Introduction An increasing number of professionals of all nationalities have been moving and working abroad in the last decade. Whether you are a young executive or a high net worth individual with a diversified portfolio of global assets, you will have specific financial requirements and objectives. Offshore financial products and services can help you achieve financial security and provide you with the quality of life you require as an expatriate or international investor. Investing in international accounts is no longer the premise of the rich and famous; all expatriates living abroad may now enjoy flexibility, among other benefits, by investing their money overseas. The offshore financial industry has become more popular and financial institutions from around the world have entered the offshore market as a result of the high demand. There are now many providers that offer a broad range of services ranging from saving schemes to pension and retirement plans and wealth management accounts to lump sum investment products. Over the years, deVere has developed strong partnerships with some of the world’s leading investment houses and insurance companies, all of which offer some of the most competitive products in the marketplace and a high level of protection for the investor. In this guide, we provide you with essential information on effective retirement planning as an international investor or expatriate. In addition, one of our experienced financial consultants can assist you further and take you through some of the options available to you that will help you start saving for your retirement with a SIPPS plan.
WHAT ARE SIPPS? SIPPs are Self Invested Personal Pensions that allow investors to take total control of their pension funds with the added extra of greater flexibility than standard personal pensions. Different forms of SIPPs have been around since 1989, but in a change of regulations in the UK in 2006, pensions became less complex therefore making it easier for investors to decide on their own form of retirement plans. SIPPs work in the same way as any other personal or stakeholder pension in terms of tax benefits, contribution limits and retirement options. However, one of the key advantages with SIPPs is the superior choice in investments. By providing investors with a greater choice for their pension fund, the individual can potentially build a plan that will see them living comfortably through their retirement years.
HOW DOES A SIPP WORK? A SIPP is a scheme that allows individuals to have complete control over their pension savings and how their money is invested. Since regulations surrounding UK pensions changed in 2006, individuals can benefit from full tax relief on contributions based on annual income up to £130,000 per annum and basic rate tax relief thereafter up to £235,000. If you are retired or become unemployed for any reason then you can continue to invest in to your SIPP but it is limited to £3,600 a year.
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As with any pension you cannot touch funds in your SIPP until you are 50, which rises to 55 from April 2010. There is no need to purchase an annuity until you reach 75 and prior to taking an annuity your funds can be passed on to your family upon your death. Within a SIPP you will have a wider choice of investments in which to take advantage of meaning that you can build up a secure fund for your retirement. You can also transfer all existing pension entitlements into a SIPP, including those from occupational pension schemes.
WHAT AM I ABLE TO INVEST IN WITH A SIPP? The great advantage of holding a SIPP is the wide freedom and flexibility you will have in your choice of investments. You are able to invest in:
• Collective Investment Funds – Unit Trusts, Investment Trusts, Open Ended Investment | Companies (OEICs), Insurance Company Managed Funds. • Stocks and Shares – Equities, UK Gilts, Bonds and other fixed interest securities, Futures and Options, Permanent interest bearing shares.
• Cash and Deposit
• Traded Endowment Plans
In addition to the above, with a SIPP you are able to invest in commercial property which you can either lease or keep on for your own use. The purchase you make must be paid on open market terms and the maximum you can borrow is 50% of your existing SIPP fund value. The property you purchase will become an asset of the pension fund so therefore the value of it will be used to provide you with your retirement benefits. SIPPs can also give you the freedom to switch out of poorly performing investments, therefore allowing the potential for better returns.This can allow investors to adopt a more aggressive investment strategy than with other pension funds while receiving the same tax relief.
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WHAT ARE THE TAX ADVANTAGES OF A SIPP? SIPPS have the same tax benefits as all other personal pensions. For every 80p you contribute into your pension the government will add another 20p, boosting the gross contributions made by you. This tax relief is claimed on your behalf by your SIPP provider and will automatically be added to your pension fund. Anybody under the age of 75, and residing in the UK, who regularly contributes to a SIPP will qualify for this tax relief. You will be entitled to take 25% of your SIPP fund as a tax free lump sum upon your retirement. The remaining 75% must be left to provide you with your pension income. In addition prior to taking an annuity, the fund can be made available to your beneficiaries free of inheritance tax. You will also benefit from income drawdown, which means that you can avoid the requirement to purchase an annuity until you reach 75 years of age. You may also benefit from staggered or phased retirement. If you wish to choose early retirement, this will happen irrespectively of whether you remain at work or not. You will have flexibility in terms of your choice of investments.
THE BEST SOLUTION FOR YOU If you are an experienced investor or just starting out for the first time determined that you will have a comfortable retirement, investing in a SIPP can be a daunting process to begin with. The SIPP fund can be complex to set up and it will need trustees. The deVere Group is the worldâ€™s largest independent international group of consultancies who specialise in retirement planning for individual circumstances. If you would like to speak with a professional financial consultant regarding your pension, please contact us.
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About the deVere Group The deVere Group is the worldâ€™s largest independent financial consultancy group. We work with international investors and expatriates to find financial services products that suit their medium to long term requirements for investments, savings and pensions. With in excess of US$7 billion of funds under administration and management, deVere has more than fifty thousand clients in over a hundred countries. Our independence and ability to offer financial products that are tailor-made to fit an individualâ€™s needs are behind our success. As a result we now have offices in over forty countries. You can find us in Abu Dhabi, Brussels, Dubai, Geneva, Hong Kong, Johannesburg, London, Mexico, Moscow, Shanghai, Tokyo and Zurich, amongst others. The advice we provide is free and without obligation.
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The companies below are part of the deVere Group: deVere and Partners (UK) Ltd is authorised and regulated by the Financial Services Authority (469151). deVere Recruitment Ltd (503055) are an appointed representative of deVere and Partners (UK) Ltd. deVere and Partners Investment Services (Pty) Ltd is an Authorised Financial Services Provider in South Africa. deVere and Partners (Belgium) BVBA is authorised by the Banking Finance and Insurance Commission (CBFA) in Belgium and registered on the intermediaries register under number 61476, category insurance brokers. The following group of companies operates under the same license in Belgium: - deVere and Partners (Cyprus) - deVere and Partners (Belgium) Limited BVBA, succursale Luxembourg S.a.r.l. - deVere Germany GmbH
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SIPPs are Self Invested Personal Pensions that allow investors to take total control of their pension funds with the added extra of greater...