Cash in Pension to reduce Mortgage?

I understand fully why someone would want to release their pension early in certain circumstances.

I'm just curious as to why you seem reluctant to share what the charge for this service is, or what the advisor told you about your tax position in relation to what you were doing.
 
Dave,

The charge for the service was 10% but I was told it depended on the size of the pension.

I'm not really sure how it was done but i know my pension was transferred overseas.

It took 3 months for the process to complete. The service throughout was very professional and very helpful.

Would I recommend it? Yes, certainly if you are in the same position I was in.
 
Thanks for the reply. Frankly I wouldn't touch this type of service with a barge-pole, for several reasons. In no particular order: -

  • The service is unregulated, so you're entrusting your pension fund to an unknown entity who is going to move it through various countries around the world. You have no protection if the entity doing it happens to be a scammer and makes off with your fund when it reaches an offshore location.
  • While not currently illegal, this sort of service (moving pension funds around the world to avail of more favourable retirement rules in another jurisdiction) is against the spirit of both Irish and UK pensions legislation. The UK HMRC are well aware of the practice and have made some preliminary moves already to stop it. See Singapore, for example.
  • Although you may have got away with it now, there's no guarantee that someone availing of this type of service can't be slapped with a tax bill in the future from any one of a number of countries, if it turns out that they had no legitimate connection with the country to which they transferred their pension funds.
  • The charge for doing this is high. Commission of 10% of a pension fund.
  • I've seen some very suspect practices for promoting this type of service, which would make me wary of the type of people involved. For example, I've seen instances where people connected with such trust busting businesses will anonymously register on money advice sites just to plug the service and will even send private messages to anyone who expresses an interest. If the business was legitimate, they wouldn't need to resort to such underhand sales shilling.
 
Dave

Have to agree with your concerns wholeheartedly.Dont think that moving pensions abroad to avoid paying penalties and taxes is a good idea, especially if it is an unregulated service.

However, isnt it about time that the practice of cashing in your pension early should be allowed and becomes regulated? Certainly the portion that the pension holder has paid directly.

The current economic climate means that many people are struggling financially and they should be allowed the option of cashing in a pension legally and without too much penalty involved in Ireland.

If someone needs money to meet mortgage commitments or loan repayments because of situations that are largely out of their control they should be allowed use whatever assets they have to meet those obligations. Is a pension not an asset?

And if it is an asset they should be allowed dispose of it, especially in a market where the vast majority of them are nowhere near worth the value of what people have put into them.

Certainly from my own perspective, my other half has an old pension that she made contributions about €10k. We could certainly use that €10K now rather than watch it diminish further and further with no option as we are both no longer working full time.
 

Think most people would agree with you but apparently Joan Burton is afraid of undermining the pension industry. So allowing people to access their own money will undermine the industry but a 0.6% tax on those savings won't. Welcome to Irish politics.
 
Pension

Anyone with a private or occupational pension who no longer lives in the UK or intends to leave within the next 12 months can transfer their pensions abroad inot a QROPS. This transfer is tax free, but tax any cash taken depends on where you are resident at the time.
 
Hi expatworld,

How would you reply to the suggestion in [broken link removed] and others that trust-busting is against the spirit of the QROPS legislation and therefore may well be clamped down on by HMRC, with possible adverse consequences imposed retrospectively on people who avail of such a service?

Also - what formal protection do clients have when their money leaves this jurisdiction?
 
@Dave Vanian,
I was not talking about trust busting at all, one has to be 55 or over to take any cash from a private pension and than only a miximum of 30%
Have a nice day
 
@Dave Vanian,
I was not talking about trust busting at all, one has to be 55 or over to take any cash from a private pension and than only a miximum of 30%
Have a nice day

Bearing in mind that this is an Irish website aimed at Irish residents, what benefit is this service you're promoting, to an Irish resident?