The Brexit referendum was held on 23rd June 2016. More than 43 months later, at 11.00 pm on 31st January 2020, the UK finally left the EU. What does this mean for British expats or returning Kiwis who are thinking of transferring their UK pension to New Zealand?
We first shared our thoughts about the potential ramifications of the Brexit vote on 29th June 2016. Since then, the political waters have been choppy and the feelings of both Leavers and Remainers have been shared passionately and vociferously.
How the UK’s exit from the EU could affect pension transfers to New Zealand is still something of an open book. The UK is now in a transition period (potentially lasting until 30th December 2020) to negotiate European trade deals. BBC News’ senior elections and political analyst, Peter Barnes, details the timeline in Brexit: What happens now?
Therefore, GBPensions’ view remains the same: the perception of Brexit may be worse than the reality. The British pound ended the week of 31st January close to a three-year high against the Euro following the Bank of England’s decision to keep interest rates on hold, but other global issues (such as concerns about coronavirus) which have nothing to do with Brexit can still affect currency rates.
Although we do not offer advice about foreign exchange, clients may be reassured to know that the NZ QROPS (Qualifying Recognised Overseas Pension Schemes) used by GBPensions can hold investments in Sterling. So, a transfer does not necessarily mean an immediate currency conversion. And, of course, if you choose to move your UK pension to a SIPP (Self-Invested Personal Pension) this requires no currency conversion, since it is a UK-registered product.
Reflecting on what’s occurred already and looking ahead to what may be next, GBPensions’ director Tony Chamberlain says, “Over the past three-and-a-half years we’ve had a steady stream of enquiries from people who are – quite reasonably – concerned about all the uncertainty surrounding Brexit. None of us can predict exactly what’s around the corner, but we know the world isn’t going to stop turning! Therefore, my advice is consistent: if you’re trying to decide on the most appropriate course of action for your UK pension, don’t sit and fret. Have a chat with a qualified specialist.”
“The GBPensions team can investigate and retrieve your UK pension information at no cost to you, and you’re under no obligation to proceed with us once we have,” he adds. “Only when you have all the facts at your fingertips, can you make a truly informed decision about what to do next.”
