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Old 09.10.2018, 13:54
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Purchasing UK home after leaving Switzerland

Hi all,

I've been living in Switzerland for two years now and hope to stay for another few at least. However, my goal of buying my own home in the UK (when I eventually return) has been on my mind lately.

I have been looking at the various house purchasing threads on here, and have reached a few conclusions that it would be great to verify with someone who has more knowledge on the topic.

Firstly, I'm a bit concerned that my credit rating will have suffered significantly due to my long absence. I have no UK credit cards or anything similar still active back home. However, I have a couple of bank accounts as they are still linked to my parent's address (that's where I lived before the move). Has anyone had experience with acquiring a UK credit card while not being a resident? Does it even make sense? Has anyone ever had a problem getting a loan/mortgage when returning home? Perhaps there's an alternative way to revive my credit presence in the UK whilst here, but I fear that the whole concept may be at odds with living in another country.

Secondly, I'm interested in the use of my Pillar 2 as a deposit for the house. It seems that I can use it in the UK if it's soon after my return, and I'm not employed somewhere else beforehand. However, I think not having a job when applying for a mortgage in the UK would not be looked at favourably by lenders. Am I missing something?

I know Brexit is just around the corner and will probably have an impact on the pension stuff. However, I'd just like to get an understanding of the rules as they stand now. Let's just pretend Brexit isn't happening for a few minutes


Thanks in advance!
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Old 09.10.2018, 13:57
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Re: Purchasing UK home after leaving Switzerland

Buy a house now?

Sorry, can´t help you with the rest. Bought a house in Germany and having no Schufa scoring, salary, savings and portfolio got me a mortgage.
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Old 09.10.2018, 14:10
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Re: Purchasing UK home after leaving Switzerland

As much income and deposit, as little debt as possible then speak to a mortgage advisor - one attached to your UK bank would be a start but not the be all and end all. As for credit cards in the UK... talk to your UK bank.

Unlikely to lend if no income. Not sure about time limit/ conditions for pillar 2. You could also sign up for an online credit report but again your bank/ advisor would probably get it for free.

Get yourself a UK based financial advisor. Better than randoms on the internet.

Last edited by RufusB; 09.10.2018 at 14:15. Reason: Clarification
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Old 09.10.2018, 14:24
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Re: Purchasing UK home after leaving Switzerland

As far as I know, credit rating never came into it for me.

We bought 2 houses. One ages ago, then sold & bought again with a “top up” mortgage (having already bought the first one out).

The issue was getting a bank to mortgage you when you are a non-DOM. Eventually we had to go through a broker who fixed one up with NatWest. It helped that they have been my bank since student days... maybe that’s why credit rating wasn’t mentioned?

The challenge is that we miss out on favourable interest rates (read shafted) and there is no tax relief on UK mortgages in CH - it is simply viewed as a debt. And for the record you should declare the house as an asset.

I also think that you may hit a “Brexit” wall, in that they may not wish to lend to you as someone living abroad, as you could be a high risk due to the unknowns of Brexit. But that’s just an opinion.
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Old 09.10.2018, 15:03
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Re: Purchasing UK home after leaving Switzerland

Not too sure about the "using your 2nd pillar as a deposit" aspect.
Here in Switzerland 2nd pillar for a Swiss house is ok. (Not for a UK house), but I thought that with the current UK/CH pension agreements you would have to transfer your 2nd pillar to a recognised UK pension fund.
Could be wrong., but I remember seeing something similar when I was looking to do another thing.
As you have only been here a couple of years, perhaps they will just let you take the cash minus tax - but would check out thresholds and other such constraints.
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Old 09.10.2018, 15:08
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Re: Purchasing UK home after leaving Switzerland

Also depends on your age!!!
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Old 09.10.2018, 15:13
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Re: Purchasing UK home after leaving Switzerland

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Not too sure about the "using your 2nd pillar as a deposit" aspect.
Here in Switzerland 2nd pillar for a Swiss house is ok. (Not for a UK house), but I thought that with the current UK/CH pension agreements you would have to transfer your 2nd pillar to a recognised UK pension fund.
Could be wrong., but I remember seeing something similar when I was looking to do another thing.
As you have only been here a couple of years, perhaps they will just let you take the cash minus tax - but would check out thresholds and other such constraints.
I think you can take your pension and buy/deposit a UK house if you are going to live in it - primary residence. Not as a holiday home / extra house..
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Old 09.10.2018, 15:18
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Re: Purchasing UK home after leaving Switzerland

That was my understanding too John.

