Unlike a private pension (or workplace pension) that is an accumulation of contributions from you through your salary (and sometimes your employer), the UK state pension is a fixed amount that you may or may not be entitled to. While private pensions are accessible by the age of 55, you need to be 66 to access your state pension. Additionally, there are plans in place to increase the state pension age to 67 by 2026-28, and 68 by 2044-46. Now if you reached state pension age before 2016, and you are eligible, you get about £221.20 a week from the government. While this amount is relatively generous compared to median earnings and compared to previous years, if you don’t also have a private pension to supplement your income, you could be in trouble.
Now to be clear, if you’ve lived your whole life like a Spartan and don’t care about creature comforts and expensive things, you’d probably get by on £221.20 a week. That being said, however, a recent study suggests that middle and high earners who do not have a private pension plan, would see a significant drop in their standard of living post retirement. This is why there have been a number of efforts by the government, including automatic enrollment, to increase participation in private or workplace pensions. What’s even scarier is a number of recent reports that suggest the UK State Pension is unsustainable. This is already evident from the plans to increase the State Pension age to 67 and 68 but delaying the inevitable for a year or two is not going to solve this problem.
In a recent list of reforms for the UK Pension system dubbed “The Big Bang,” the UK government claims to be looking into ways to transform the fragmented landscape of the UK pension fund sector which is estimated to be worth about £2 Trillion. While we at qropsdirect.in have been yelling it from the rooftop for years, the UK government has finally accepted that UK pension funds are not being used to their full potential. Instead of stagnating in an economy that is less than ideal, the government aims to channel these pension resources to “high-growth” companies in the UK, in order to maximize their investment potential. If you’ve lived and worked in the UK, and have since moved back or are planning to move back to India, why not invest your pension in one of the fastest growing economies in the world?
QROPS FAQs
What kind of investment opportunities can I expect when I transfer my pension to India?
At QROPSdirect.in, we have been helping people transfer their pensions from the UK to India since 2008, to the tune of over 2.5 billion INR. In addition to fixed-income instruments where interest rates go up to 10.5% and returns are guaranteed, you are also free to invest your pension in equity where returns aren’t guaranteed but there is no cap on the rewards. Investors looking to invest through a QROPS can invest in equity funds such as Large Cap, Prime Equity & Flexi Cap funds.
Does it cost anything to transfer my pension fund from the UK to India?
Not only is the transfer of pension funds to approved pension schemes in India tax-free, but you also nullify any loss that would potentially be incurred due to currency exchange rates and similar complications.
How long does it take?
While a number of websites claim it can take up to 6 months, the team of financial advisors at qropsdirect.in can get the job done in 30 days!