Did you know that currently, one-fifth of British people aged 65-69 are still in employment with the government planning to increase the age limit for the state pension to 67 soon? What this means for millennials hoping to retire by their 60s is they’re either going to have to work twice as hard or inherit a fortune. While many accredit this to Brexit and a general slowdown of the UK economy, the pandemic has definitely played its part as well.
If you’re among the lucky few who have already have a pension fund in the UK and have now moved back to India, why leave your money in an economy that’s slowly grinding to a halt when you could be earning up 10.5% guaranteed interest on a fixed-interest scheme in India? That’s right, if you’ve worked in the UK and been pouring money into your pension fund over the years, you can transfer it to India through an HMRC approved scheme and benefit from one of the world’s fastest-growing share markets.
What is HMRC and why does it have to approve my pension transfer?
HMRC or Her Majesty’s Revenue and Customs is a non-ministerial department of the UK Government responsible for the collection of taxes, and the payment of different forms of state support like pensions. The good news is that UK pension funds can be transferred to India through approved schemes without incurring any penalties. You also avoid a 45% death tax when you transfer your pension to India meaning all your money goes to your next of kin instead of 45% going to the State.
How will I know if a particular scheme is actually HMRC approved, can I check the HMRC website?
Unfortunately, the HMRC website is a bit misleading in this aspect since even though they have provided a list of schemes that claim to be compliant, the fine print says they leave the responsibility of checking for compliance to us. What this means is HMRC will only check to see if the scheme is compliant post-application, by when it is usually too late to make any changes. This is one of the major factors behind a high rejection rate for Indian applications. Contact us for detailed information on HMRC compliance and guidelines.