Financial Healthcheck

UPDATE:

If someone referred you to an unqualified quack doctor you wouldn’t thank them for it, would you?

Well here’s a deal: I’ll never send you to an unqualified, unregulated financial adviser and I will check them out beforehand. Also, I promise you there will be NO upfront charges. My Email 

Background

The peak year for house purchases by UK & Irish citizens in Spain was 2006. Expanding equity in main residences fuelled the desire to buy second homes, many with the specific intention of retiring to Spain. Let’s call it living the dream!

Many emigrated with the specific intention of making Spain their permanent home. Why is this important? Many non-residents are also affected. Let’s look at what has changed since 2006

Major Changes

How many of you readers are affected by one or more of the following changes?

• Exchange rates

I made a comparison of mid February 2006 to 2019. Using a sum of £500, say a monthly income or pension the exchange rate reduced. €734 in 2006 became €560 in 2019.

• Interest rates

If you have savings or investments based on interest rates, you won’t need me to spell it out. Have you considered any alternatives? This would be a vital part a Financial Healthcheck with a fully qualified adviser. My Email

Interest rates that affect us are set by the European Central Bank and Bank of England and at present, low rates are likely to continue 

• Mortgages

If interest rates are low, this must be good for mortgages, so you would think. However, there are two factors which cloud this issue;

• Because of past mistakes, which lead to bank closures, it can difficult to get a mortgage.
• Many people, especially those who borrowed high percentages often can’t get out of deals they made in earlier years. If you are paying more than 2.25% you definitely need a review

The mortgage market has changed substantially in the 13 years since 2006. If you need help with getting a mortgage I can put you in touch with a major company who have been successful in the past  My Email

•  UK Pension Schemes

If you have emigrated or plan to, then it helps to know and understand your existing scheme. The rules which are ‘set in stone’ in the UK may be very different if you seek a transfer. This often surrounds retirement age. There have been many changes in the past few years with new ones planned.

One of the values of a Financial Healthcheck is for the adviser to understand and tell you exactly what you have now and to compare with the alternatives. The Financial Conduct Authority (FCA) is very strict about pension transfers. You should fully understand your rights & options. To help this, I only ever recommend QUALIFIED and fully INDEPENDENT financial advisers.My Email

• QROPS and other OPTIONS

The concept of QROPS became available in 2006 but did not really have a market until 2008. Along the way, there have been many  major changes and 11 year old schemes are hardly recognisable today and almost CERTAINLY need reviewing by a PENSIONS SPECIALIST.

In 2019, whilst QROPS suit many expats, International SIPP's are often a very realistic option. Unless your adviser considers ALL OPTIONS then you have NOT received best advice.

Remember QROPS or SIPP's are a UK pension transfer and NEED regulated specialist advice plus a comparison with alternative options. Ask me for a referral My Email

•    UK & Spanish Inheritance Tax

This subject is so complex that it cannot be dealt with in a paragraph.

The headline topic for me is that Spanish ISD is levied on the death of the first spouse or partner. It’s bad enough becoming a widow(er) without having to pay a tax too! This can be avoided by careful planning. I will put you in touch with a suitably qualified adviser My Email

It’s also important to understand the difference between residency and domicile which affects these two taxes in a major way.

One factor which affects most UK expats and property owners in Spain, unlike other taxes there is NO double taxation agreement between UK & Spain on Inheritance Tax, because the taxes are so different

•  Spanish compliant Investment Bonds

If you have had an investment bond for more than five years it definitely needs a review. In recent times the charging structures have been reduced and you maybe losing a benefit. As I only recommend Qualified and Regulated advisers you can seek best advice. I addition, there are many companies offering Investment Bonds so it is important that the advisers I recommend are Independent too.My Email

This is just a sample! When did you last review your finances? Can you get better arrangements? Can you save money? Can you cut your tax bill?

Whatever your objective, you can get help. A Financial Healthcheck, without obligation and no upfront fees can be arranged with a regulated, qualified & independent financial adviser. If the advice involves a pension transfer, a specialist consultant will check your suitability.

