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Should you move your British Pension Plan(s) to Canada?

A free independent guide from Pension to Canada

Pension to Canada Transferring your UK pension to Canada made simple

Moving to Canada is a huge life change – and there are lots of things to sort out in what can be a frantic period before you move: where am I going to live? Where are my children going to go to school? What are we going to do for a living? How are we going to move our belongings?

There are some money issues that most people consider: We think to transfer our bank accounts, we try to get good exchange rates for money transfers but have you thought about your pension? Probably not, because after all it is sitting in a pension plan (or several different pension plans) just idling away waiting for you to retire. But did you know you can transfer your UK pensions to Canada? There are many things to consider when transferring any pension so good financial advice from people who fully understand UK pensions should always be sought.

Can anyone move any pension to Canada?

Any Canadian permanent resident or citizen can move any UK company or private pension to Canada as long as you have not drawn benefits from it already. Your pension benefits can only be transferred to a plan which is recognized by HMRC as a qualifying recognized overseas pension scheme (QROPS). A financial institution must apply to have QROPS status. Currently 30 Canadian institutions have QROPS status. Pension to Canada have independent registered financial advisors in Canada who are able to recommend the best QROPS for you.

Why move my UK pension to Canada?

1. Access

When you transfer your pension to Canada 30% can be invested into an Registered Retirement Savings Plan (RRSP). You have full access to funds held in an RRSP at any time and any age.*

*Any money withdrawn is generally subject to withholding tax. The amount depends on the amount withdrawn and there are different percentages for Quebec. Please contact us to understand your personal situation.

2. Reduce Currency Mark Risk

As a Canadian resident, it is likely you will need Canadian Dollars in retirement, transferring your pension to Canada will protect you from changes in the currency markets.

3. Organization and Planning

You may have more than one pension plan in the UK. When you transfer them they can all go into the same Registered Retirement Savings Plan (RRSP) and Locked In Retirement Account (LIRA), which will simplify keeping track of your personal finances and make it easier for you to plan for your future

4. Investment Advice

“The very best performing pension fund could produce more than three times the income of the worst performing one. The really bad news is that your pension fund is more likely to be amongst the bad than the good.� UK Observer, Sunday 23rd October 2005

By moving your pension to Canada you can benefit from independent financial advice to ensure your retirement provisions are working efficiently

5. Protect your family

The Canadian pension system is very different to the UK and can offer substantial advantages on death. In Canada your surviving spouse receives 100% of your retirement fund and if there is no surviving spouse, your children or other beneficiaries receive the full after-tax value. In the UK death benefits vary and depend on the type of pension you have.

Considerations ahead of a transfer

UK Pensions are complex and the rules and regulations are subject to constant change (the most recent regulatory changes were implemented as recently as 6 th April 2011) The nuances of UK pensions are easy to overlook. It is important to get the right advice to ensure the transfer is in your best interest. Pensions to Canada always produce an advice report before transferring your pension. Pensions to Canada allocate you a specific UK-based advisor with an Advanced-level UK Pension qualification

What about tax?

Their are no tax implications on either the UK or Canada side associated with your UK pension transfer. Pension to Canada can connect you or whoever completes your tax return with a specialist to help with your tax return the year you complete your transfer. Withholding tax may be payable when you draw benefits from your Registered Retirement Savings Plan (RRSP) and special care needs to be taken if you have been resident in Canada less than 5 years. Contact us for a free consultation to understand your personal situation.

Can I continue to make retirement contributions?

You can continue to make contributions to your Registered Retirement Savings Plan as long as you stay within your “contribution room.� Your UK pension transfer does not use up any of your contribution room. The Canadian Revenue Agency have information on current contribution room limits.

To find out if transferring your UK pension is right for you or to find out more about your personal circumstances contact Pension to Canada today. Pension to Canda e: t: 1-800-670-8172 w: Legal disclaimer The information contained within this document is of a general nature and cannot be relied upon as, nor be a substitute for professional advice. The benefits and information vary according to residency and domicile. No liability will or can be accepted fro any consequences arising from any transactions embarked upon in connection with this information. Nor is the information contained in this document a solicitation to enter into such an arrangement, or does it constitute investment or financial advice. Pension and investment rules can be complex and you should always seek professional advice before entering into any such agreement.

Should you move your British Pension Plans to Canada  

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