QROPS Explained: What You Need To Know

QROPS explained looks at pension plans and what your options are with QROPS.

A pension plan is one way to save today’s income for a better tomorrow. Click To Tweet

Whether you contribute to the pension plan or your employer pays the whole amount, it all narrows down to the type of plan.

Pension plans are sponsored by employers for the benefit of their employees. To know ‘what is a pension plan,’ it is important that you understand the differ types of plans.

We’ve prepared an article with all the details about QROPS in South Africa. It will help you to have a better understanding on your pension planning.

The Function Of Pension Plans, QROPS Explained

The function of pension plans don’t vary. It’s a means through which the employer provides a tax-deferred amount that has been put away from the employee’s benefit. There are two groups of pension plans.

The first is defined benefit. This plan offers the employees specific benefits are retirement, regardless of the industry’s profitability.

The amount is calculated based on years of service, annual salary of the employee, and retirement age.

Pension Plan

The Time Frame Of Pension Plans

What amount of time do you need to work for vesting?

Vesting gives you the rights to the benefits. Some pension plans allow immediate vesting; therefore, any money that is put aside for you is definitely yours at retirement.

Some companies have a vesting schedule that allows ownership of certain percentages for every year a member works.

For the 401(k) plan, the money you invest is your but company has matching vesting schedule. Click To Tweet

QROPS Explained: Important Considerations

It is important that you inquire about the pension plan before accepting a position. The pension is part of your compensation plan considering the fact that it’s the money that the company puts away.

Note that pay for the two companies is the same but one of them has a pension. Actually, they pay more.

For defined contribution plans like 401(k), it is important to see if the company offering it can make a match. If they offer a match then you should consider participating in the plan.

Since the money is tax-free, individuals in the 25% tax category only have a difference of $7.5 in their paychecks if they invest $10. If there is a state income tax then the difference will be less.

BONUS: CLICK HERE to get extra insights about the benefits of transferring a UK Pension to a QROPS.

The Benefits From A Pension Plan

You should reap the benefits of a pension plan even from the smallest of companies.

While small companies offer pension plans with different names, the benefits are the same.

Since the company is small, simplified pension plans low plan fees and make it easier to create pension plans for the people.

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How To Plan Your Pension

Financial security during retirement is something that needs planning, commitment and money. Click To Tweet

Saving money for retirement is something that we can live with.

You can aways get professional help with UK pension planning from a specialist.

Always remember that saving matters. Here are tips on how to plan your pension:

Start Saving For Your Pension & Stick To Your Goals

Whether you are saving for retirement or something else, it’s a good thing and you should keep doing that.

Saving is a rewarding habit. If you’ve not been saving them it’s time to get started. Well, you can start small and increase the amount you save every year.

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Remember that the sooner you pick up this habit, the more time you will get time to save more money.

You should make saving for your retirement a priority. Come up with a plan and stick to it.

Always remember that it’s never too late to start saving.

Are you wondering what does a QROPS Brexit mean For UK Expats in South Africa?

Your Retirement Needs

There’s nothing as expensive as retirement. Click To Tweet

According to experts, you will need at least 70% of your pre-retirement income to maintain your living standards during your retirement years.

You should be responsible for your financial future.

You need to plan ahead.

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BONUS: CLICK HERE to get extra insights about the benefits of transferring a UK Pension to a QROPS.

Sign Up With Your Employer’s Retirement Savings Plan

It is important that you sign up with savings plan such as 401(k) and contribute the much you can. Click To Tweet

Your taxes will reduce, and with automated deductions, everything is perfect. Over time, tax deferrals and compound interest makes a huge difference in the amount you accumulate.

Ensure that you do more research about your plan. For example, how long are you required to stay in the pension plan before getting your money?

Learn How Employer’s Pension Plan Works

Check to see if you are fully covered in your employer’s pension plan. Find out your benefit worth by asking for your individual benefits statement.

You should also find out what happens when you change jobs. Find out about the benefits you may have from your previous employer.

You also need to find out if you are a beneficiary of your spouse’s pension plan.

Learn The Basic Principles Of Pension Investment

The types of investments and inflation have an impact on how much you will have accumulated at retirement.

You should know how your pension fund is invested. Ask questions about the investment options you have been provide with and put your money in different investments.

This way, you will be able to reduce the risk and improve your return. Your investment options will certainly change depending of factors such as financial circumstances, goals and age.

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Always remember that knowledge and security go hand in hand. Click To Tweet

Follow these tips on how to plan your pension to get started.

BONUS: CLICK HERE to get extra insights about the benefits of transferring a UK Pension to a QROPS.

Pension Planning For UK Citizens Living In South Africa

South Africa has more than 200,000 UK expats, drawn by warm climate, low cost of living, amazing wildlife, beautiful beaches and opportunities for outdoor lifestyle.

There are more than 38,000 UK citizens in South Africa who are drawing a UK state pension.

Most popular cities for British expats are Johannesburg and Cape Town. Here are tips for pension planning for UK citizens living in South Africa.

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What You Need To Know Before Moving To South Africa

You can visit the country for a maximum of 90 days without a visa. During that time, you will be required to prove that you can support yourself.

You will need to show pay slips or bank statements. This is part of pension planning for UK citizens living in South Africa.

If you are planning to stay longer then you will need to apply for a visa.

You will first of all need a temporary resident permit and when you are living in South Africa you can apply for permit for permanent of residency.

For people who are planning to work in the country, four different permits are required.

An exceptional skills permit is valid for three years whereas a general work permit lasts for the entire length of the contract.

Intra-company transfer permits last for two years. If you meet the criteria, you will need to pay £125.

