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How to Transfer UK Pension to New Zealand

Dan Ward

Fact Checked

If you want to know about pension transfers to New Zealand, all you need to get started are the details of your existing UK scheme. However, it is important to know your options and the potential benefits and risks of bringing your pension with you or leaving it in the UK.

Find out more about whether and how to transfer UK pensions to New Zealand, and which overseas pension scheme could be the right solution for you.

Also consider reading: How to transfer a UK pension to Australia as an expat

Looking to transfer your UK pension?

Speak to me, Dan Ward, about transferring your UK pension to New Zealand.

Where do I begin in moving my UK pension to New Zealand?

First and foremost you will need to have your existing pension information to hand. I can then collate this for you, handling all the paperwork. I will also take care of all of the following requirements I’ve outlined in the checklist below:

Checklist for transferring a UK pension to New Zealand

  • Collate existing UK pensions
  • Request a CETV (Cash Equivalent Transfer Value)
  • Conduct a cost and performance comparison
  • Identify the best solution in New Zealand
  • Submit transfer request documentation to the existing and new provider

UK Pension Transfers

It is essential to seek appropriately qualified advice before transferring your UK pension to an overseas pension scheme in New Zealand, and not only because of all the paperwork above.

If you fail to do so, your retirement savings, likely one of your most significant assets, are at risk if something goes wrong when transferring funds.

Most UK advisers lack the additional licenses required to safely and legally help with UK pension transfers overseas.

I am authorised to advise you on all aspects of your pension transfer to New Zealand and have years of expertise and experience with UK pension transfers worldwide.

Whether you are a New Zealand national seeking to bring your retirement savings home after working in the UK or a British ex-pat retiring abroad, you can always speak to me about a UK pension transfer.

Your current UK pension scheme

To begin with, verify which type of UK pension you currently have.

You may have more than one UK pension scheme from various workplaces or a personal plan such as a stakeholder or self-invested personal pension.

Many of these UK pension schemes allow you to access your money at the normal minimum pension age, which is ten years below the UK state pension age. The retirement age is rising and depends on your date of birth, so, for example, if you will become eligible for the state pension at age 67, then you can access your occupational or personal pension funds from age 57.

Most also permit earlier access to your pension in the event of serious ill health.

I’ll briefly explain the most common types of UK pensions you may have.

Workplace Pensions

If you had an employer at any time in the UK since 2012, they should have automatically enrolled you on a workplace pension scheme.

You may have opted out of this kind of UK pension plan. If so, then you risked missing out on your employer’s contributions.

Most occupational UK pension plans are defined benefit or contribution schemes.

Your contributions in both cases are eligible for tax relief at your marginal rate of UK income tax.

Defined Benefit Scheme

A defined benefit scheme (DB), or a ‘final salary scheme’, is the most common UK scheme within the public sector. Rarely some large private sector employers also provide this pension scheme.

A DB UK pension guarantees you a retirement income with inflation-linked increases. This income will be paid similarly to your salary.

Pension accrual, which is how this guaranteed income increases, occurs when you remain in the same employment over time rather than solely through the investment growth of your pension funds.

Your defined benefit scheme may also include spouse or dependent pensions.

Therefore, when it is a DB scheme, transferring your UK pension to New Zealand may not be possible or prudent as these benefits are hard to replicate.

If this applies to you, speak to a local UK financial adviser or the pension manager at work in the first instance.

Defined Contribution Scheme

The most common form of workplace pension scheme you’re likely to have as an employee in the private sector is a defined contribution (DC) plan.

Unlike defined benefit schemes that are generally unfunded, this type of UK pension allows you to grow your pension fund.

Your contributions are generally deducted from your salary before tax and are topped up or matched by your employer.

The scheme provider then invests the general pension funds that your personal pot sits within, and its subsequent investment performance significantly influences your eventual retirement income.

This kind of UK pension scheme usually has a restricted range of investment options.

DC plans are usually eligible for UK pension transfer to an overseas scheme in New Zealand.

Contact me if you want to discuss whether moving this type of pension to New Zealand is a good idea in your circumstances.

Small Self-Administered Schemes SSAS

Unlike most UK pension schemes, with an SSAS, there is usually no pension provider.

Instead, up to eleven participants become trustees of the pension fund. They can invest it in a far more comprehensive range of investments than is available with a standard UK pension scheme.

Only company directors and senior directors of private firms can participate in an SSAS.

Personal Pension

A personal pension is one you open independently of any workplace, for example, if you are self-employed.

This type of UK pension is a DC scheme, as described above, and is also often known as a ‘money purchase scheme’.

Your contributions are eligible for tax relief the pension scheme provider claims on your behalf, thus topping up everything you add.

The scheme provider invests the pension funds on your behalf, and your pot’s ultimate value depends on how much money you have paid in and how well the investments have performed.

Some of these plans force you to purchase an annuity out of your pot in return for a guaranteed income, while others give you a choice to draw down either regularly or ad hoc.

