Expat With UK Pension, Providers Getting Nervous
Published / Last Updated on 01/09/2021
If you are a UK resident with a UK pension there are usually little or no issues in finding an annuity provider or flexible drawdown provider to plan for your retirement income.
If you are an expat or foreign national living overseas with UK pensions, things may not be as easy for you. Before Brexit, whilst there were many UK pension providers that would not accept your business or would only accept your business only with a UK adviser involved, there was generally not too much difficulty in helping expats and foreign nationals.
Brexit has pushed this to another level. Whilst there is a trade agreement between the UK and EU, it did not include financial services. Negotiations are still ongoing with only Memorandums of Understanding (MOUs) in place. I.e. agreements to cooperate and try and reach an agreement. Even now, in September 2021, there is still no agreement. Many EU countries have adopted a position that if it is a UK pension, then a UK adviser can deal with this with the EU country in question delegating authority to the UK’s Financial Conduct Authority (FCA). Other members states have not and will only allow you to do things if it is written within the existing contract. If the contract is changed or you try to transfer to a new pension, then technically this is a new contract between the client/adviser/pension provider and is not currently permitted. So the position in Europe is clear as much.
Given the above, a number of pension providers have started to rethink whether they will offer annuities or flexible drawdown to expats in non-EU countries. Whilst this may be permitted under local rules or an intergovernmental agreement between the UK and other country, there are now pension providers that used to accept expats that are starting to withdraw these options. Currently, we have found no annuity providers that will offer terms to expats and only a handful of UK pension providers that will offer flexible drawdown.
Not all have done withdrawn, so there are still good flexible pension drawdown choices to be had with competitive firms but all this movement on cross border investment is shrinking the market.
Our conclusion is that if you are over 55, living overseas and have a UK pension, you may wish to take advice and get your retirement contract in place sooner rather than later.
