Trailing Spouses Need Pensions Too!

If you’re accompanying your partner overseas on an assignment and you’re going to be putting your own career on hold to go with them and help them settle in abroad, you must remember that by putting your partner’s interests ahead of your own you’re potentially foregoing your right to save into a very valuable pension pot.

Women in the UK are already in the position that only a third of them qualify to receive the full state pension when they retire because of years spent outside formal employment in the care of children or even sick or elderly relatives, and expatriate women are in an even worse predicament potentially as they stop National Insurance Contributions and perhaps also lose the right to a company pension as well.

There are so many ways that a so-called ‘trailing spouse’ loses out on potential onshore pension savings benefits that it’s imperative you and your partner look into how you can redress this balance with an offshore solution to your retirement savings needs.  In other words, trailing spouses need pensions too – so what are you going to do about it?  In this article we’ll discuss your options…

Depending on your set up overseas with your partner, it could be possible for them to formally employ you to look after the home and their own home interests – from caring for your children to taking on the responsibility that the move abroad is successful and positive.  If you’re in receipt of a formal and regular ‘wage’ you can assign some of this to a traditional pension type scheme abroad.  Perhaps, if you already have a qualifying personal pension in the UK with at least 50K in the pot, you could transfer this offshore into a British government backed Qualifying Recognised Overseas Pension Scheme (QROPS) and continue contributing into that.  The benefits of QROPS are discussed in a previous article.

If it’s not feasible for you to be ‘employed’ by your partner and you’re therefore not in receipt of a formal regular monthly income, perhaps your partner will agree to save a certain amount specifically for you each month.  Such savings could be placed in your name in a straightforward offshore savings account…however, such accounts are unlikely to offer you particularly attractive rates of interest at the moment.  Better still might be if they save into a longer-term scheme that’s a) more suitable for the long-term saving you need for retirement and b) more appealing in terms of the interest rate paid out and the benefits available to you for locking in cash for the long-term.

It may very well be wise for you and your partner to sit down with an expatriate financial adviser once you have moved abroad.  You can then review your changing status and examine ways that you can both make sure your financial futures are secure.  An expat financial adviser will be able to tell you how you can utilise any onshore schemes you already have in place, ways you can perhaps make the most of any pension specific rules in your new country, and they will also introduce you to all the savings and investment options you have now that you live abroad. 

By working together with your partner and an adviser you will be in the best position possible to find a solution to your own retirement savings needs.  .(JavaScript must be enabled to view this email address) if we can put you in touch with an adviser who can assist you.