Bearing all of this in mind, if you’re an expatriate of working age who is concerned about saving towards your retirement, it could just be that a financial adviser will suggest you make the most of an offshore retirement scheme. Such a savings vehicle is an incredibly flexible plan, but whether or not it suits you will depend on your personal circumstances. Also, many expatriates fail to get ahead in the retirement race, not because an offshore pension is wrong for them, but because they are concerned that having to save intensively will somehow encroach on their lifestyle and standard of living today.
However, with careful planning it’s actually easy to get ahead without hindering your current lifestyle or having to save so intensively in later years.
Don’t think that tomorrow will never come, it is here soon enough and there are so many options open to you in the meantime to secure your financial future. Remember also that as an expatriate you can benefit from tax advantages and often defer any tax liability when investing, thus allowing your capital to effectively grow faster. No matter what your financial situation is right now, there are plans and solutions available to you to help you do the very best for your retirement, and your expatriate status can give you a significant financial leg up the savings ladder. You will not only feel much better about your future financial security, you will also have set yourself head and shoulders above your peers back home in terms of getting money in place for a comfortable retirement if you begin your retirement savings now.
If you are still not convinced that today is the right time to begin saving into a pension plan, it may help to imagine that you are retiring tomorrow. How much money would you like to have, or would you need to write yourself a cheque for, to ensure that you have enough in your bank to last you, your spouse and possibly even your family in retirement for just one year?
Be realistic – what do you need – £30,000 a year? £50,000? £200,000? Now remember that no one is going to give you something for nothing, and so to ‘earn’ the payout you require you are going to have to save and plan for your retirement.
The next thing to think about is how many months you have got left before you retire, i.e., how many months have you actually got left in which to save towards your pension?
If you’re 40 and you want to retire at 60 you’ve got just 240 monthly pay days…what if you’re 50, that’s only 120 more pay cheques…
Now you need to remember inflation, and all of a sudden you begin to realise that you have a limited amount of time to get a substantial amount of money into your final retirement pot, therefore the time could not be more right to begin getting a savings plan in place.
If you look at one of the most flexible alternatives that you have, namely an offshore savings and investment scheme, and you look at it in light of an onshore UK pension plan and compare the two, you will quickly see how much more flexible the offshore option is, and how potentially appropriate it is to fulfil your needs. An onshore UK pension will force you into buying an annuity when you reach retirement, but a carefully and appropriately chosen offshore equivalent can let you take an income, the full lump sum, or a combination of both when you retire, or even before. What’s more, any money left over is yours to give to your children or family.
Despite the fact that all this is very concerning, you needn’t give yourself sleepless nights, because by saving and investing regular amounts – however small – you can make a significant potential difference to your retirement income and quite simply, avoid financial disaster!
For those of you who have already retired, by carefully investing a lump sum you can maximise your income potential. Basically there are so many more retirement savings options available to you as an expat that give you tax benefits, financial benefits and flexibility benefits, that you owe it to yourself and your financial future to explore these options.
What’s the Difference Between an Onshore and an Offshore Pension?
Onshore pension plans, (sometimes called domestic pensions), offered in your home country or nation of domicile are savings products that the government often makes tax-attractive on the way in, but into which you can only contribute a set maximum amount annually, and which you may not be able to contribute into if you move abroad.
Often a UK pension’s inflexibility makes them unsuitable & undesirable for certain groups of people such as expatriates.
Offshore pensions on the other hand are completely different – they are the embodiment of flexibility. It is their flexibility that makes them so attractive to so many people.
Who Can Benefit from an Offshore Pension?
Offshore pensions or savings structures are particularly appropriate and attractive vehicles for expats, would-be expats and residents in high-tax countries intending to become non-resident on or before their retirement. Our recommended advisors often can secure a significant bonus for you to make then even more attractive. If you would like to receive a personalised recommendation, We will simply need to know your age, when you would like to retire and how much you would like to save.
The Advantages and Special Features of an Offshore Pension
An offshore pension is a highly flexible savings policy, and the most common benefits are that you can contribute as much as you like into an offshore pension, so add in, lump sums to top up your annual contributions. Additionally, if you’re currently in a high paying job, you can save intensively now so that you don’t have to worry so much in the future about getting ahead with your retirement savings.
Many offshore pension plans are wrapped by life assurance companies, and as a direct result many governments in the world recognise these investment vehicles as ‘qualifying insurance products’ – what this means is that they are products which allow for the tax deferred growth of the money in the pension. Tax is only payable upon benefit withdrawal, if any tax is payable at all. Naturally this gives your growing financial pot an extra lift, and allows for faster potential growth and ultimately, a larger retirement payout for you, in any form you wish, with no restrictions associated with a UK pension.
Offshore pensions are also global schemes – as an expatriate you can save into one pretty much wherever you live in the world, move to next, or end up living when you approach retirement. And finally, offshore retirement savings schemes such as these are often very flexible when it comes to the currency you save in. As expats work around the world and can earn their salary in any currency denomination, it’s important that they can save without being exposed to excess currency risk and also, take their pension in the income of the nation they’re retiring to.
There are many substantial financial benefits to be gained from the utilisation of an offshore pension plan clearly, but naturally you need to ensure you get the absolute correct policy for your current and future financial needs and wellbeing.
An offshore specialist and independent financial adviser will be able to help you compare the options and help you find the one that best suits your personal requirements.