British expatriates in Spain, particularly in “hotspots” such as the Costa Blanca and the Costa del Sol, should be extra vigilant against potential financial fraudsters following the introduction of new pension laws in the UK, according to AES International.
From 6 April, those with UK-based pension schemes can access as much of their pension scheme as they want from age 55, subject to tax. While the new pensions flexibility rules are aimed at giving people more freedom over their finances in retirement, AES International is warning that conversely it could cost people their financial independence if they made the wrong decision.
James McLeod, head of pensions at AES International, said: “Sadly there are many unregulated, unqualified advisers in Spain who see the new pension flexibility rules in the UK as an opportunity to swindle hard working people out of their life savings.
“Expats would do very well to remember that, while the new rules do allow much more freedom around how people can withdraw funds from UK-based pension schemes, there is still tax to be paid and rules which must be adhered to. Heavy charges can be levied by HMRC on those who fail to obey the rules.
“We would always warn people to be very wary of responding to any unsolicited correspondence, but would now stress this more than ever and add that if anyone tells you they are able to give you access to your UK pension completely tax free, they are wrong and are likely trying to scam you.”
As part of these latest pension changes, the UK Government also made it law that anyone offering advice on a transfer from a final salary or “defined benefit” scheme into a personal pension or “defined contribution” must be authorised to do so by the Financial Conduct Authority.
McLeod added: “If you take advice on a UK pension, it is paramount that you ensure you are taking advice from a person and company which is qualified to do so. This can be easily checked by looking on the Financial Conduct Authority’s website, or you can speak with your local AES International representative who will be able to help you.”
To help expatriates avoid the pension pitfalls to which many unfortunately succumb, AES International has published a free guide. Consumers wanting to download a copy of the free guide to pensions for expatriates should click here
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