If,a person who worked for the NHS and paid into the pension scheme,then leaves and goes abroad,the Pensions Agency,permit the transfer of
benefits abroad,if the scheme in the other country is recognised by HMRC,as a Qualifying Pension Scheme.From 1st April 2015,there are restrictions put on this
and a transfer would only be allowed in exceptional circumstances.
However,if a person did not want to make a transfer anyway and just did nothing. ,would therebe disadvantages,would they have to pay more taxes etc?t
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NHS pension transfer abroad
I suggest you have a read of the NHS Pensions website (a search via Google) as there are major changes to the NHS pensions on 1st April 2015. This may or may not affect the person moving abroad as there are many factors to consider such as which NHS pension scheme they are currently in, what their age is etc. It may be as well for them to consider the options on offer. Once they have decided then a chat to another person who specialises in taxation of UK income paid abroad is then probably required which may of course have a bearing on the choices to be made.
NHS pension transfer abroad
Have they all ready moved or are they planning to? Other factors bearing on the matter are which country they are moving to and whether there are double taxation agreements between the UK- Country of Residence and QROPS Location-Country of Residence. There may be loss of "benefits" by moving from the defined benefits scheme to a QROPS (such as loss of a surviving spouse pension guarantee (in many cases just 5 years at 50% and age dependent ) or a guaranteed index-linked increase. On the bright side (!) on death in some jurisdictions, the balance of the pension fund in a QROPS can be left to the surviving spouse either as a lump sum or to continue paying monthly at the same rate. Other things to consider are whether this is their sole pension or if they have fractured pension pots from previous employers.
It can take 3 -6 months for a pension transfer of this nature to go through and there has been discussion of the UK Government locking down public sector pensions to stop transfers out. If they do not manage to the overseas pension in place the minimum they should do is transfer their regular GBP pension via a currency exchange company (Currencies Direct, Moneycorp etc) to avoid the poor exchange rates and high charges from high street banks.
It is a complex area - I'd recommend approaching a specialist ex-pat IFA licenced and based in the country they intend to move to. Thoroughly check out the IFA and the overseas pension trust before committing to anything. There are a lot of horror stories about scams resulting in loss of both the pension pot and receiving a high tax bill from HMRC for unauthorised withdrawals from pension funds.