|Emigrating With An Armed Forces Pension|
How will emigrating to another country affect your Armed Forces Pension? Lieutenant Commander David Marsh, the Pensions Secretary of the Forces Pension Society, looks at this important issue for those leaving this country’s shores on a permanent basis...
There are a number of Armed Forces personnel who, upon discharge from the Services, elect to leave the UK and emigrate to another country for the remainder of their lives. Each individual will have their own financial requirements and commitments that need to be met in their new country of residence and, in many cases, they also have commitments remaining in the UK too (a house that is rented out to others is one common such commitment).
Moving house is traumatic at the best of times, but moving outside the United Kingdom to take up residency in a foreign land often makes the logistics of the whole affair even more dramatic. Transporting one’s furniture and other household assets abroad is, once it has left the old house in the removals van, completely out of your own hands until it arrives in your new country of residence. The process seems to ‘just happen’.
However, what about your Armed Forces pension; will the movement of that be down to the actions of others to the point where it just happens? Much of the answer to that question is “yes”, but you will have to make some arrangements yourself to assist with the smooth transition of your hard earned pension being paid into a local bank account near your new home, as opposed to your old UK bank account. The first of these actions is quite obvious – you need to open a bank account with the foreign bank where you wish your money to be transferred.
Once you have your foreign bank account up and running the next step is to transmit the details of the new bank account to Equiniti Paymaster. The best method to do this is by telephone. Call the office on 0845 121 2514, (or if you are calling from abroad: +44 1903 768 627) and request that all future payments of your Armed Forces pension be paid directly into your new overseas bank account; and that is pretty much all there is to it. You will find that you will be charged a small administration fee for the privilege by Equiniti Paymaster (currently £2.74 per month).
The exchange rate used when benefits are paid is the spot rate the agency’s clearing bank is able to obtain on the day of transfer (there’s no more Forces Fixed Rate of General Accounting Rate and its stabilising spending influences); it is all down to the money markets at the time the deal is struck.
Another small change you will notice is that your pension will probably not be credited to your foreign bank account on the same day you were used to seeing it appear in your UK bank account. This is because Equiniti Paymaster cannot account for the potential delay in your foreign bank receiving the money to be credited to your account, and the money actually appearing on your bank statement.
Some foreign banks are extremely quick at passing on the money so the delay is only a day or two longer than you were used to in UK. However, others will hang on to your money for extended periods under the pretence of “essential in-house administrative procedures” taking up the time gap, and there is little you can do about this other than complain to your new bank manager.
As soon as you move overseas (whether you have your Armed Forces Pension paid into a foreign bank account or not) you will be susceptible to having to complete ‘life certificates’ every three years. These certificates are a questionnaire that asks you to certify that you are indeed still alive and entitled to continue to have your pension paid into your bank account (UK or foreign).
It is very important you let Equiniti Paymaster know of your current home address each time you move (including back to the UK too if that should be the case) because these certificates are sent to the last address they have on your file, and if they are not returned in the stipulated period; it will be assumed that you are dead and your pension will automatically cease. Should that happen, the first thing you will know about it will be a lack of money being credited to your bank account in the usual manner.
Finally, a word on income tax. All Government pensions remain taxable in the UK, unless you are moving to Australia, Canada, The Channel Islands, Nepal, New Zealand or Southern Cyprus, in which case they are liable to be taxed by those countries’ income tax authorities - although you might be given the choice of which country taxes the asset. You should always check with the Armed Forces pension income tax office (Public Department 2 in Cardiff – Telephone 0845 3003949 or 029 20 325957) before you emigrate to ascertain the precise income tax rules in respect of your pension. It is your responsibility to ensure that you do not flout any laws – and doing so could prove very costly in the future.
If you would like to find out more about your Armed Forces pension and you are a member of the Forces Pension Society, you can do so by looking at the Society’s web site or by calling the dedicated help line on 020 7735 0110. If you are not yet a member, the cost is modest and benefits (in addition to advice from an expert) include numerous discounts on a range of useful products and services and the assurance that a dedicated organisation, independent of the Government, is there to help you get the most from your armed Forces pension.
For more information, go to www.ForcesPensionSociety.org
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