There are a number of reasons why a UK citizen opts to work or live in another country. Relocating abroad has its own pros and cons. Depending on the worker’s resourcefulness, dealing with his old pension can either be just a small task or a drawback of relocation. When a worker decides to leave his old company and work for another one abroad, handling payments made in the old firm can be tricky. When the funds aren’t managed immediately, the worker’s old company can convert the sum into a frozen pension. When a pension is frozen, it will be twice as difficult to handle, access, and be used. Depending on the regularity and length of the previous pension payments, this can be a massive financial blow.
When the worker’s previous company freezes his pension plan, the funds become restricted. The benefits and progression of the pension scheme are affected as well. In accordance with a universal company policy, the worker’s previous employer must fulfill his or her pension commitments. The benefits associated with the pension must be delivered, too. However, these actions are only done if a claim is made or an investment takes place. If the worker forgot to hand his old pension plans, his old company has the leverage to freeze the funds.
Often, especially if the old employee has relocated, companies just freeze the funds to avoid paying for the expenses of an abandoned pension plan. This dubious strategy has grown to be one of the most used practices of companies that avoid extra work or security. This is also the reason why ex-employees go into a great deal of pain just to unfreeze the pensions. Thankfully, there are firms that can help a worker with a frozen pension, even if he’s already living abroad, to handle situations like this. These firms are well-versed with frozen funds. They are also knowledgeable about the different types of pension schemes.