Hello All, looking for some opinions on Pilar 2 and moving to UK. I know, there are other threads.
Age, 58. Can/will stay employed until I’m 60, but then due to circumstances, will move to UK. My partners Pilar 2 will be withdrawn and invested. They are only 51 though, and will continue to work in UK, whereas I will retire.
However, what to do with my Pilar 2?
If I get to 60, I can make one withdrawal (eg; 1k) then my (employers) pension company will be responsible for my pension, whether I start regular withdrawals or not. Plus points: bulletproof pension provider, will continue to pay my partner a (decent) pension in the event of my death. So not spectacular, but I could put in another 100k before 60 and get the tax benefit as well. I can easily live off savings/investments/part time work until 65.
Another option is withdrawal all the pension in cash, and suffer the withholding tax. My pension company says they release the money as soon as I deregister in CH and tell them I’m going to UK. Not sure what the HMRC do in this case, if I’m de registered from CH but not yet resident in UK? Seems a grey zone to me.
There is also that health insurance commitment, however pretty sure living in the UK covers that, and I can pick up a part time job if needed for NI purposes.
Other info, UK NI paid up (over 35 years), CH currently 19 years AHV, should get to 21 years.
Just for your info as regards State Pensions, most countries ( except France ) are raising the age upon which you can claim your State Pension to 68, so you need to get away from the 65 cliche with State pensions even if company pensions are still claimable at 65.
Again this is something you need to check as there may be a continued commitment to pay Swiss health insurance. You might be eligible for an exemption, but you have to meet certain conditions and apply for it.
I could resign and take the funds, less withholding tax. Age doesn’t matter, but leaving the EU does.
However, I already have a large amount invested in the markets, more than the pension. My partner will also have only stock market investments ( plus full UK state pension and 20 years AHV ).
So the idea of sticking with the Swiss pillar2 for me is spreading the risk and guaranteeing an income come what may.
What’s the downside with withdrawing all of the Pillar 2 as cash?
What’s the alternative? If you withdraw as pension, presumably, there’s going to be a fairly high tax on income in the UK. Though on the plus side, if you receive an annuity, you get a guaranteed income for life.
Downside of taking the cash is the 11% withholding tax (Basel) or less if transferred in whole to one of the Schweiz companies first.
However to avoid the UK taxing it as income during the process, I’d have had to deregister in CH, and stay on as a tourist to get the money in the bank before moving to the UK, so 3 months.
I don’t know how, if I start drawing the Pilar 1+2 pension from CH when I get to say 67, the tax is paid. The Pilar 2 say they can pay a lump sum + annuity etc.
An alternative would be transfer it into Finpension in full, perhaps better performance than my employers company.
To be honest, it’s more questions than answers at the moment.
I’m also talking about the annuity income in retirement. In the UK pension income is taxable just like any other income. So you need to consider whether your UK tax rate is going to be higher than the 11% WHT.
Yes, depending on when I start to take the annuity, the tax rate will be 20%.
Eg: if I start all pension income at 67, I should get, in theory, UK state pension, CH Pilar 1, a UK private pension, the Swiss Pilar 2. All in @50k
According to the HMRC, deduct personal allowance leaves 38k taxable so approx 8k tax.
All ballpark figures.
I will ask my pension company if they pay out the annuity WHT free. We only discussed the complete withdrawal so far.