Where do you see yourself when you retire? Will you be travelling the world? Hitting the golf course? Relaxing by the beach in warmer climes? Maybe you won’t every fully stop working and continue in a part-time or consultancy role. Whatever lifestyle you choose to have, ensuring your wealth is sufficient to sustain you is vitally important. Our Wealth Advisers can help you both build towards retirement and manage those finances in the future, meaning you can enjoy life without financial stress.
Depending on your country of residence, you may not receive the same pension benefits from your employer as you would in your home country. For example, in the Middle East, it is uncommon for employers to offer workplace schemes. This means that most expats have to taken ownership of their savings and plan how they will fund their retirement. The thought of planning for yourself can sometimes be overwhelming and complex, particularly if you had always expected to rely on a pension. At Argentum Private Wealth, we can help you with this process by listening to your goals and talking you through how best to achieve them.
Imagine earning an income every month without having to go to work. Doing this means you have achieved Financial Independence. You have planned successfully for your future and now your wealth is invested into assets which provide you with a ‘passive income’. This could be from pension income, rental income, dividend yields, or fixed income and interest-bearing securities. Working with your Wealth Adviser, you can start on the road to Financial Independence and, once arrived, plan how to invest your accumulated wealth. The road to Financial Independence often takes time to travel, and can be difficult to navigate without professional advice, but the sooner you start the sooner you can reach your destination.
For many people, wealth accumulation is their primary focus in the early years of investing. Wealth accumulation means not just saving some of your monthly earnings in a regular manner, but investing them so that they can also grow for you. We will help you put a strategy in place for your monthly investments, aligned to your risk profile, so that you can learn the value of growing your savings and benefitting from compounding returns. You work hard to earn your money, it’s time your money started working hard for you.
Perhaps you have been saving for several years or more already, but only holding cash rather than entering the market. Inflation – a fall in the purchasing power of money – often means that cash savings erode over time in real terms, particularly in the current climate of low interest rates. In order to see better growth on your hard-earned savings, moving some of your capital into a risk-adjusted investment portfolio can help you outstrip inflation and see a real increase in the value of your wealth. Lump sum investment strategies also benefit from compounding returns by sticking to your long-term plan and adding additional savings as the opportunities arise.
Your retirement plans may be primarily based around pension benefits, whether from a workplace scheme of state pension provision. Whilst these pensions are part of your retirement plan, are they fit for purpose? Reviewing your existing pensions and discovering your options should be a vital part of retirement planning for any expat.
If you have a working history in the UK, you will likely have been a member of an occupational pension scheme. Once you leave the UK, those occupational pensions become ‘frozen’. This means that there are no more contributions being made to your pension pot. This is potentially detrimental to your retirement depending on the type of scheme.
Defined Benefit, or final salary, schemes provide a guaranteed level of income in retirement, calculated by your final salary, years of service, and accrual rate. Once you have left that scheme, the income benefits cannot accrue further. This may or may not have an impact on your retirement, but reviewing how your pension has been calculated will allow you to better plan for the future.
Defined Contribution, or money purchase, schemes are based on contributions from yourself and your employer being invested and growing over time. The value at retirement is the value of the total contributions plus any investment growth seen. Once you have left that scheme, there will be no more contributions going towards the pension, but growth can be achieved from the underlying investments. The investment growth will have an impact on your retirement funds, and so reviewing the strategy and costs associated will again help you plan for the future.
You may have several schemes of both types which you may consider consolidating, you may have one scheme that doesn’t provide exactly what you require and means further retirement planning is needed, or you may wish to take control of your pension and cut ties with your former employer(s). Whatever the case, your pensions are vital to your future and you should review them regularly as an expat.
Our Wealth Advisers can help you understand your pensions by requesting all of the relevant information on your behalf. Once received, we can help you review your options and plan what is best for your pension and your future.
Many of our clients also have offshore working history and accrued pension benefits through those previous employers. As with UK Pensions, a review of those benefits can be vital to helping you plan your future, and our Wealth Advisers can once again assist in collating the relevant scheme information before advising on what your best options are.
A Self Invested Personal Pension (SIPP) is a personal pension plan which is approved and recognised by the UK Government. Since 2015, it has been possible to transfer workplace pensions into a personal arrangement. This is carried out under the Pension Schemes Act 2015, giving savers what is known as ‘pension freedoms’, and is in accordance with regulations set out by HMRC and the UK Financial Conduct Authority (FCA).
A SIPP gives you full control of your pension, including your investment strategy, retirement income, and beneficiaries upon death. Whilst it may be possible for you to transfer existing benefits into your own personal arrangement, it is not always the right options for everybody and you should discuss with a Wealth Adviser to see if it may be in your best interests.
Speak to one of our Wealth Advisers about your existing pensions and they can, with your permission, request all of the relevant information about your current scheme or schemes, including projected value/income, scheme funding and solvency, investment strategy, costs, death benefits etc. For final salary schemes we will also request the Cash Equivalent Transfer Value (CETV), which is an offer of a capital lump sum to manage your own benefits with.
Once all the information has been collated, the Wealth Adviser will produce a detailed report regarding your current pensions, your current financial situation, and your wider retirement goals, as well as your potential options. You will then have all the facts available so that you can make an informed decision.
The impact of student debt on graduates’ financial and life decisions can be significant, but many still choose to go to university given the increased job opportunities and the higher future earnings that can be achieved.
Succession planning is ensuring a smooth transition of assets from one generation to the next. Once you have chosen which family members, friends, or even charities will inherit which assets on your death, it’s important firstly that those assets will go where they are intended, but also that any inheritance taxes due are also taken into account.
Argentum Private Wealth specialises in investment management and planning for whichever objective you have – retirement planning, education planning, succession planning, or general investments from surplus cash.
