UK Pension Transfer For US Citizens
This article is intended for British Expats and will explain how you can transfer your UK pensions as a US resident.
Pension transfers abroad can be complicated, so we will break this down into the following sections:
Do you need to transfer your pension as a US resident?
What are my best options for transferring my UK pensions?
How much does a UK-US pension transfer cost?
How do I choose an adviser to work with on the transfer?
01 Do I need To Transfer My Pension If I live In The United States?
The answer to the above depends entirely on your personal circumstances and your existing UK pension scheme. If you are looking to transfer a standard defined contribution pension scheme to the US, the below provides a list of important questions to ask your existing UK pension provider:
Can I access my money anytime I want, and however much I want?
Can I continue to manage my investments as a US resident?
Can you pay my pension benefits to international, or US, bank accounts?
Can I hold my pension funds in USD, to mitigate potential currency risk?
If you are not happy with any of the above, then you should consider engaging with a regulated financial adviser to discuss your pension requirements
For defined benefit pension transfers to the US, the process is more complicated and the questions you need to consider are different. For a full guide on transferring your defined benefit pension as a US resident, see our article below.
Defined Benefit Pension Transfer To The US - The Wealth Genesis
02 Where Do I Transfer My UK Pension As A US Resident?
So, the first thing to understand is that you cannot, under any circumstances, transfer your uk pension to a US IRA account, or 401k. They do not operate under the same rules, and HMRC does not permit transfers between the two.
In the past, there have been 2 options for US citizens. These are a qualifying recognised overseas pension scheme (US QROPS) and an International self-invested personal pension (SIPP for US citizens).
A QROPS is no longer possible due to the introduction of the overseas transfer charge. As such, the solution for US citizens is the International SIPP. You can read more about the international SIPP and how it works using our guide below:
The International SIPP - The Wealth Genesis
03 How Much Does It Cost To Transfer My UK Pensions To An International SIPP?
This depends entirely on which advice firm you work with. The vast majority of financial advisers charge between 1% and 5% depending on the value of your pensions. They will also charge an annual management fee of 1%.
At The Wealth Genesis, we charge all our clients the same one-off flat-fee for UK pension transfers (£3,000) due only upon completion. We charge an industry leading annual management fee of 0.85%.
To discover how we work with our clients and our charging structure, see our fees below:
Our Fees - The Wealth Genesis
04 Choosing The Right Pension Transfer Adviser
The first step is to check the regulation and qualification of anyone or any firm that you engage with. Make sure both the firm and the individual is listed on the SEC website via broker check.
Then, when speaking with any adviser, make sure they understand your needs and know what you are looking for, rather than just selling a product to you. Be sure to only engage with fiduciary firms (i.e. companies that work in your best interests rather than selling products).
Finally, understand their fees. If they seem complicated, the chances are you are being charged high commissions and hidden fees. All clients should know exactly what they are paying to the pound and pence.
Regarding fees, we operate off a flat-fee basis for all transfers regardless of the pension value. We personally feel any fee over 3% to be excessive for a pension transfer.
UK Pension Providers For US Residents | Our UK Pension Transfer Service
All our advisers are dual qualified to the highest standards, in both the US and the UK. This means we can bring expert knowledge from both sides of the pond to ensure your pension continues to work for you during your retirement in the United States. All adviser qualifications and credentials are available upon request.
Furthermore, we are classed as a fiduciary, meaning we will research the whole of the market before providing any formal advice, ensuring any solution or pension transfer is the lowest cost and best option for you. We do not use external, expensive fund management solutions such as DFMs, which typically cost over 1% per annum in fund fees alone. Through our investment team, we construct low cost portfolios consisting of ETFs, trackers and mutual funds to ensure minimal drag on your retirement funds.
To understand how our expert, independent and regulated US financial advice team can help you, book a complimentary discovery call using the diary below.
UK To US Pension Transfer FAQs
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Most UK pension providers will limit retirement benefits for non-UK residents.
The reason is they do not have licensing permissions to provide any advice, and the cost of administration and service may be too cumbersome for them to asist. -
Once all documentation has been completed, the transfer will typically take between 1 month and 3 months to complete.
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Yes you can, providing you understand the risks involved.
Some clients prefer to be more involved in the investment management, and we will always take into account client preferences when constructing a portfolio.
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At the time of writing, the best SIPPs for US citizens are provided by Morningstar and Novia Global.
Both are low cost, FCA regulated solutions which various benefits.
The exact SIPP will depend on your requirements and investment objectives.
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Yes, an International SIPP can pay into any bank account as long as it is in your name.
