QROPS Pension Transfer Overview


A QROPS Pension Transfer is the transfer of a UK pension into a Qualifying Recognized Overseas Pension Scheme (HMRC Approved Schemes).

If you are leaving the UK or are already living abroad and have a UK Pension Plan, you may qualify for a QROPS Pension Transfer.

The QROPS Pension Transfer scheme needs to be an HMRC approved scheme and generally, individuals prefer to transfer their pensions to a stable offshore jurisdiction with similar financial principles to the UK (e.g. Channel Islands).

Who Qualifies for a QROPS Pension Transfer?

In order to qualify for a QROPS Pension Transfer you need to be a non-tax resident for 5 years. You can make a QROPS transfer from 12 months before you leave the UK. Once you have been a UK non-tax resident for more than five years your QROPS will no longer be regulated by HMRC. The QROPS is then subject to the laws of the relevant overseas jurisdiction where your funds now reside.

Read further below about the jurisdiction of your chosen QROPS and why it should be carefully considered.

What are the benefits of a QROPS?

QROPS benefits can be summarized as follows:

·         Avoidance of IHT on the pension fund.

·         The ability to leave 100% of your pension to a nominated beneficiary.

·         No need to purchase an annuity (although this is still possible)

·         Protection against future creditors.

·         Improved investment flexibility

·         A 25% tax free lump sum.

·         Choice of currency.

·         Take income more tax efficiently from your pension.

·         In addition, you are no longer required to purchase an annuity by 75, or face an 82% tax charge!

There are various options regarding investment flexibility of your QROPS Pension Transfer scheme. Some schemes allow you to choose the investments yourself, while others require a financial institution to choose the investments on your behalf. It all depends on your requirements and where you setup your QROPS.

In most instances the benefits of a QROPS Pension Transfer, make the transfer of a pension to a secure offshore jurisdiction an absolute “no brainer.”

Yet, it is extremely important to note in some of the older pension plans, especially final salary scheme plans, it may not be in your best interests to transfer your pension to a QROPS. This however, should be discussed with a suitably qualified QROPS adviser. Even if you have a final salary scheme pension plan, you should seek a professional opinion on whether or not a QROPS is beneficial.

The Safety of Your Pension in a QROPS

There are two issues to consider that impact the security of your pension. Firstly the jurisdiction of the QROPS and secondly, the underlying funds in the QROPS.

1. QROPS – Jurisdiction

A major reason for choosing the Channel Islands as a jurisdiction for your QROPS Pension Transfer, is due to the financial stability and security that they offer. The Channel Islands are extremely regulated and have strong investor principles, similar to the UK.

Thus, the Channel Islands are a safe and secure jurisdiction with a strong financial history.

2. QROPS – Underlying Investments

The greatest risk with a QROPS is the choice and performance of the underlying investment funds. However, while your fund is in the UK it is subject to the same risk. Many pension holders in the UK have seen the values of their pensions dramatically decline as the underlying funds have underperformed.

Although QROPS schemes do not have capital protection or capital guarantees, it is possible invest in funds that offer this. Thus, deciding on the underlying funds is an extremely important decision. It is important to note that a QROPS Pension Transfer, offers greater investment flexibility and fund choice.

What is the Cost of a QROPS?

When you consider the benefits of a QROPS the costs are not a significant factor. The fact that you can pass on your pension to your beneficiaries should something happen to you, is a major reason that cost is not a factor. It is better that your beneficiaries receive something rather than nothing.

That being said, the cost of a QROPS is normally made up of a fixed cost as well as a variable cost. Thus, the larger the value of the pension being invested, the lower the costs are as a percentage. You should expect a good QROPS scheme to cost around 2% p.a. on the value. If you consider that this cost is generally already recovered in the tax saving of a QROPS, it really proves the benefits of a QROPS Pension Transfer, and why it is often a “no brainer.”

How do I go about using a QROPS Pension Transfer?

Transferring a UK pension or “frozen” UK pension into a QROPS is a lengthy process. It is one that you will need to do in consultation with an accredited financial adviser. You cannot do a QROPS on your own as pension providers will only work with an accredited financial institution.

