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Mike is an award-winning financial expert and a well-known leader in the financial industry.Having taken two of his previous firms to Chartered Status in the UK and also achieved the prestigious National IFA of the Year Award – Highly Commended.In addition, Mike is a well known Independent Financial Adviser and Money Coach. Qualified to UK Financial Conduct Authority (FCA) standards, a member of the Chartered Insurance Institute, a Founding Fellow of the Institute of Sales Professionals (FF.ISP), a Fellow of the Institute of Directors (FIoD) and featured as a highly qualified Financial Adviser in Which Financial Adviser.

Dukascopy TV interview – The Pensions Crisis

Mike CoadyExpat Advice Dukascopy TV interview – The Pensions Crisis

Dukascopy TV interview – The Pensions Crisis

I was asked to appear on Dukascopy TV again this week, the Swiss financial television station, to talk about the ongoing problems surrounding the UK pensions crisis.

During the interview, the host Elaine Stenson asked me my opinion on why the pensions crisis is happening in the UK, the consequences and frustrations of pre-retirees and those who have already reached retirement age, and the benefits of transferring to Qualifying Recognised Overseas Pension Schemes – QROPS.

I answered that the crisis is worsening primarily due to the ageing population.  People living longer puts an additional financial strain on businesses and the State, who have to keep paying out pensions for longer.  This subsequently leads to underfunded pension schemes and disappointment for many when they reach retirement, as they are unable to maintain a comparable lifestyle in their ‘golden years’.

I also stressed to the interviewer the importance of viewing retirement as a personal responsibility.  People can no longer rely on the government or their current employer to fund their retirement.  The earlier they start saving and adding to their pension pot, the better off they’ll be later in life.  I mentioned that the pensions crisis is not only affecting people in the UK, but the estimated 5 million British expats living overseas.


Frustrations surrounding pensions

The main frustrations experienced by our clients, the majority of whom are expats, when it comes to pensions, are firstly the risks surrounding currency fluctuation.  I explained to Elaine Stenson that this can have a massive effect on a person’s retirement income, and we always advise our clients to have their pension paid out in the currency of the country they live in.

A lack of control over their pension and safeguarding existing pension arrangements are also of great concern for our clients.    Constant changes to UK pension legislation can affect retirement funds, such as the planned reduction of the Lifetime Allowance from £1.5m to £1.25m, coming into effect on 6th April this year.

I made it clear in the interview that seeking advice from an independent financial adviser is more important than ever.  It’s vital that people completely understand their pension plans, and review them on a regular basis.  Focusing on other, more flexible alternatives is also advisable, and I highlighted the many benefits to expats of QROPS, HMRC-recognised Qualifying Recognised Overseas Pension Schemes.

By transferring to a QROPS, people take control of their own pension funds, removing any potential risk of pension schemes going bust.  Pensions are paid out in the currency of their country of residence, therefore eradicating exchange rate fluctuations.  I also spoke about the possibility of taking out a pension commencement lump sum, which can be as much as 30 per cent, compared to a maximum of 25 per cent in a typical UK pension scheme.

QROPS are becoming increasingly popular with expats and people seriously considering moving out of the UK.  There has been an ongoing rise in demand for QROPS since they were established in 2006, which looks set to increase much further in the coming years as more and more people realise their massive advantages.

I told the interviewer that consulting financial advice, ideally from a cross-border specialist, is essential, in order to get the most out of retirement and to make sure the right decisions are made.

View the full interview here.

Mike Coady
Mike Coady

Mike is recognised at the forefront of financial planning as a financial advice mentor who demands only the best outcomes for both individuals and businesses he works alongside.

  • Reece Fallaize

    Individuals find themselves getting very confused over their pension obligations and often put it to the back of their minds in the hope that everything will be ok in the end.
    A good place to start would be to treat your pension like your health and that is to receive regular check ups even if you think everything is fine and that there are no underlying issues.
    As with many things the earlier you do spot a problem the better chance you have of getting it fixed without drastic consequences. Likewise if everything is fine you haven’t lost anything by having it checked out.
    Just by conducting an annual pension review individuals will be in a far better position than turning a blind eye until just prior to retirement.

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