Pension Transfer from the UK - Pound Sterling Accounts
POUND STERLING ACCOUNTS
All the major transfer operators offer a Pound Sterling account to their clients. The promotional words that go with this offering are usually something along the lines of:-
“If you feel it may be prudent to transfer your Pension out of the UK but are concerned about the exchange rate then we can leave your funds invested as GB Pounds.”
In all cases the Pound Sterling accounts give somebody transferring their UK Pension Funds the ability to hold this monay in NZ as GBP until a judgement call is made that the exchange rate is favourable to exchange into NZ Dollars.
This worked well 2 or 3 years ago as the GBP was able to earn 3% To 4%pa on deposit, and the whole exercise was profitable for the client.
POUND INTEREST RATES
At present the cash deposit rate( after tax) in the accounts we use for the British Pound varies between 0% to 0.25%pa.
Depending on which account we use the funds have an expense ratio up to 1.49%pa.
Effectively this means it is costing you to hold your transferred funds as GBP.
RISK
The aim of these accounts is to hold the GBP until you feel that the exchange rate is favourable. The RISK is that we have no way of knowing when this may be.
Have a look at this chart HERE, it shows the NZ$ vs GBP up until 12 March 10.
BRITISH ECONOMY
All the news I am getting about the British economy suggests that things over there are pretty grim.
I have selected a number of recent articles for you to read about the British Pound from the various financial newsfeeds that I get.
You can download them by clicking on the Report Name:-
British expats in Australia await UK pension decision
No more hope or glory for Britain
Kiwi forges ahead against faltering pound
UK pound drops on election fears
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"Experts in helping immigrants to New Zealand transfer their UK pension funds for the best possible outcome."