UK Expat and EU Resident Financial Advice on UK Pensions

After Brexit, there was and still is much confusion on dealing with UK based pensions and investments when you have left the UK and indeed for those have lived and worked in the European Union, built up pensions and investments there and now live or plan to retire in the UK

We set out below our stance on financial services after Brexit and our dealings with the European Union regulators.

Brexit: If You Live Outside UK

We are a UK registered business, authorised and regulated by the Financial Conduct Authority in the United Kingdom.  We are fully insured for advice that we give from the UK to clients all over the world.   That said, we are not authorised outside the United Kingdom and as such, new products and services are usually only available for UK residents.  We are also no longer authorised in the European Union under financial services ‘passporting’ given Brexit.

That said, there are many British Expats and Foreign Nationals living all over the world that have existing pensions, investments, financial or tax interests in the UK.  Your local adviser, where you live, is unlikely to be authorised in the UK meaning they cannot advise on your existing UK interests and likewise, we are not authorised to give advice on pensions and investments in the EU.

EU Residents and Brexit

The Brexit Trade Agreement did not include financial services passporting although it was supposed to.   Negotiations are ongoing regarding ‘Equivalency’ on financial services with 5 X Memorandums of Understanding (MOUs) agreed in January 2021.  MOUs are essentially ‘agreements to reach an agreement’ only.  One of the MOU’s between UK and EU regulators confirms that they are working towards ‘delegated authority’ where if an EU resident has a UK pension/investment, then respective EU advisers are not authorised to advice on unless they have set up a UK branch with FCA authorisation in UK and therefore advice will need to be delivered by a UK authorised IFA.  This is where EU regulators delegate their authority to the UK FCA to oversee and regulate the advice on a UK pension/investment.

Given the ‘state of flux’ we are all in as negotiations continue, technically, we are no longer authorised in EU (for the time being). 

UK FCA Permissions

Please note we have written confirmation from both our professional insurers and the FCA that all advice that we offer must be offered and delivered from the UK, under FCA regulatory rules and FCA protection and that we are permitted to advise people anywhere in the World according to the UK regulator, but we must check if there are any regulatory restrictions where a client lives.  In short, we would normally offer advice as if you were resident in the UK and provided that you and your EU adviser check with your EU regulator that they are happy for us to continue UK advice for you in tandem with your local adviser ensuring tax compliance and reporting requirements with EU authorities.  We will require this in writing from your EU regulator/your EU adviser. 

EU Permissions

We do not ‘solicit’ or promote financial services to EU residents, but we will accept ‘Reverse Solicitation’ i.e.  you can approach us, without our prompt, to help you with existing UK taxes, investments, or pensions only.  We will not advise on or arrange 'new money' investments or annuities for you, but we will advise on existing UK arrangements that are then actioned/amended within the UK.  Given this, and until an agreement is reached on Equivalency and Delegated Authority, we will offer the technical advice from the UK on your existing UK pensions, investments, and tax with our requirement that you also take advice locally in the EU to oversee any actions at 'your end' to ensure tax compliance and reporting requirements with EU authorities. 

Windsor Accord:  The Windsor Accord has smoothed the way a little solving many problems with Northern Ireland and this has meant more EU regulators being open to us advising their residents on UK interests.  We have directly contacted many EU regulators and have gained their permission for residents of their country to be advised, by us,.  on existing UK interests. 

We already have permissions within the European Economic Area from Hungary, Ireland, Germany, Portugal, Spain, and Switzerland for delegated authority under FCA rules as EU regulators who have been pragmatic as they have no jurisdiction over UK pensions advice or rights anyway.  That said, we will still require you to take local advice where you live on top of anything we do for you in the UK (if anything) to make sure anything you do does not contradict local laws or create an additional tax burden where you live.  France is something of a joke at present given the number of UK expats living in France and we are still awaiting permission from Greece, Holland, Italy, Malta, Norway, Poland, and Sweden’s regulators.

France and Finland:  Fish, wine, cheese, and cars are no problem between EU and UK, but UK financial advice on UK pensions is a ‘no’ at present and you should also be aware that there are even greater restrictions for residents of France and Finland. 

• No Fishing Rights = No Finance in France, although they are softening their position to that of other EU authorities after the Windsor Accord where things appear to continue as they were with EU regulators happy that the FCA oversees any UK advice on existing UK products and services.  France will currently only let you access UK pension options that are already within your scheme rules e.g.  annuity (if it is in the scheme rules) but if flexible access drawdown is not within your existing scheme rules you cannot transfer to another UK pension provider as this would be a new UK pension contract that you cannot currently have.
• Finland’s regulator responded with a categoric “No” unless we set up a branch office in Finland and work under EU/Finnish rules which we find preposterous and not acting in the best interests of their residents with UK assets as we will not set up a branch in Finland to accommodate the two or three enquiries we receive from Finland each year.  The only way we can help is if you ask your Finnish Financial Adviser to engage our services as 3^rd party experts to be a conduit for the advice offered but you Finnish Adviser must accept all responsibility and confirm that they will take on the liability for the advice to ensure protection under Finnish Law.

Availability of UK At Retirement Pension Options for Non-UK Residents

• Annuities: Whilst legally you can buy an annuity with your UK pension fund, we are not aware of any UK annuity providers that will offer terms to a new non-UK resident.  Some pension annuity companies will offer EU residents annuities if they are existing clients, but most do not.
• Flexible Access Drawdown:  Not all UK pension providers will offer/accept UK pensions funds for flexible drawdown for new or even existing clients that are non-UK residents but happily, there are a few that do, so you do have options.
• Tax Free Cash Lump Sum:  When using flexible access drawdown, remember, just because there is usually a 25% tax free cash lump sum payable from UK pensions, this does not mean it is tax free where you live, this will depend upon the tax treaty that exists between the UK and your country of residence as well as local tax laws where you live.
• ROPS:  Transferring your UK pension fund to Europe is possible but the EU pension provider must be listed and approved in HMRC’s Recognised Overseas Pension Scheme (ROPS) list.  However, from 30^th October 2024, a 25% overseas transfer charge is applied when transferring to an EU ROPS to bring both the EU and Gibraltar in line with pension transfers overseas for non-EU countries ROPS that have had the penalty in place since 9^th April 2017.

Worth a read/watch:  Pay UK Pension Overseas USA and UK Pensions

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