Just to be clear, I'm planning on buying the house when I return permanently to the UK.
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Old 09.10.2018, 15:26
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Re: Purchasing UK home after leaving Switzerland

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Not too sure about the "using your 2nd pillar as a deposit" aspect.
Here in Switzerland 2nd pillar for a Swiss house is ok. (Not for a UK house), but I thought that with the current UK/CH pension agreements you would have to transfer your 2nd pillar to a recognised UK pension fund.
Could be wrong., but I remember seeing something similar when I was looking to do another thing.
As you have only been here a couple of years, perhaps they will just let you take the cash minus tax - but would check out thresholds and other such constraints.
Pillar 2 is the pension related to being employed. My understanding is that if I were to become employed in the UK, that pillar 2 would be transferred to the UK equivalent. That's why the pillar 2 usage must happen before that, as the UK has no such rules about using pensions for purchasing a house.
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Old 09.10.2018, 15:31
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Re: Purchasing UK home after leaving Switzerland

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Pillar 2 is the pension related to being employed. My understanding is that if I were to become employed in the UK, that pillar 2 would be transferred to the UK equivalent. That's why the pillar 2 usage must happen before that, as the UK has no such rules about using pensions for purchasing a house.
I think (and I'm crap at this stuff) .. When you stop your employment here, you transfer the pension out of your employers pension plan into a sort of holding account.. It can either stay there until pension time, transfer to another recognized pension scheme or be used for a purchase.. or a mixture of the above.
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Old 09.10.2018, 15:32
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Re: Purchasing UK home after leaving Switzerland

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Pillar 2 is the pension related to being employed. My understanding is that if I were to become employed in the UK, that pillar 2 would be transferred to the UK equivalent. That's why the pillar 2 usage must happen before that, as the UK has no such rules about using pensions for purchasing a house.
That's incorrect, Swiss pension cannot be transferred to CH, depending on employment status you may be a able to take the entire sum as cash. If you can't you can still use it towards a deposit.
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Old 09.10.2018, 15:44
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Re: Purchasing UK home after leaving Switzerland

Can you use your normal voluntary UK pension as a deposit towards your house? (for example if you are a normal uk citizen - not having worked abroad) or is is this a special case?

Regarding the credit - I would maintain a presense in the UK and buy stuff on zero percent credit and pay them off on time - keep registered at your parents place and keep in the NHS.
Now I am out of it all - it will take you a long time to build up a decent credit rating again if you let it lapse.
Keep your uk banks moving - ready for the day you return - also maintain the national insurance contributions minimal payments.
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Old 09.10.2018, 15:52
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Re: Purchasing UK home after leaving Switzerland

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Can you use your normal voluntary UK pension as a deposit towards your house? (for example if you are a normal uk citizen - not having worked abroad) or is is this a special case?

Regarding the credit - I would maintain a presense in the UK and buy stuff on zero percent credit and pay them off on time - keep registered at your parents place and keep in the NHS.
Now I am out of it all - it will take you a long time to build up a decent credit rating again if you let it lapse.
Keep your uk banks moving - ready for the day you return - also maintain the national insurance contributions minimal payments.
No you can't use pension funds to buy property unless your above 50 & either take a 25% tax free lump sum or take taxable income out & use that.

Using NHS services is illegal for non residents.

Your Banks need to know you tax residence at all times, you risk having the account frozen if you give false information or fail to update.
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Old 09.10.2018, 15:58
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Re: Purchasing UK home after leaving Switzerland

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I think (and I'm crap at this stuff) .. When you stop your employment here, you transfer the pension out of your employers pension plan into a sort of holding account.. It can either stay there until pension time, transfer to another recognized pension scheme or be used for a purchase.. or a mixture of the above.
It gets moved into a Freizugigkeitkonto in a Swiss bank. (Once you leave the job)
The usual rules apply - you can use this for house (ch) business or take it out when you are 60 or on over 80 % invalidity.
They will only release it out of the country when they receive notice from the Gemeinde and in the case of countries with pension agreements with Switzerland - they follow these.
If you move to Belarus for 3 weeks before going to the uk - you can get cash out. It is messy, but doable.
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Old 09.10.2018, 17:34
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Re: Purchasing UK home after leaving Switzerland

So, we stayed in CH for just under two years. We had a mortgage within 6 months so it is doable. We kept bank accounts open and had credit cards, although they weren't really used. The longer you stay away the more this may become an issue, but as long as you keep them open you'll still have a footprint.


