Transfer your UK pension

Stewart Group financial adviser Bridget Matheson said people should act soon if they wish to transfer pension plan funds from the United Kingdom. Photo / Glenn Taylor

Former British residents are running out of time

People with UK pension plan funds could find their money stranded if they don't act soon. Pension reform making its way through the British Parliament is likely to ban the transfer of some pensions to New Zealand from April next year.

Stewart Group financial adviser Bridget Matheson said current rules allowed people their money in a recognised pension scheme. The legislation changes mean if you have worked in the UK and contributed to a government private pension scheme you need to act quickly if you wished to transfer it to New Zealand, she said.

The largest affected groups were ex National Health Service, railway and education sector employees.

"The UK government is in further consultation over changing the legislation for privately-held pension plans as well. It is possible the proposed changes made to the public system will be mirrored in the private system in time."

The transfer process typically took six months, so people should start the process before October.

PricewaterhouseCoopers Hawke's Bay chartered accountant Giles Pearson said new New Zealand residents within the last four years should not be subject to tax in New Zealand. "If you have lived in New Zealand for more than four years there will be tax to pay on any lump sum you transfer here. The amount will depend on how long you have been in the country."

"If you have a financial adviser you work with currently we strongly suggest you talk with your adviser now about transferring your pension and whether it is the right move for you.

"If you think this might affect you, seek advice. Each individual case is different, but not doing anything about it could mean you miss the opportunity to transfer."