subject: Clarification On The Pension Lump Sum [print this page] The world of pensions can be a particularly daunting one when it comes to deciding how to take your retirement. The various kinds of pension and the many changes in the law make it a topic that requires professional advice. One particular term, the pension lump sum, can cause particular confusion. In this article we'll examine the basic ideas behind this.
Retirement is a time of life that should be associated with security and relaxation, and having your pension plans fully sorted out is conducive to this happening. Having your finances in order means you can enjoy your retirement to the maximum extent. The pension lump sum is one particular way of taking an income that you have spent previous decades building up. There are a great many nations around the globe where the pension lump sum can be taken, nations to which you can transfer your existing pension into a Qualifying Recognised Overseas Pension Scheme (QROPS) and take advantage of the various benefits that that county offers.
There are a lot of reasons why people choose to spend their retirement years abroad, reasons cited often include reliable weather, attractive countryside, good quality food and a lifestyle that differs from that of the pensioner's home country. As more and more people are choosing to take their pension abroad, the pension lump sum has become more and more significant.
The pension lump sum can give you one large pot of money with which to kick-start your new life. This money can be spent in any way you please; perhaps partly on your family and yourself on holidays and various goods, perhaps to be saved for use in the future or used to provide an income stream. Today, it is a possibility to transfer your pension to what is known as a QROPS, a Qualified Recognised Overseas Pension Scheme, whereby there is no obligation to purchase an annuity when you retire. When this route is chosen, it is crucial that the pension lump sum payment does not contravene QROPS legislation and create an unauthorised payment charge as specified by Her Majesty's Revenue and Customs.
An additional benefit from a QROPS is that the whole value of that fund can be paid to chosen recipients upon death, for example a partner or family member, so long as the given QROPS period has passed by. This ensures that all the money that has been saved is not lost or restricted in how the benefits can be paid.
For many, the lump sum pension can be a little daunting, so it is important to seek professional advice from a reputable QROPS advice expert. This ensures any pitfalls are avoided and retirement is as enjoyable as possible.
