.