Public Sector and Foreign Office Workers Hit by Pension Changes

Changes announced to U.K. pensions in the 2011/2012 budget may prove highly damaging for those approaching retirement age, especially those working in the public sector. For those living abroad though, there may be a solution.

London, UK (Pryce Warner International) March 23rd, 2011 - The first major change announced on Wednesday is that the maximum annual pension contribution allowance will be dropped from £250 000 to £50 000. This is bad news for high earners hoping to top up their pensions in preparation for their autumn years.

Another change announced is that the government will follow the recommendations made by the Hutton report earlier this month to end final-salary pension schemes for public sector workers.

The budget is notably coy, no doubt due to the ongoing negotiations with public sector trade unions, as to what the replacement will be and whether or not people that currently enjoy final-salary pensions will retain them.

No specifics are given other than that the full proposals will be laid out in the autumn. However the Hutton report recommends that this change come into effect from 2015.

Overall this is doubly bad news for the public sector and the 14 000 British diplomats and foreign office workers based abroad. Not only will they likely lose their final-salary pensions but the drop in the amount they can top up themselves means potentially less financial security once they retire.

A recent trend amongst not only foreign-based civil servants, but also British expats generally, is to retire abroad and move their pensions in the process. Austerity measures in Britain have contributed to this trend and the announced changes will likely fuel it further.

Pryce Warner International Group provide International Asset & Investment Management, Independent Financial Advice & QROPS Overseas Pensions.

-------------------------------
By: Aneil Fatania
Financial Editor
Pryce Warner International Group
For any corrections of factual information contained within our news items please contact our editor.
Email: af@prycewarner.com
Skype: newsdesk-pwi
Telephone: U.K.- +44 20 3364 5016 or Monaco - +377 97 97 29 22