A rate rise usually leads to a reduction in the Cash Equivalent Transfer Values (CETVs) of Defined Benefit pensions. As a result, many expats could see the size of their pot reduce significantly.
With experts predicting more rate rises in the future, it’s likely that you will hear us and other advisers nagging you with uncomfortable urgency to obtain a transfer calculation for your DB pension.
There are many reasons why you might consider transferring your DB pension, however this is not always the best course of action. Once you have that calculation secured, it will be guaranteed for 3 months and another sudden interest rate change can’t affect it, so you’ll have time to review your options properly before making a decision.
The rise means expats with savings in the UK should see the
interest they earn increase too. However,
an interest rate rise of 0.25% on a savings account means that for every £100
the saver has in that account, they will earn an extra 25p per year. With many regular savings accounts offering rates
of less than 1%, we are still some way off the heady
heights of 2007 when the average savings
account rate was 4.05%.
With low rates the norm for savers these days, many expats are contemplating working longer or having to revise their retirement plans. This can often lead them to taking uncomfortable risks chasing higher returns.
Thankfully as an international worker you have access to a
wide range of tax-efficient offshore investment vehicles.
Such an important decision should never be taken without receiving sound advice that considers all options and eventualities.
Find out how to preserve the value of your pension now
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