UK Quantitative Easing Encourages a ‘Pension Exodus’

As the UK Treasury Select Committee says it wants pensioners ‘compensated’ for the adverse effects of the Bank of England’s (BoE) quantitative easing (QE) programme, it is revealed by leading personal finance experts that “an increasing number of retirees” are seeking to move pensions out of the UK to protect their retirement funds against these negative consequences.

Nigel Green, chief executive officer (CEO) of the deVere Group, who has often publicly spoken of the crippling effects of QE on pensions, said: “The select committee backs what we have been saying for a long time: QE has permanently damaged the retirement income for millions of pensioners.”

Like many, Green argues that QE can be disastrous for pension funds as it can fuel inflation, meaning more bad news for savers who’ve already seen their funds dwindle due to high living costs and low interest rates.

Similarly, someone who is about to retire could find that their future income will be adversely affected by QE as the value of annuities purchased at retirement is based on return from gilts. The demand for these gilts may soar as the BoE buys them in the easing process, which pushes the price up but the yield will reduce.

With such gloomy forecasts, expats – who have significantly more opportunities to safeguard their wealth from such UK policies – are “increasingly likely” to move their pensions out of the UK.

“With retirees becoming more and more aware of how QE will adversely impact their financial security in retirement, we have seen a dramatic hike in the number of people who are contacting us to seek advice on transferring their pensions out of Britain into HMRC-recognised Qualifying Recognised Overseas Pension Schemes (QROPS),” confirmed Green. “QE is another example of how there are fewer incentives than ever to keep your money in the UK.”


Related reading