A fairly tedious conversation over dinner last week turned to pensions and whether or not, for the present company, they alone would be enough to live off. I immediately thought of an article I read recently about a 71 year old who was charged with growing cannabis for commercial use in his shed in Queensland. His defense was that he could not afford to live off his pension alone.
“There’s no money. You can’t live off the pension. I can’t work. I had a shoulder reconstruction,”
Alan Hogan, 71 year old Australian sentenced in 2012 for growing cannabis for commercial use.
On the surface it’s a funny story, and perhaps his defense is a fabrication. Think a little more deeply about it though, and fast forward as much as you need, to retirement age. Will your pension support you? Isn’t it easy to imagine yourself in a situation where you can’t physically work? Perhaps you could work, if you wanted to but no one will hire you because of your age. Is it safe to hope that your children are in a position to support you? What if you live to be a hundred and twenty!?
The other idea that struck me whilst imagining myself in this hypothetical situation, is that I could move somewhere where the cost of living is cheaper. In theory, this would stretch my pension further.
Is it possible to transfer a pension abroad?
It is entirely possible to move overseas and take your pension with you, and there are schemes set up to help you do it. A Qrops pension, is an HMRC-recognised offshore pension scheme that allows non-UK residents to transfer their UK private/company pension offshore, tax free. Predictably, it’s not tax free for everyone. The tax implications come into play, if you have a particularly large pension, or you draw down large lump sums in one go. Always consult a specialist to find out how the rules apply to your situation.
We often live in areas where the cost of living is high, because that’s where the work is. Something to take into account is that moving to an area where the cost of living is substantially lower, can extend the buying power of your pension. It could even bring down your retirement age.
Even if moving towards a lower cost of living is not for you, hopefully you’re working on additional investments to complement your pension, so you don’t have to turn to cannabis farming in your seventies.