Skip to main content

Retirement PlanningUK Pension – Left Behind…


This article was reviewed by Chris Singer, CFP®.

Did your pension move when you did?

Do you have a UK (United Kingdom) pension? There are a good number of British expatriates who are now Canadian residents that have pensions back in the UK. Have you forgotten about that plan from an old employer? Do you know your options?

When I create a retirement plan for a client I review what savings and pensions they may have. Quite often, past pension plans can be forgotten or misplaced, so this exploratory part of the process is critical so that nothing is missed.

Any Canadian permanent resident or citizen can move any occupational or private pension to Canada as long as you have not started to receive payment from it already. A Qualifying Overseas Pension Scheme (QROPS) allows British expatriates to transfer their UK pension to registered Canadian investments. Please note that it can take as little as a few weeks or in some cases several months to transfer a plan from the UK, so you want to plan ahead.

Possible benefits to transferring your plan:

1. Flexibility – You can choose how the money is invested depending on your risk profile and financial objectives.

2. Surviving Spouse – Most UK pensions will provide 50% of the original monthly benefit to the surviving spouse, whereas the Canadian registered investment amount can rollover tax free to the spouse.

3. Estate Planning Options – One important area of planning is being able to choose how your assets are distributed upon death. UK pensions will typically not provide any inheritance to your children; when you and your spouse pass away then it just stops. With a Canadian registered investment you can flow the balance of the account after tax to your children or another beneficiary.

4. Pension Health – Some UK pensions have had financial difficulty and have either collapsed or made changes to their plans. Keeping up with the health of your UK plan can be difficult when you are no longer in the country. Keeping your investments all together under one financial advisor makes it easier to stay current with your financial plan.

5. Exchange Rate & Fees – Having your pension invested in Canadian dollars can help protect your retirement income from the impacts of currency fluctuations. There can also be extra banking fees for overseas transfers to your personal account.

As with any financial strategy we would recommend ensuring that you have your personal situation reviewed by a professional to make sure that is done in the best way possible. When reviewing pensions you want to always look at what guarantees they may offer.

If you have any questions or would like your plan reviewed feel free to contact us.