University lecturers and staff have already seen cut backs affecting all areas of their day to day work, however it has come to light that really quite dramatic pension cutbacks are now being considered across the Universities Superannuation Scheme (USS) members.
Final salary schemes have now been stopped for good, and with the deficit of £7 billion growing day by day, other measures are set to be introduced over the coming 12 months which are likely to cause more strike action, and much discontent.
The most likely changes will relate to the agae at which a pension can be accessed – set to be extended by five years – and the benefits received – set to be gradually scaled down.
As of April 2015, there will be no choice for any alternative. The Government will now prevent the transfer of any public sector scheme into anything more beneficial for the saver, whether it is at home or abroad.
This will come as a particular blow to those already living abroad, or planning to retire away from the UK. There is still time to consider all available options, but with just seven months remaining until the door shuts completely, it’s running out.
Many expats that hold University Pensions are transferring to QROPS.
QROPS were introduced in 2006 for British expats to keep their savings close by, but the schemes have since been found to offer extensive benefits which have never and will never be available all the time retirement funds remain in the UK.
As well as being able to choose the currency and avoid exchange rate fluctuations, tax liability on withdrawal can be hugely reduced too. There are a whole host of other benefits available, depending on which scheme and which jurisdiction is selected. Retirement can be taken at 55 in many cases, and with 30% available as a lump sum immediately, it’s easy to see why many members of the USS are looking elsewhere to secure their future.
QROPS have increased in popularity hugely since their introduction, and although the public sector will no longer have access to these schemes come April, all other pensions will still be able to benefit from the extensive advantages that can be found by taking savings away from the unstable UK market.