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If you are working in the country, but being paid by an employer overseas, you will need a business visitor’s visa, not a work permit.

If you are retiring or already retired in South Africa then you will need a retirement permit which costs £35 ad last for four years.

You will also need a radiological report, police clearance, money equivalent to the airfare to your home country.

To apply for a retire person’s visa, you will need to have assets worth £1,420. Click To Tweet

While it’s possible to claim your UK pension, it will not be updated every year going by inflation whereas QROPS will likely offer better growth.

Don’t miss our in depth article about QNUPS. It will give you all the details you need to know to make an informed decision for your future pension plans.

Our Guide When You Get To South Africa

Arrival At The Airport

Flights from the United Kingdom arrive in different South Africa airports, but the most popular airports are Cape Town and Johannesburg.

Local Currency

The South African Rand is divided into 100 cents.

How To Spot A Cab

A can in South Africa can mean one of these two things: A mini bus cab or a metered cab.

For a metered cab, you will need to make a call but if you hail a cab, it will be a mini bus which drops off passengers on the way.

Price Of A Hotel Room

Hotels.com set the average price of a hotel room in South Africa at £114.

BONUS: CLICK HERE to get extra insights about the benefits of transferring a UK Pension to a QROPS.

There are many decisions you have to make when approaching retirement. Click To Tweet

If you are not in a pension scheme that pays you a certain amount of money based on your salary after you’ve retired, you are most likely in a pension scheme that provides you with a lump sum of money based on what you have saved.

To help you have a better understanding on all the options that are available to you, we’ve prepared a detailed article with all you need to know about QNUPS. Make sure you don’t miss it.

You have to decide how you are going to use the money you have saved to provide an income once you retire. You must know where to get help with your pension planning.

While there are many options available, deciding which one is best for you is not easy. There are few questions that you need to ask yourself.

For example, can you afford retirement? How much will collect for your pension?

Rules For Accessing Your Pension Fund

Not long ago, once you had claimed your tax free cash from your pension savings or pension pot, you were supposed to use the remaining amount to buy an annuity that would guarantee you income till death.

However, new rules that were implemented in April 2015 mean that if you are 55 years an above, you can use your pension pot in any way to see fit.

More freedom definitely comes with more freedom and many people are seeking advice from professionals.

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Whether you have taken financial advice or not, this is the right time to do it. Seeking financial advice is the best financial decision you can make.

Get Help With Pension Planning

Before you speak to a financial advisor, you can take up free pension guidance sessions with Pension Wise. Click To Tweet

This free government service will provide you with the right information you need to know regarding what you can do with your pension savings and tax implications of different options that are available to you.

One of the many free advices we’ve prepared for you is our in depth article about the benefits of QROPS Johannesburg. Make sure you don’t miss it.

This information will help you understand more about your current financial situation.

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QROPS Explained: The Type Of QROPS Pension Advice You’ll Get

If you choose to take financial advice, it is important to know what type of service you will get. This is because not all types of advice will give you the level of protect you need.

There is a lot of information about retirement products, but the reality is that this may not be personalized advice.

An advisor offering personalized financial advice will take you through the process of collecting the necessary information about you.

They use this information too asses the circumstance and provide you with the best recommendation about what they believe is good for you.

The Financial Advisers will recommend the most suitable action for you. Click To Tweet

BONUS: CLICK HERE to get extra insights about the benefits of transferring a UK Pension to a QROPS.

The key to find one is working out what kind of advice you need.

For example, you could be looking for advice with investing into stocks, share ISA or pension.

Are you about to retire? Are you looking for life insurance or mortgage?

There are many reasons as to why people need the advice of financial adviser, but there are also different types of advisors; therefore, it is important to know when and who to go to.

All this is covered on this elementary guide on how to choose a financial advisor

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QROPS Explained: Tips On How To Choose A QROPS Financial Advisor

One way to get a financial advisor is through recommendations from family and friends. Click To Tweet

Unfortunately, it is not easy to know whether the advisor did a good job until time has pass after they have given the advice.

Remember that being nice doesn’t mean that the financial advisor is good.

Some pension schemes and affinity groups recommend financial advisors to the members. Therefore, if you are member of one group, you should check with them.

Types Of QROPS Financial Advisors

There are different types of financial advisors and sometimes, they are named by their area of specialization such as pension advisor, investment advisor, financial planner or mortgage advisor-and when dealing with products like scar and home insurance, they are often referred to as brokers.

Many financial advisors will tell you about the many benefits of QROPS Cape Town that you can take advantage off. Make sure you are informed.

Whatever they call themselves or they might be called, what’s common among financial advisors in the UK is that they are regulated by Financial Conduct Authority (FCA). They are required to abide by the rules of the body.

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Advisers who deal with pensions; investment; general financial planning and retirement income products such as annuities may also provide advice on life insurance and sometimes mortgage.

Most financial advisors will advise you on all aspect of financial planning. Click To Tweet

Advisors who deal with equity release and mortgages are required to have specific mortgage qualifications. Advisors in this category can be paid by common on any equity release or mortgage product they sell.

Some mortgage advisors offer advice on protection insurance (such as life insurance). Some mortgage advisers are tied to one lender. This means that an advisor that offers whole market service is the best choice.

Advisors who deal with general insurance products such as travel, car and home insurance are widely known as insurance brokers. They are paid on commission but don’t charge any addition fee. These advisers will shop around for you to ensure that you get the best deal in the market.

Make sure that you are getting sound advice, we recommend getting in contact with an advisor who is qualified with experience in UK pension legislation and is able to explain QROPS to you.

BONUS: CLICK HERE to get extra insights about the benefits of transferring a UK Pension to a QROPS.