Offshore Pensions and Saving for Retirement

Offshore pensions are a fantastic retirement saving solution simply because the vast majority of them are so flexible offering an expatriate or an international citizen the chance to save when and how much they like and also draw down the benefits prior to retirement.

For expatriates who are living abroad on a high paying work assignment currently, an offshore pension provides a means to save hard and to save lump sums today so that worrying about affording retirement can be all but forgotten about tomorrow!  In this article we’ll look at offshore pensions and saving for retirement in general when you’re living or working abroad.

As an expatriate you’re in a unique situation when it comes to saving and investing - you are living and working in a country or countries that are different from that of your birth and your citizenship – now this presents many exciting opportunities but it also presents many challenges as well, especially when it comes to saving for retirement.  On the plus side you can access offshore options, on the negative side you may already have been saving into a pension ‘back home’ before you moved abroad and be concerned about what to do with it…

Know for a start that surrendering or cashing in a pension is seldom the best option for you – if you find you’re no longer eligible to save into a domestic pension plan then it may be advisable for you to leave it frozen – you need to determine the best approach with professional advice.

The other issue that many expats face is that they are not going to be eligible for the state pension (if it even exists when they retire) because they are not paying into the social security pot when they are abroad.  This all flags up the need for such an individual to get a decent retirement savings plan in place today...which is quite often when offshore pensions come in to play. 

As stated, these are highly flexible savings plans that are often tax attractive, that offer portability, sometimes tax efficiency, the ability to save irregular amounts at irregular intervals and even save small amounts, they offer you accessibility to your money, they allow you to save lump sums and you can set up a plan so it allows for automatic saving each month meaning that it is simple to administer. 

Additionally, you can potentially benefit from tax deferred growth from an offshore pension to the point that you defer it until no tax is payable depending on your circumstances – and what’s more, you can have a scheme where there are no minimum or maximum deposit commitments meaning you can save intensively today if you’re earning well and even take a payment holiday if you decide you want to go travelling for a few months. 

Offshore pensions can be contributed into no matter where you live and the benefits can be enjoyed no matter where you retire.  Depending on the plan you choose, you can often access the funds in your offshore pension prior to ‘normal’ retirement age and an offshore pension can be selected to suit your risk profile.  Because offshore fund managers are far freer to choose how and where and when they invest, an offshore pension can also be selected according to the underlying assets or instruments or commodities it is invested in which suits those who like a lot of control over their investments.

As you can see, offshore pensions truly embody flexibility when it comes to offshore investment and saving for retirement.  To determine whether an offshore pension is right for you, to find out about tax deferred growth and whether you will benefit and to generally learn more about your own personal options when it comes to saving for retirement you are best advised to speak to a financial adviser.

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