Wednesday, 12 January 2011

The day I found a million zlotys

This post is for all UK expats who've been living in Poland for some years and who've paid into a British occupational pension fund. This... is good news. Today I picked up from the post office the Certificate of my new personal pension plan.

I left England for Poland in 1997 having worked for one employer for 16 years. Over that time, I'd been paying into the employee pension scheme, my contributions being topped up by my employer. Since 1997, the UK economy has hit two recessions, so I thought that my pension fund was worth not a whole lot. The way my former colleagues put it - they'd have to work to 85 to get anything meaningful out of their pension fund.

So imagine my surprise and delight when I discovered* it was worth much, much more (like ten times more than I thought) - and that I could take it out of the UK - and that I wouldn't be taxed on it - and the annuity wouldn't disappear after my death!

The trick, O fellow expats, is a thing called QROPS, which allows you to move offshore what money or monies you have locked into pension funds back in the UK. The funds will then be administered on your behalf so they can grow and grow - and when you retire (not in the UK - that's the point of QROPS) you can do with the pot of money as you please.

Another meaningful piece of advice to expats from the UK is not to let your National Insurance Contributions lapse. You can skip up to seven years' worth of NICs, and providing you make up the shortfall, you'll still have the right to a full basic state pension (currently worth around 2,000 zloties a month when spent in Poland). Well, I'm paid up - full stamp - so no worries here.

So I am delighted to learn that my old age is financially secure (assuming of course that I stay in Poland, and that no unknown unknowns pop up along the way).

* Thanks to a certain financial adviser who I can put you in touch with if you are in the same boat as me, ie a UK expat with pension funds left in the UK, who's got no intention of retiring there.

This time last year:
Making the most of winter

This time two years ago:
Progress on ul. Baletowa

This time three years ago:
Shortest, mildest winter?


adthelad said...

Lucky you! Yes, I know, we make our own luck :)

pinolona said...

Oh the whole state pension thing irritates me. I've paid contributions (not for all that long admittedly) in four EU Member States now. In theory I should be able to transfer contributions from one state to the next so that I get a continuous fund. It's all very well talking about free movement of persons and mobility for workers, but this almost never translates in practice because there's just no coordination at individual Member State level.

National Insurance Voluntary contributions in the UK are actually quite high - not that advantageous if you're already paying hefty social security as a self-employed person in another Member State...