British expatriates working abroad have been warned against having a lack of awareness towards pensions.
The main area of concern that is being highlighted is the potential for pension shortfalls to be created, especially by expats who are shorter contracts.
Financial planning organisations are said to have been alerting their expat clients over the dangers of neglecting their pension payments when abroad.
One adviser remarked: “All too often when people take a short term contract and move abroad they put their UK pensions on hold. Since they are on a contract they are unlikely to be eligible to enrol in any local company pension scheme. What then happens is that contracts are extended but the pensions are forgotten and people find ten years down the line they have failed to make adequate provision for their retirement.”
What this can result in is a significant pension reduction come later years. Expats who don’t adequately plan for their retirement and pension have been found to be amongst the worst prepared for a life after working, even if their initial motivations for travelling abroad was to find greater financial reward. This is mainly down to a lack of forward thinking, with more importance placed on the short term.
Falling into this situation is foolish as expats generally have more pension option s than their onshore counterparts. A number of pension transfers exist that allow expats entitled to a UK pension to transfer said pension offshore, such as the QROPS. What is clear is that financial planning is vital when thinking about the future. Get in touch with a recommended financial adviser today and find out more about planning for your future.