The Pensioneer Trustee Company (Guernsey) Limited
T +44 (0) 1481 743760
Few of us prioritise pensions early in life but the reality is that the later you leave creating a pension, the more you will need to contribute to ensure that you have enough income on retirement. Starting a pension at 25 could create retirement income of double that of someone who starts saving at 40. RATS are a suitable and attractive pension for Guernsey residents.
RATS can be setup in two ways: bespoke RATS and multi member RATS. A bespoke RATS may be best for anyone with a pension of £150k+ while a multi member RATS is designed for smaller pension funds. The main differences between the two are how the scheme is structured, the amounts involved, and investment flexibility required. A multi member RATS is an existing scheme to which you can be added as a member and is well suited for startups and those with small sums to invest. The bespoke RATS involves a trust being newly created specifically for an individual or family and is more suitable to handling more significant sums or those requiring a wider range of investment options. With both types, a trustee will be responsible for looking after the money that is paid in.
Evidence may be required of approval from an authority in a transferring jurisdiction but, other than that, it’s very straightforward to make a transfer from an existing pension into a RATS. One of the main attractions of RATS is the wider range of investment options RATS offers, as compared to a conventional insurance, based pension scheme. The old style pensions offer a very restricted, and often expensive limited range of funds. RATS on the other hand can offer a full range of investments including, for example bonds, equities, funds as well as holding shares in unquoted companies, property and more esoteric investments. With a RATS it’s also possible to access investments that might usually be beyond reach due to high minimums.
Whether you opt for a bespoke RATS or a multi member RATS, when it comes to Guernsey pensions, the RATS is ideal for tax efficient pension provision.