Key Benefits of Transferring UK Pension to Canada (2023)

If you have moved to Canada from the UK permanently, but still have a previous private employer pension in the UK, you may be wondering what the key benefits of transferring it to Canada are.

There are several key benefits to transferring a UK pension to Canada, including:

  • You have access to a wider range of investment options. UK pension plans typically have a very limited range of investment options compared to what is available in Canada. By transferring your pension to Canada, your pension will become either a RRSP (Registered Retirement Savings Plan) or RRIF (Registered Retirement Income Fund)- depending on your age. Within this account, you will be able to choose from a wide variety of investment options which includes stocks, bonds or cash.

  • Currency diversification. Transferring your pension to Canada also provides currency diversification which can help protect your hard-earned savings against currency fluctuations. Your investment will be transferred to Canadian Dollars and will be much easier to manage and plan for the future of your investment.

  • Tax benefits. Canadian pension plans may offer more favorable tax treatment than UK pension plans. For example, Canadian Registered Retirement Savings Plans offer tax-deferred growth which means that any investment gains are not taxed until the money is withdrawn. When it comes time to make withdrawals in retirement, the amount of tax that is payable will be dependent on your Canadian income. It will also make your tax planning much easier because everything will be on your Canadian tax return in Canadian Dollars.

  • Potential for higher lifetime income. There are products available in Canada for your UK pension which provide guarantees on your investment and protect your savings in the event of market downturns. This will ultimately provide a higher level of financial security in retirement.

  • Overall flexibility. With your UK pension in Canada, you will be able to access your funds once they are in Canada (if needed), as long as your age 55 or older.

It’s important to note that there are costs involved with transferring a UK pension to Canada as you will more than likely have to get a qualified UK financial adviser to review your pension before it is allowed to be released.

It’s also important to note that transferring a UK pension to Canada may not be suitable for everyone and you should consider your individual circumstances and objectives before making a decision.

In conclusion, transferring a UK pension (QROPS) to Canada can provide a range of benefits which some are listed above. You can read more about other benefits and advantages of transferring your pension by clicking here.

You are more than welcome to reach out to us to chat about your pension and answer any questions that you have. We do not charge any consultation fees.