Two of the most common types of personal pensions are stakeholder and self-invested personal pension plans (SIPPs).

Stakeholder Pension

A stakeholder scheme is a low-cost and low-risk pension, with fees statutorily capped at 1% to 1.5%.

You should get an annual statement summarising how well your pot is performing.

There are more significant opportunities for investment growth when you take advantage of the free transfer option guaranteed with every stakeholder plan and move it into a SIPP.

A SIPP can also make moving your UK pension to New Zealand much easier when the time comes.

Self-Invested Personal Pension Plan, SIPP

If you haven’t already, you might consider consolidating various of your existing pensions by transferring them into a SIPP.

The investment options with a SIPP are far broader than with the other forms of UK pension funds, and you can choose between them based on your unique goals and appetite for risk.

This potential for more remarkable investment growth also comes with more enhanced flexibility and control over how and when you draw down your funds than any standard pension can offer.

There is no obligation to purchase an annuity, and your contributions are eligible for UK tax relief like other pensions.

The Financial Conduct Authority regulates all SIPPs, and only UK providers who are also FCA-regulated can offer them, giving you complete peace of mind.

Transferring your UK pension to New Zealand can be much more straightforward with a SIPP, which you can later easily convert into its international counterpart, the iSIPP.

Looking to transfer your UK pension?

Speak to me, Dan Ward, about transferring your UK pension to New Zealand.

Choosing a New Zealand Overseas Pension Scheme

You don’t have to transfer your UK pension to New Zealand when you move.

You can always leave your retirement funds with your existing UK provider and use the direct payment method to receive the benefits in a local bank account.

However, suppose you decide against a pension transfer. You must factor in additional costs associated with the exchange rate, as you will convert your pension benefits from GBP to the New Zealand dollar every time.

Two main options exist for transferring your UK pension funds to New Zealand. You can do so to a qualifying recognised pension scheme (QROPS) New Zealand superannuation scheme or an international SIPP.

With a QROPS, you can denominate the New Zealand dollar as your currency, so there will be no fluctuating exchange rates to worry about. This option isn’t available with an iSIPP but you could choose the Australian dollar instead.

Both allow you to take a tax-free lump sum of up to 25% of the fund value at the commencement of the pension while you are still a UK tax resident.

However, your iSIPP will remain in the UK, while your QROPS is based in New Zealand.

Depending on when you become a tax resident, you can sometimes trigger an overseas transfer charge when transferring UK pension funds to a New Zealand QROPS scheme. I will explain more about this below.

As ever, you must speak with an authorised adviser like me before attempting to transfer your UK pension to New Zealand. I always keep any unavoidable tax charge to its absolute minimum.

International Self-Invested Personal Pension, iSIPP

The transfer process of moving UK pension funds into an international SIPP (iSIPP) compares favourably with a New Zealand QROPS in terms of generally being quicker, smoother and cheaper.

An iSIPP is precisely the same as the UK version and is an excellent choice if you want to keep all your options open, such as by returning to live in the UK at some point or moving elsewhere in the world.

Your pension funds remain in the UK, where they continue to grow under the regulation of the FCA.

If you transfer your UK pension to an iSIPP, its income is taxable as standard in New Zealand, meaning you will pay tax on withdrawals at your prevailing rate.

You can always ask me for tax advice. I can explain how your New Zealand or UK tax liability with an iSIPP compares with a QROPS for your unique situation.

Qualifying Recognised Overseas Pension Schemes, QROPS

New Zealand QROPS abide by the strict rules of His Majesty’s Revenue and Customs (HMRC) to safely accept transfers of UK pension funds into a superannuation scheme.

Please verify that any scheme you are considering is on the New Zealand approved QROPS list on the HMRC website. Otherwise, if you transfer your UK pension to a scheme provider who is not on the list, you could be hit with a severe tax penalty.

Once you become a New Zealand tax resident, there is a four-year transfer window to a QROPS. When this exemption period expires, you must pay the overseas transfer charge (OTC) of 25% of the original transfer value unless or until New Zealand decides to alter these rules.

You will also have to pay the OTC if you transfer your pension to a QROPS while still a UK tax resident.

The QROPS transfer process can become quite convoluted and complex. If you decide this is the safest and most suitable way forward for you, I can handle all the paperwork and ensure the transition fully complies with every rule and regulation.

Looking to transfer your UK pension?

Speak to me, Dan Ward, about transferring your UK pension to New Zealand.

How to transfer UK pension to New Zealand FAQs

How to transfer UK pension to New Zealand?

Your choice is between a New Zealand QROPS or an international SIPP.

Contact me if you’re wondering which is best for your circumstances.

What happens to my UK state pension if I move to New Zealand?

If you are entitled to a state pension, it is not transferable. Yet you can still receive your United Kingdom benefits via the direct payment method into your New Zealand bank account.

You will incur some costs associated with the exchange rate between the two currencies.


Please note

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.

Overseas pension transfers can be complex. Make sure you take financial advice before you transfer your funds.

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