What was important in getting sorted so quickly was that Mrs TH went back with a job that had no probation period. If she had the usual 6 months, say, then we would have had to have waited for that period. If you don't have a job you'll have to wait at least 6 months before getting a mortgage. We were still limited in who would lend, but got a decent rate.


From memory the Pillar 2 I think part of it has to be transferred into a blocked pension account, then the rest is released when you purchase a main residence. The pension scheme wouldn't accept transfers so we just got the cash. I don't think you can use it as a deposit though. We sent the completion statement through, released the cash and used it as an overpayment.


So, it's doable. Just keep a credit footprint and use a good mortgage broker.
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Old 09.10.2018, 18:17
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Re: Purchasing UK home after leaving Switzerland

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I think (and I'm crap at this stuff) .. When you stop your employment here, you transfer the pension out of your employers pension plan into a sort of holding account.. It can either stay there until pension time, transfer to another recognized pension scheme or be used for a purchase.. or a mixture of the above.
Yes. It's what we did.
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Old 09.10.2018, 18:21
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Re: Purchasing UK home after leaving Switzerland

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Using NHS services is illegal for non residents.
Er no. You might get a bill after the fact but if you turn up at A&E with something snapped, oozing, crushed or burned (etc) they're not going to demand a passport or insurance before they treat you.

If you go to your family's GP they will see you as a visitor or refer you to somewhere that can.
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Old 09.10.2018, 18:31
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Re: Purchasing UK home after leaving Switzerland

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Er no. You might get a bill after the fact but if you turn up at A&E with something snapped, oozing, crushed or burned (etc) they're not going to demand a passport or insurance before they treat you.

If you go to your family's GP they will see you as a visitor or refer you to somewhere that can.
This is the second time in a couple of days that you have taken my answer out of context. There was no question of registering as a visitor, this is what I was actually replying to. Time to repeat the Woody Allen quote on School Teachers I think


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keep registered at your parents place and keep in the NHS.
EDIT Emergency treatment would of course be covered by a Swiss EHIC card with the bill being sent to the your Swiss insurers, who would then be responsible for payment, which they may or may not ask for reimbursement depending on Accident / Illness / Franchise

Last edited by fatmanfilms; 09.10.2018 at 18:47.
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Old 09.10.2018, 19:23
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Re: Purchasing UK home after leaving Switzerland

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This is the second time in a couple of days that you have taken my answer out of context. There was no question of registering as a visitor, this is what I was actually replying to.
You said using the NHS was illegal for non residents. I said it's not - unless you mean if you travel to the UK with the express purpose of using the NHS rather than just being on holiday and needing treatment in an emergency. If you did mean that, you didn't say it. As it stands, your blanket statement is inaccurate. I added the GP visitor thing as a BOGOF. How did i take that out of context? In what way are you using the word context?

Don't get me started on Woody Allen. If it's not Annie Hall I don't want to know...

You seem to have a bit of an issue with teachers. As I've often told my students, teachers are people too. We've been people longer than we've been teachers and that's not all we are.

Last edited by RufusB; 09.10.2018 at 19:31. Reason: Ah... Clarification.
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Old 09.10.2018, 19:32
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Re: Purchasing UK home after leaving Switzerland

My OH felt the same way as you as he didn't want UK property to increase, and then when returning to the UK find that we had been left behind and couldn't afford another house.
I know it was a while ago but we had kept our UK bank accounts - we just went into the bank and said that we would be returning to the UK soon from Switzerland. We had to show proof of salary etc and were charged a slightly larger percentage but we basically said that we had a large deposit and it was quite straightforward. We just kept the house empty and used it for UK holidays until we moved back. It might have helped that we had kept proceeds from a house sale in a savings account with them.
When you go back for a trip go into your UK bank and have a word.
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