Transferring an Irish DC pension to one based in the UK

MisterParsley

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I have a defined contribution work pension that I built up between 2001 an 2022. I left the job and moved to the UK at the end of 2022 and will retire in July of this year. Since being in the UK I have opened a SIPP but have been told I cannot transfer into this from an overseas pension. I also opened a regular pension with NOW and they say I might be able to transfer the Irish pension to them. I am investigating this option at the moment.

Does anyone have any experience of doing this?

Also it seems to me that based on a few simple quotes from Ireland and the UK sites, the annuity rates are better in the UK than Ireland. Might that be true?

If I cannot transfer the funds are there any restrictions I might encounter because I live in the UK (I still have my Irish bank account and its most likely I will buy an annuity)?

Thanks in advance!
 
Also it seems to me that based on a few simple quotes from Ireland and the UK sites, the annuity rates are better in the UK than Ireland. Might that be true?
It is true at the moment. It may or may not be true at the point at which you come to buy an annuity.

The main factor in determing annuity rates is long-term interest rates at the point where the annuity is purchased. The insurer buys a wodge of government bonds which will pay interest over the annuitant's expected life and the amount of the annuity they promise is based on the amount of interest they are going to receive. So if interest rates are high, they promise a high annuity amount, and vice versa. But all that matters is the leve of interest rates prevailing on the day the annuity is purchased. If sterling interest rates remain higher than euro interest rates, then sterling annuity rates will remain higher than euro annuity rates (and vice versa). The further off the day on which you expect to retire, the harder this is to predict with any reliability.

There is a second factor affecting annuity rates, which is mortality data. When they sell you an annuity, the insurer has no idea how long you personally will live — you could die tomorrow; you could live to 105. So they price annuities based on poplulation-wide mortality data. They have no idea how long any particular annuitant will live, but they have a pretty good idea of how long their population of annuitants, on average, will live.

Mortality data is country-specific; Irish insurers issue annuities priced on the basis of Irish mortality data, and UK annuitants issue annuities priced on the basis of UK data. Since Irish people live, on average, longer than UK people, the annual amount of an Irish annuity, for a given purchase price and at a given interest rate, will be slightly lower than the annual amount of UK annuity (but it will, on average, be paid for a slightly longer period of years).

Of those two factors, interest rates are much the greatest. difference in interest rates will have an effect on annuity prices that massively outweighs the effect of differing mortality data.

There is a third issue you should consider. You have recently moved to the UK; you will retire this year. Where do you expect to spend your retirement? If you live in Ireland but have a UK annuity, or the other way around, you are exposed to a foreign exchange risk. Your costs — accommodation, groceries, utilities, whatever — are priced in euros but your income is in sterling. If sterling declines against the euro, that could be a big problem for you. Of course, if it rises, that could be a big bonus. But is this really a gamble you want to take in retirement? So there's a lot to be said for arranging matters so that your retirement savings are invested in the currency of the place where you will live (and spend) in retirement.
 
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Where do you expect to spend your retirement?
Thanks for the background TomEdison, really appreciate it.
I will retire in the UK and that fact has played into why I would prefer a sterling annuity. It's now a question of how or if I am allowed to get the funds over to the UK in order to buy one.
 
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