Expats in Thailand see moving to a country with an easy lifestyle, lots of sunshine and a low cost of living as a smart move.
But it’s even smarter if expats have secured their pension by switching to a tax-efficient Qualifying Recognised Overseas Pension Scheme (QROPS).
And there’s probably not a better time to think about moving to a QROPS.
Britain’s top companies listed on the FTSE350 are rushing to pay off retirement savers with final salary pensions.
Some savers report companies are offering them huge cash bonanzas of up to 30 times their projected pension earnings to leave.
Tax efficient pensions for Thai expats
With final salary pensions in such a mess in the UK, even though they offer a guaranteed pension income based on final salary and length of service, that guarantee does not mean the fund will pay that amount in the future.
The British Home Stores scheme has already sunk into government protection this year, leaving retirement savers who have not yet drawn their pensions losing 10% of their promised benefits and seeing a cap on annual payments.
While FTSE350 final salary pensions have a combined deficit of £900 billion, the inevitability is more schemes will follow BHS.
Expats in Thailand should not worry that the country does not have a QROPS provider.
A qualified and experienced international IFA can recommend QROPS that offer a 30% tax-free lump sum, flexible access along the UK model and pay outs without tax deducted in one of several major currencies.
Making a smart move smarter
These features are on top of tax, estate planning and investment opportunities that are unavailable to UK retirement savers.
Looking at how a QROPS can make that smart move even smarter makes sense to British expats in Thailand.
Many will have final salary pensions with struggling oil and gas companies which are tackling drastic falls in profits and investments. These companies have an uncertain future after scrapping drilling operations and axing tens of thousands of workers.
Moving the cash into a pension under personal control rather than leaving the fund with an employer who makes financial decisions that are good for shareholders rather than their workers is another reason why a QROPS should be on that financial shopping list.