UK pension holders will increasingly be seeking to move retirement funds overseas as fears grow about the Budget in March, predicts the Investment Director of one of the world’s largest independent financial advisory, asset management and fintech organizations.
The warning from James Green of deVere Group comes ahead of Chancellor Jeremy Hunt delivering the first formal UK Budget since 2021 on March 15. The last official Budget was presented in October 2021 by Prime Minister Rishi Sunak, when he was Chancellor. Since then, a “series of panicked fiscal statements” have been issued by the Treasury. When retirement funds are transferred overseas into a pension scheme based outside the UK, but that still meets HM Revenue & Customs (HMRC) rules, they are not typically subject to inheritance or income tax in the UK. In addition, after paying initial tax on the transfer, pension holders can often benefit from a much lower tax rate, amongst other benefits.
The deVere Investment Director concludes: “It’s a difficult move politically to go after pensions as the Conservatives typically do well from older voters, but the Treasury needs to bolster the coffers.”