YOUR Financial Healthcheck

Please send me a few outline details, so that I can source the right adviser for you. In particular, the subject(s) you want to discuss, age(s), your concerns and the area where you live. It will also help if you can give a contact number and the best time(s) to call. My Email

After checking out where you stand, with peace of mind you can get back to living the dream!

Further Reading

More detailed information can also be accessed from Financial Pages in Spain;

Scam Watch

Readers’ Favourites

La Torre Fx – Foreign Exchange

Please feel free to My Email on any aspect of financial information, UK or Spain

​David

David Goodall

Financial Pages in Spain

davidgoodall.spain@gmail.com

UK Pension Schemes or Plans but you have emigrated?

Ask for a review, without obligation, with a UK AUTHORISED adviser with experience of helping expats. UK Budget changes to Pensions make this VITAL

Types of schemes, options and regulated advice

It seems that every year, in the UK, there are new laws, new regulations, new ideas or changes to pension plans or schemes. Just to complicate matters there are still many arrangements which have different names! The changes announced in March 2015 are fundamental

UK Pension Plans and Schemes

Here are a list (and it probably isn’t exhaustive) of the titles sometimes used for pension plans. If you have one but don’t understand what it is, please email me.

PPP – Personal Pension Plan

SIPP – Self Invested Personal Pension

GPP – Group Personal Pension Plan

S32 – Section 32 Pension Transfer Plan

ShP - Stakeholder Pensions

PPTP – Personal Pension Transfer Plan

UP – Unsecured Pension

ID – Income Drawdown

ASP – Alternatively secured pension     

AVC – Additional Voluntary Contributions

FSAVC – Free Standing Additional Voluntary Contributions

COMPS – Contracted Out Money Purchase Scheme

CIMPS – Contracted In Money Purchase Scheme

EPP – Executive Pension Plan

RAC – Retirement Annuity Contract

Section 226 Annuities

Superannuation Schemes

SSAS – Small Self Administered Scheme

OPS – Occupational Pension Scheme

DBS – Defined Benefits Scheme

FSP – Final Salary Scheme (DBS & FSP are the same – different names)

S2P – State Second Pension

GPS – Graduated Pension Scheme

SERPS – State Earnings Related Pension Scheme

BSP - Basic State Pension

SRP – State Retirement Pension (BSP & SRP are the same)

Maybe, you’ve even got something with a name not covered here! Please email me if you want anything explained!

Even when you have understood the plan or scheme you have, there could be a whole variety of rules and regulations that you don’t understand.

What are Your Options?

This is not meant to be exhaustive and is generic, you really need to consult a reputable authorised pension adviser.

·        Do nothing

This is very much the worst option. If your circumstances are changed, including emigrating, you need to know the affect on your pension arrangements

• Take the benefits exactly as they were intended but transfer the pension income to Spain

This is often a good option but still needs to be reviewed. Circumstances change and you might have benefits you no longer need or you want to change the date of retirement. Many schemes have restrictive clauses which can affect your options and rights. You also need the correct tax treatment of your income.

• Bring your pensions together in a QROPS

For most people who emigrate, this is the best option, though it also needs caution and advice from a specialist. I recommend the ‘further reading’ below. In particular, beware of adverts which promise cash settlements and benefits before normal retirement date. If it sounds too good to be true, well you know the rest. Please email me for details of a genuine specialist.

• Bring your pensions together in a SIPP

You can certainly use this as an option. If your emigration is not permanent it could be a good one. However, the self investment aspect of a SIPP is often available within a QROPS. Not all SIPP trustees will allow investors who live outside the UK, so you certainly need specialist advice.

• Best decision : Review your pension options with an authorised UK pension transfer adviser

August 2014

Warning from HM Government about UK Pensions

From Steve Webb, Pensions Minister

“If cold callers offer you massive returns for your pension pot that are just too good to be true, it is because they are.”

Sunday Times August 10^th 2014

Warning

For most people, their Pension Fund is the biggest or second biggest asset. BEWARE Scam Watch as this post warns

David Goodall

Financial Pages in Spain

Email

Further Reading:

QROPS Qualifying Recognised Overseas Pension Schemes

Pension Terms & Expressions

Do you transfer money, bank to bank on a regular basis? You can reduce the ‘currency risk’ with La Torre Fx – Foreign Exchange This service is also better than most banks for one off transfers