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Stakeholder Pension/ 7.4.2014• Jami Maree Lock• Posted At 11:44 AM

Stakeholder Pension

Q. I currently work abroad, I have a stakeholder pension in the UK, which i pay into monthly. Is it still possible to do this as i am working abroad and will continue here for the foreseeable future? Thankyou and Regards, Chris

A: Hi Chris – To be eligible to pay into a UK pension (Stakeholder Pension) you need to be either UK resident for tax-purposes, a crown employee or the spouse/civil partner of a crown employee. The declaration you would have signed when you joined to pension would have stated you will inform the pension provider within 30 days if you are no longer meeting the eligibility criteria. However if you stop paying into the pension now and return to the UK you can always put in a lump sum as long as you don’t go over the annual allowance (£40,000 from April 6th onwards). I hope this helps, regards, Steve

Steve Weisner Dip PFS, BSc (hons)
Independent Financial Adviser
Radcliffe & Newlands
3rd Floor,
14 Bonhill Street,
London
EC2A 4BX

More questions.

Q. I have £250,000 to invest which I would like an income from what is your advice

A: To give advice on this there are lots of factors which need to be taken into consideration, such as accessibility, attitude to risk, capacity for loss, taxation, age and family situation to name but a few…. MORE

Other Questions.

Q. I have two AVIVA policies (valued @ £82,000) which are due to mature mid December 2016. AVIVA tell me that both have an investment return of 4.4% per year with an inflation rate of 2.5%.  I pay £130 per month premium. I am of the opinion that it will be more economically viable to take the transfer values now as I feel that by investing independently I will receive a far better return in the medium term. Whilst I may lose a certain amount between now and maturity I believe that I will benefit by eliminating further premium payments, the deduction of AVIVA annual costs and expenses (an unknown amount). At the same time I can look to the prospects of a better rate of return (last year @ 9% on other investments).  I was told that AVIVA build in the final bonuses into the Transfer value (not sure about this!). Can you calculate what the loss might be on maturity taking in the factors that I have provided? Any comments or views on this? Regards Steve

A: I can help with this but I will need more details and would need to write to Aviva on your behalf to find this out, and to do this I’d need your written authority……More

 

 

 

Comments

  1. posted on 07 April 2014

    Hello Steve,

    Thanks for the information.

    I currently am not paying UK income tax, but am subject to other taxes having my residence in the UK. No doubt this means i cannot continue with the present scheme, until i return full-time to the UK. Just need to clarify this point, as i thought it maybe possible for up to 5 years to continue paying into a stakeholder pension.

    Are there any other retirement schemes i could use to save in, whilst outside the UK?

    You help is much appreciated and i just have to clarify my above points … thanking you in advance.

    Kind Regards,

    Chris

  2. posted on 07 April 2014

    Hi Chris

    You’re talking about the basis year rules whereby you nominate your last tax-year where you were meeting the eligibility criteria and then have 5 following tax years you could still contribute up to the higher amount of either £3,600 gross per annum or 100% of your UK relevant earnings.

    You should still tell your stakeholder provider to avoid issues down the line and let them know which tax-year you’re nominating. I hope this is okay, you may still want to wait until you’re back in the UK as you will only get 20% tax-relief under this basis rather than tax-relief at your highest marginal rate if you’re UK tax-resident,

    Regards,
    Steve

    Steve Weisner Dip PFS, BSc (hons)
    Independent Financial Adviser
    Radcliffe & Newlands
    3rd Floor,
    14 Bonhill Street,
    London
    EC2A 4BX

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