Thousands of British expats are unknowingly leaving retirement savings behind, scattered across forgotten schemes, trapped in outdated investments, or sitting idle under poor performance. For many, these pension pots represent one of their largest assets, yet they often go unnoticed.
Since the UK’s auto-enrolment rules were introduced back in 2012, millions of workers have been automatically enrolled in workplace pensions, often without fully understanding them. As careers, companies, and even countries change, pensions tend to stay where they were until action is taken.
For expats, this presents a unique challenge. Multiple pensions, across various jobs, within a system they no longer live in. Some are quietly growing, while others may be drifting off course. But without regular review, you could be leaving money, and options, on the table.
A quick reality check is all it takes to understand where you stand. Do you know how your old pensions are invested? Are you aware of the fees you're paying, and whether they’re fair? Were the funds you’re invested in chosen by you, or just accepted as default? Have you tracked their performance since day one? And have you checked whether any of your pensions include valuable legacy benefits?
If you’ve hesitated to answer any of these questions, you're not alone. Many expats haven’t reviewed their pensions in years, and in some cases, even decades. But just because you haven’t looked at them lately doesn’t mean they’re irrelevant. In fact, it makes them all the more urgent.
Living outside the UK adds layers of complexity to your pensions, and with the constant changes to rules and regulations in both the UK and abroad, staying informed is essential. For many expats, it’s easy to lose contact with pension providers when the postal updates are sent to an old UK address. Without knowing where your pensions are or how they’re performing, you could be leaving money behind.
Adding to this, significant tax changes are on the horizon. From April 2027, UK pensions will form part of your estate for inheritance tax purposes. This is a game-changer for expats who thought their pensions would pass on tax-free.
Moreover, currency risk is another often-overlooked issue. Many UK pensions are still invested in sterling. If your retirement spending is planned in euros, dollars, or dirhams, exchange rate fluctuations could reduce the value of your income over time. These aren’t just theoretical risks, they are very real challenges that we help expats address every day.
Some older UK pension schemes still hold valuable features that modern pensions often don’t offer. These hidden gems can significantly enhance your retirement planning, if assessed properly.
Guaranteed Annuity Rates (GARs), for example, can offer rates far higher than what’s available today, if used wisely. Some legacy plans also offer Enhanced Tax-Free Cash, allowing you to withdraw more than the standard 25% tax-free amount. Additionally, Pension Term Assurance provides life cover with tax relief, a rare and valuable feature. If you were contracted out, your pension might even offer Guaranteed Minimum Pensions (GMP), which can be incredibly valuable.
Each of these features needs careful consideration. Depending on your goals, they could either add substantial value to your retirement strategy or be completely irrelevant. Either way, they require attention to ensure they align with your current financial plans.
Not all older pensions are hidden treasures. In fact, they can be riddled with outdated limitations that could hinder your retirement strategy. For example, many older pensions automatically "lifestyle" your investments as you approach retirement age, reducing risk without your input. While this may be smart for those buying annuities, it could be entirely wrong if you plan to keep investing or draw down flexibly.
Other pensions lack flexibility and can’t accommodate modern retirement options like phased withdrawals or beneficiary drawdown. Furthermore, if your scheme offers only a limited selection of outdated funds, you could be missing out on better global investment opportunities.
The key to unlocking the full potential of your pensions is a simple strategy: Review. Rethink. Realign.
At Skybound Wealth, we regularly help expats uncover pensions they didn’t even realise they had and identify opportunities they didn’t know they were missing. The goal is to take a part of your financial life that’s been on autopilot for years and put it back under your control. We’ll provide you with full transparency on performance, costs, benefits, and risks, because your future deserves more than crossing your fingers.
If you haven’t reviewed your pensions since moving abroad, it’s time to act. Start by reconnecting with lost providers. Consolidate your scattered pots where appropriate, and ensure your pensions are aligned with your current goals, location, and tax situation. We’ll guide you through every step of this process, ensuring it’s done clearly, carefully, and with your long-term success in mind.
As a Chartered Financial Planner, Michael has over nine years of experience in UK financial services. Throughout his career, he has worked closely with individuals and families, guiding them through important financial decisions and the complexities of pensions, investments, and savings with confidence.
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