Private Pensions

Uggh, my company is being totally stupid and really making our pensions scheme totally sh*t.

{ Well, at least I have a company one, hubby after working for a tiny company for the last 20 years has just got his government mandated one, and a whopping 1% of his salary goes in and 1% is matched by his boss. He's able to top it up and he will, so we're finally on the way to saving for him. Better late than never. }

Meanwhile, I would like to make sure that I've got a good nest egg saved up and would like to start a private one.  But it's a total minefield and tax situations always seem to constantly change.  Anyone have any good thoughts and advice (Also looking at moneysavingsexpert, but don't know if there are pitfalls for a dual citizen in anything either)

Meanwhile, I would like to make sure that I've got a good nest egg saved up and would like to start a private one.  But it's a total minefield and tax situations always seem to constantly change.  Anyone have any good thoughts and advice (Also looking at moneysavingsexpert, but don't know if there are pitfalls for a dual citizen in anything either)

Maybe post this question in the tax forum?

Yeah, true tax board probably okay to ask, but I was thinking overall pensions in general first and then dig down into anything tax related.   

Yeah, true tax board probably okay to ask, but I was thinking overall pensions in general first and then dig down into anything tax related.   

I'd start with the tax questions so that you know which products to exclude and work from there! 

Cut to the chase if you like!

Is there a difference between a UK private pension......and just investing your money with a company like Vanguard?

I'd start with the tax questions so that you know which products to exclude and work from there! 

+1

I have 2 UK private company pensions and I am a UK/US dual citizen.  I never contributed to them after moving to the USA and never reported them on FBAR forms but as soon as I started receiving monthly income from them I started reporting the income and paying the tax on them to the IRS.

I know the IRS does not recognize the UK equivalent of a Roth, ISAs, and tax the interest on cash ISAs and treat stock and bond funds inside an ISA as Passive Foreign Investment  Companies.

I will be interested in hearing from the experts here about SIPPs as our son has just relocated here and is about to be offered a job so will be in a similar situation as regards UK pensions.

Do you know what bugs me? National Savings and Investments (NS&I). If you look at their terms and conditions US Citizens specifically are barred from some of their products. NS&I is owned by the UK Government.

Not that I want to buy any of their products, but I did get my MP to admit that this is potentially illegal discrimination - can't single out one nationality for specific treatment.

To the question asked - we have all of our retirement savings in the US. We set it all up many years before we moved to the UK and have just kept them. As we want to retire to the US it seemed simpler to stick with keeping everything there.

Is there a difference between a UK private pension......and just investing your money with a company like Vanguard?

Yes, there are tax advantaged vehicles in the UK similar to IRAs and Roth IRAs in the US.

Our son has just relocated and rolled his US company DC pension plan (401k) into an IRA in Vanguard in the USA where it will sit and grow unmolested by either the IRS or HMRC.

Do you know what bugs me? National Savings and Investments (NS&I). If you look at their terms and conditions US Citizens specifically are barred from some of their products. NS&I is owned by the UK Government.

Not that I want to buy any of their products, but I did get my MP to admit that this is potentially illegal discrimination - can't single out one nationality for specific treatment.

Interesting because I have savings in NS&I and I am a USC, but am also tax resident here, and am also a UK citizen, but citizenship never came up when I opened an account, just tax residence.

It's only for some of their products, IIRC e.g. investment bonds.

It's only for some of their products, IIRC e.g. investment bonds.

So I see. (I never knew that - see para 21). Thanks for the info.

https://www.nsandi.com/files/published_files/asset/pdf/investment-guaranteed-growth-bonds-brochure-print-friendly.pdf

When my husband and I were first looking into market and forex trading, my status as a USC limited what kind of account I could open.  My husband (UKC) was not restricted.  It isn't because the UK investment firm was singling me out.  It's because US laws prohibit me from certain types of investments, and the UK firm is diligent in enforcing that.

NS&I told me the reason was they don't want to bother with FATCA because it took too much time and money to comply and therefore wasn't a good use of taxpayer's money.