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Pensions
Planning for your retirement
People often underestimate the importance of saving into a pension scheme early on in life and the power of compound interest is often overlooked. A simple example can be used to highlight this. John is 25 and Jane is 35 and both want to start their pension today with the aim of retiring at age 65. They both save £250 per month and invest their money into a medium risk portfolio, because of compound interest, John will receive much more in investment growth than Jane.
Assuming an investment growth rate of 5% per annum, John would have accumulated a pension pot of £253,650.83 whilst Jane would have only accumulated £154,868.03 into hers. Those extra ten years have allowed John to benefit from over £133,000 in investment growth whilst Jane only benefitted from £64,868.
www.abacus.gi/pensions
By Daniel Pitaluga, Senior Associate at Abacus Financial Services Ltd
Gibraltar offers pensions to both the local and international market, including a Gibraltar and Malta
QROPS and a QNUPS, which, although, still in its early stages of development, is well on its way.
A QROPS is a Qualified Recognised Overseas Pension Scheme; simply, this means that it is an overseas scheme that meets certain HMRC requirements. A QROPS offers an efficient and effective solution for British expatriates who have worked in the UK and wish to transfer their pension overseas.
Gibraltar is one of the most highly regulated and respected financial centres in the world and together with Malta, is a leading jurisdiction for international pen- sions. Providing QROPS since 2012, it is also one of the few jurisdictions that has in
the past received formal notification from HMRC to confirm that its QROPS meet the UK requirements.
A review of existing pension arrangements is a significant area of consideration in tax and retirement planning for anyone who has contributed to a UK pension, and has now moved abroad. A QROPS can enjoy many tax benefits, such as a pension commencement lump sum of up to 30%, a very low rate, if any, of income tax on your pension income after age 55, no tax on the income and growth on the underlying investments in your pension fund, no Gibraltar inheritance tax on your pension benefits, and, where applicable, can be a great method for UK Lifetime Allowance planning.
In addition to a QROPS offering, we are in the process of developing a Gibraltar QNUPS proposition which is a superb pension vehicle that, for the right individual, can further complement their pension planning arrangements.
www.gibraltarinternational.com
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