What happens to pension?

[babynelly2010]

Hi, my work with local government is finishing in about a week. I quit to go self employed. I am here on visa and will probably return to my home country in 2 years or so. What options will I have with my pension that I received while working in the council? Could I just take it out? Or I will have to wait until I am certain age to get out while I am living abroad? What is the norm in the uk on this subject?

Firstly, I would advise you to contact your employer and get them to give you the details of the pension provider/administrative team supporting the Pension fund. Give them details of your new forwarding address so they don't lose track of you in the future. Anytime you change address keep the pension administrator updated.

You need specialise pension/financial advice regarding what to do with your pension as there are several possibilities. If in doubt it is always best to leave the pension "frozen" (at least until you get good quality advice) ie no further contributions going in as you've left the company, but the pension fund continues to grow over the years until your retirement.

Don't be tempted into withdrawing the money before you can get legal advice as it depends on your age, circumstances, contributions made to date, type of pension etc. You'd probably get an insignificant lump sum which would then be tax deductible because pension contributions go into the fund gross but withdrawn as taxable income at your normal tax rate.

You will only get a refund of your contributions if you paid into the Local Government Pension Scheme (LGPS) for less than 2 years. If you have more service than that, your benefits will be deferred (frozen) and will either become payable from your state pension age (or you can take them at a reduced rate from age 55), or you can transfer them to a new pension arrangement. You may be able to transfer them to an arrangement in your home country but as Daisy said you should take financial advice before doing this (there can be tax charges when transferring to an overseas arrangement).