The best SIPP for EU residents is an International SIPP. Sometimes referred to as a ‘non-resident SIPP’, it can be a useful retirement planning tool for expatriates.
Many of us live, work or retire in an EU country and have a long ‘to-do list’ that needs ticking off before we can settle into everyday life. Pension plans should be on that list.
Options for EU residents with UK pensions
The key to effective retirement planning is selecting the most appropriate pension plan for our circumstances. Many expatriates are unsure what to do with their British-based pensions post-Brexit. EU residents with UK pensions have several options available.
The first option is to do nothing. Changes should be minimal for those with only one pension plan where the provider is still happy to deal with non-UK clients post-Brexit. Some providers are, however, withdrawing or limiting services to customers living in the EU.
In many cases, pension companies will only provide telephone responses for valuation requests and won’t send information by post or email. They cite GDPR protocols as being the main driver. Although there is some truth in this, some are using Brexit and the fact that the UK is no longer in the Single Market to rationalise their pension book. In other words, it isn’t worth providing services to non-UK clients.
Even if a provider is OK dealing with EU clients, there are often restrictions regarding which funds can be used for investment and where benefits can be paid. Many EU residents ‘Euroise’ their financial planning either straight away or over time. Most UK Pension providers will only allow Sterling valuations and fund options and pay income withdrawals into a UK bank account. This may not be ideal for a lot of EU-based pension investors. So, although doing nothing may work, it isn’t the best option in many cases.
Beware of misleading adverts
Numerous adverts on social media attempt to scare people into action by using the term ‘frozen pension’. There is no such thing! Pensions left in the UK continue to be invested and are not in any way ‘frozen’; you will always be able to access your money!
The International SIPP: best SIPP for EU residents
Some EU residents have more than one UK pension plan. Moving abroad is a good time to review your pension arrangements and do some tidying up. Consolidating all pensions into one easy-to-monitor plan is often the best option whether you live in the UK or the EU. Dealing with several pension providers is time-consuming and difficult, particularly when it comes to taking benefits. Thankfully, it’s relatively easy to transfer all your plans into one. This may involve moving all plans into your favourite pension.
However, the best SIPP for EU residents is the International SIPP option. International SIPPs are UK pension plans specifically designed for non-UK residents; they are not available to UK residents.
International SIPPs provide full services for EU clients, including valuations, correspondence, and benefit payments. Fund choice is multi-currency and multi-market. As such, portfolios can be managed and denominated in Euros (or other currencies); income payments can be sent directly to Euro bank accounts.
In many cases, this is a much more convenient way of managing pension plans. Importantly, currency risk can be eliminated or ‘hedged’ by spreading investments around various currencies.
The ORIGO transfer service
Most UK pension providers subscribe to the ‘ORIGO‘ transfer system. Essentially, this allows pension providers to transfer funds between each other without the need to obtain original signatures from customers. There is a code of trust between pension companies and the regulator, which means transfers can be completed quickly and efficiently.
In summary, if pensions aren’t on your ‘to-do list’ when moving to an EU country, maybe it’s time to add them in. A stitch in time saves nine; spending a little time reviewing your pension arrangements now will save a lot of time and hassle later.
If you would like further information on the best SIPP for EU residents, please download the guide below: