Rob, please tell us a little bit about yourself and your background. What services does Independence Wealth Management offer?
Independence take care of cross-border clients with a UK connection by helping them get the most from their money. We provide a combined asset management and tax annual service, with separate briefing courses. Our courses brief people on what they need to know to make good long term financial decisions. My background is:- grew up in Africa; Royal Air Force; engineering degree; transition to finance, and professional qualifications in tax, investments, and planning in US and UK; currently CEO at Independence.You recently published a short book titled 'Two State Pensions are Better Than One' – what prompted that decision?
We wanted clients to take the tactic seriously because it is a hugely effectively way of accumulating enough capital for independence, and yet commonly people pay it no attention. It’s very cheap, easy to implement, takes no management and is simple to understand. Most State Pensions – even basic ones – are worth GBP 300k to 400k and cost only a third of that to buy.
The book describes the process of collecting State Pensions from more than one country. Can you explain why and how expats might go about doing that?
Members of ExPatFocus will be people who’ve left one country and are working in another. It’s simply a matter of using the respective rules to maximise the State Pension entitlement in both. For instance the UK and many other countries allow you to buy added years of credit even when you are no longer resident, for an amount which is most worthwhile. Some clients can collect State Pensions from three countries.
Are there any practical problems associated with this idea?
Yes, many little practical problems, which we can help with. Usually, you have to have been employed in each country. There are sometimes interaction problems. The USA for instance wants to reduce their Social Security payments for people who have pensions from sources which were not taxed originally by the USA: they call this the Windfall Elimination Provision. There have been instances of USA pensions being cut after an interview at the local US embassy. However the WEP does not apply for State funded pensions, and it needs skill and knowledge to convince the Social Security people to stand down.
Clients in Australia may wonder what to do with this idea since in that country there is no Social Security pension for those with enough ‘means’. In one case, we had a couple retiring from Australia who now intend to put some months of part time work in Holland before really relaxing in Italy, to pick up a Dutch pension worth Eur 450k for Eur 115k.
What does the book cost and where can readers buy it?
£12.50 from our main website iwm.eu.com.
If you had to give one piece of financial advice to our readers at Expat Focus, what would it be?
Wealth managers are often asked to increase the amount of money people can spend – by better investment performance, less tax, less charges, business ideas, there are lots of techniques. When wealth managers ask “is the increased spend you now have worthwhile?” we tend to get blank faces, and yet we know from research that twice the spend doesn’t mean twice the fun. Yet this is the heart of our current human condition, at least when it comes to money. Currently, we can’t have a world that grows incessantly, because we’re hitting limits. We are all being asked to live sustainably, and that requires us to notice what we spend, what the effect is on others, and what result we got. That’s the one piece of advice: notice what result you got from what you spent.
What are your plans for the future?
I think that’s a personal question, not an Independence one. I think there’s a need to educate people on environment change because it’s gone past critical. Perhaps I can do this best locally, as a councillor.
What do you do to relax?
Meditate. Read books. Any kind of sport. I’d like to take my wife to Italy and the Amalfi coast.
Rob Noble-Warren is the Director of Independence Wealth Management Ltd., Chartered Tax Advisers and Asset Managers (authorised and regulated by the Financial Services Authority).