Comparison between UK and NZ Pensions

Feb 20, 2008

With a UK Pension

  • You can receive a lump sum when you reach your pensionable age. This is limited to 25% of the value of your pension fund, or for occupational pension schemes based upon a formula involving salary and service. This latter formula is being done away with in respect of service from April 2006, under the UK Government's Simplification Programme.
  • If you die with a UK pension scheme your spouse can get up to 2/3 of the pension you would have received. If you both die your pension dies with you, however, If you both die leaving qualifying dependent children , your UK pension could continue for as long as you fulfill the schemes eligibility criteria. With New Zealand superannuation plans all of your remaining investment becomes part of your estate and is passed on to your children, heirs.
  • Your payments from your UK pension funds will be affected by exchange rates and bank transfer charges.
  • New Zealand Inland Revenue assesses worldwide income as taxable income even if your investments are invested in tax havens. You may receive a tax credit for any income tax already deducted in the UK.

With a NZ Pension

  • At age 65 you will receive a state pension (New Zealand Superannuation) if you have lived in New Zealand for a total of 10 years since you turned 20 and a total of 5 years since you turned age 50. Any UK state pension will be offset against (deducted from) your New Zealand superannuation entitlement.
  • You can draw down on your investments usually from age 60 (depending on the requirements of the Trustees) and this is not regarded as assessable income for tax purposes. You can set your own income level.
  • Your personal superannuation savings (not the Government's New Zealand Superannuation) are part of your estate on death.



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