Ground-breaking new rules that give flexibility to how you use your pension pot kick in this month. We look at the implications for anyone moving or buying property abroad

From 6^th April, thousands of Brits will have newfound freedom to use their pension pot to fund an overseas property purchase or relocation, however experts are warning that anyone with doubts about how to ensure a secure financial future should take independent advice.

“Of the half a million or so Brits who will be eligible for the new pension rules, many will be thinking about retiring somewhere sunny or buying a second home,” said Angelos Koutsoudes, Head of OverseasGuidesCompany.com. “Of course, for many of these people, buying a retirement annuity may still be the most suitable option when a regular secure income is needed. There is a danger though that some may be tempted to release their funds as cash or in stages as income drawdown when in fact, these are not the most suitable options for them, especially if the tax implications are not understood.”

There also the thousands of existing expats to consider, many of whom who have one or more personal pensions in the UK. Their options will include QROPS, which bring with them tax and currency benefits – again an avenue, like SIPPS, that will suit some but not all people.

Added Mr Koutsoudes: “In short, financial planning as an expat is more complex than when you are a UK resident, with more variables to consider, including exchange rates, and more pitfalls to avoid. For this reason, seeking advice from a specialist financial advisor before leaving the UK is highly advisable.”

Meanwhile, next year could see further flexibility given to expats who already have an annuity, following Chancellor Osborne’s announcement at the Budget that the government is working towards measures allowing annuities to be exchanged for cash without a punitive tax charge.

Cashing in an annuity won’t suit all retired British people abroad, but for those who worked for a number of firms and gained a number of personal pensions, it might be a welcome option. Applicants will have the choice of taking a cash lump sum or taking regular withdrawals, and there will still be tax implications, according to each individual situation.

According to Chancellor Osborne, this new freedom could be in force in April 2016, after a year of consultation, however there is no guarantee given there is a general election in less than two months.

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