The investment director of one of the world’s largest independent financial advisory, asset management and fintech organizations has predicted that UK pension holders will increasingly seek to move retirement funds overseas as fears grow about the budget in March.
The warning from James Green of the Devire Group comes ahead of Chancellor Jeremy Hunt presenting the first formal UK budget since 2021 on 15 March.
The last official budget was presented in October 2021 by Prime Minister Rishi Sunak, when he was chancellor. Since then, “a series of fearful fiscal statements” have been issued by the Treasury.
James Green says: “The UK faces at least a decade of lost economic growth amid readjustment to the post-Brexit era; weak post-pandemic recovery; a shrinking, aging and sick population; An ongoing cost of living crisis; and falling productivity and private sector investment.
“As the UK ranks lowest among the G7 countries in terms of quarterly economic growth, the country’s tax net inevitably falls as well – and this is a matter of serious concern for UK pensioners.”
He continues: “With the UK’s economic woes looming large and the urgent need to plug the financial hole, it can be reasonably assumed that the government will consider tapping into the billions held in retirement savings.
“Succeeding governments have shown that they see UK pensions as easy ‘low-hanging fruit’ that they can raid or reform whenever they see fit. Change in Not likely, especially given the scale of the issue.
“Using the inflation line, we expect the government to begin to budget over time and withhold potential taxes on allowances, benefits and limits, and pension payments.”
To cushion the hit to retirement funds that could be announced by the Chancellor in March, James Green believes UK pension holders are increasingly moving their retirement funds overseas to protect their nest eggs. Will demand to do.
When retirement funds are transferred overseas to a pension plan based outside the UK, but that still meet HM Revenue and Customs (HMRC) regulations, they are not usually subject to inheritance or income tax in the UK. .
Furthermore, after paying the initial tax on the transfer, pension holders can often take advantage of a much lower tax rate, among other benefits.
The DeVere investment director concluded: “Going post-pension politically is a difficult step as Conservatives generally do well with older voters, but the Treasury needs to strengthen the coffers.”
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