Question:
I have been living and working in London for the past 11 years and for nine of those years I have been part of my employer's pension scheme – where we both contributed 5 per cent of my salary. I'm moving back to Ireland now and will be saving into my new employer's pension scheme. I'm wondering what my options are in terms of my UK fund. Can I amalgamate it with the new scheme? I'm concerned that I could lose track of it if I just leave it where it is.
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It might be quite difficult to transfer it to your new employer’s pension scheme as the UK Revenue have quite strict rules about the type of arrangement that you can transfer benefits to.
You may be able to transfer it to a Personal Retirement Savings Account or a Personal Pension Plan here in Ireland. You may also be able to transfer it to a personal plan in the UK.
However, it is possible that you would pay higher annual charges under any of those options than you might pay if you leave it in your UK employer’s scheme.
Your UK fund is obliged to keep in contact with you and send you benefits statements annually, even if you have left employment. Once you keep your address up to date with them you shouldn’t lose track of it.
Another factor to consider in your decision is the exchange rate, and the impact future fluctuations may have on the value of your sterling pension fund against the Euro. For example, at the time of writing, £1 will get you just €1.14, compared with €1.44 in July 2015. There is a lot of uncertainty over the potential impact of Brexit on the strength of sterling, which will be of concern to anyone with a pension fund in the UK but not living there.
If you do decide to transfer your benefits to your new employer’s scheme in Ireland, you might want to do that at a time when sterling is strong and you end up with more euro in the new scheme. You should note that it can take some time for your old scheme to process the transfer, so you won’t have full control over the timing of the transaction.
In terms of next steps, I would suggest that you examine the options available to you – the scheme you are currently in will be able to confirm these options when you leave.
If you do wish to consider transferring, you should ask your new scheme if they are able to accept a transfer of your UK benefits.
If you are considering transferring to a personal plan in Ireland, you should get independent financial advice.
Have a query for our panel of experts about emigrating, life abroad or moving home? Email them to abroad@irishtimes.com. This column is a reader service and is not intended to replace professional advice.
