Hong Kong pension rules mean later life planning needed

People with pensions based in Hong Kong or those looking to work in the city, need to be aware of issues relating to accessing their pensions.

This is especially important should they be considering returning to the UK or relocating elsewhere.

The issue centres upon the Hong Kong Government not allowing individuals to use emigration as a valid reason for an early withdrawal of pension funds.

Due to this many thousands of people from Hong Kong who have moved to the UK have not been able to withdraw their funds from their Hong-Kong-based pension. It is estimated that as much as £2.2 billion of pension assets may be affected.

This specifically affects those leaving the city to relocate to the United Kingdom under the British National (Overseas) programme, BN(O).

The BN(O) scheme offers Hong Kong residents a pathway to UK citizenship to those who have relocated to the UK.

Many Hong Kong residents, past and present have pension funds under the Hong Kong Government’s, Mandatory Provident Fund (MPF) retirement saving system.

The Hong Kong Government has said that MPF members cannot use their BN(O) passport or visa as evidence for an early withdrawal of funds from the scheme.

Holders should be entitled to access their funds after gaining full UK citizenship, which they can qualify for after five years or when they reach the retirement age of 65.

The issues arising around pensions in Hong Kong reiterates the importance of having a long-term plan for later life planning.

One that ensures an individual’s money and investments can move freely between countries should the person wish to relocate for work or for retirement.

Considerations need to be made regarding legislation between different countries and the respective rules.

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Posted in Exports.