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There are a number of things
that you need to be wary of in pension transfers
The
five major things to watch out for
-
Not transferring to a
current QROPS scheme -
While most UK pension providers will not let you do this, if you do it
will cost you 55% of your total fund value. To ensure that you don't
get caught by this it is best to choose a reputable QROPS and transfer
specialist.
-
Unclear and hidden fee
structures
- Management charges on NZ funds is such a big issue we have dedicated an
entire page to it...
click here for more
In addition, there are often exit penalties, fund change charges and
administration fees that can add up to a large proportion of your
transferred fund. We strongly advise that you investigate all the
associated charges before transferring your pension fund.
-
Promises that fall outside
the legislation - We have recently seen some companies offering deals
where people can gain access to some of their transferred fund in cash.
This clearly contradicts the UK requirements and could give rise to a 55%
tax penalty on the fund.
-
Pensions aggregation -
If you have multiple pension schemes in the UK you do not need to
aggregate your pensions in the UK prior to transferring them to New
Zealand. Some companies suggest that you do to eliminate the work
required for them to transfer. This aggregation may just end up
delaying your pension transfer.
-
Locked in until 65 -
Most QROPS registered funds in New Zealand will lock all or part of your
pension in until you turn 65. There is no NZ statutory requirement
to hold private funds until 65. So be wary of schemes that try and
lock you in to 65
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