If it is in your best interests to move your pension, the next step is to decide on the QROPS jurisdiction and begin setting up the QROPS structure. Once the QROPS pension structure is setup, the existing pension company will transfer your pension to the HMRC approved QROPS Pension Plan.

QROPS Pension Transfer – Going Forward…

This article provides a brief overview of a QROPS Pension Transfer, looks at what a QROPS Pension transfer is; the costs and benefits as well as the procedures. However, it only offers a broad overview.

Please read more at UKPensionsAdvisor.co.uk.

QROPS Pension Transfer – the transfer of a “frozen” UK Pension to an approved scheme.

Posted in Uncategorized | Leave a comment

Gibraltar prepares for green light on Qrops


Gibraltar is still waiting to hear the outcome of the HMRC’s decisions regarding the country as a destination for QROPS. This is likely to mean, however, that Gibraltar will need to impose taxes on imported pensions to meet the UK QROPS pension requirements. For more information on how this could affect you, visit http://UKPensionsAdvisor.co.uk

Posted in Uncategorized | Leave a comment

Can you ever afford to retire? | Money | The Observer


The worry for UK nationals is that many cannot afford to retire, having not adequately provided for their UK pensions. Wealthy individuals are choosing to move their UK pensions to a QROPS or QNUPS which provide better protection and improved control over their financial future. at http://UKPensionsAdvisor.co.uk we provide information that can help with making these decisions.

Posted in Uncategorized | Leave a comment

UK Pension Gap: a father’s and son’s tale – Telegraph


Discussions continue to go back and forth regarding the state of UK pensions management. The statistics are scary – soon the burden on pension system is going to be too much. What plans are you making for your UK pension?

Posted in Uncategorized | Leave a comment

Gibraltar looks to revive QROPS business – Telegraph


Gibralter is working hard to ensure that they can once again offer QROPS solutions to expats with UK Pensions. Find our more at http://UKPensionsAdvisor.co.uk

Posted in Uncategorized | Leave a comment

General Considerations for Pension Transfer

Pension Transfers in General

UK Pension

UK Pension

Retirement is the goal of all workers. What needs to be addressed is how one is going to be secure in retirement. It is a proven fact that we must save for our retirement.  If we do not save, we will find retirement a drag and not what it is cracked up to be. The ability to enjoy pension transfer will be based upon what can be saved and what is in your standard pension. It is important for the young workers to start planning for retirement even if that is very far in the future.  It takes time to save money and the younger a person starts the better off he will be at the time of retirement.

According to legislation, one can invest upwards of £3600 per year in a pension plan.  The plan will earn interest and be available upon retirement. Through the pension program contributions can be invested in stocks and shares as well as property and cash. At your retirement, up to 25% of the pension transfer can be taken as a tax-free distribution and the balance will be used to provide an income for the rest of your life. A stakeholder pension may be the best option for a worker, but again everything depends upon an individual’s circumstances.

Personal Pension Transfers

A worker may transfer into any UK pension without being charged for the service.  Many factors must be considered if you are thinking about transferring the pension away from the current provider.  Be sure to get all of the facts and figures associated with any pension transfer. In order to make any comparison, you would have to ask your provider for a Current Valuation and Transfer Value.

With this in hand you will be able to make an assessment of the costs involved in moving from your current provider to another. With that being said, any thought of a pension transfer must involve a certified financial adviser. These people work daily with pension transfers and will be able to help you make the hard decisions.

Personal Pension Transfer from a Company Scheme

Pension Transfer

Pension Transfer

Legislation has become more complex and continues to change frequently.  When considering to transfer out of a company scheme, it is very wise to get a specialist to help create a full analysis of any proposed pension transfer and an appropriate plan of action. Any pension transfer is a serious matter that cannot be taken lightly.  There are options available but the final decision rests with you and the financial adviser you have selected.

When one is considering a pension transfer into another jurisdiction a thorough look at the tax laws of the host jurisdiction is in order.  You do not want to jump from the frying pan into the fire, so to speak.  Some of the host jurisdictions have tax rates that rank right up with the UK. In some jurisdictions, one could lose upwards of 30% of any pension transfer through taxes.  When considering changing jurisdictions, be sure to have a certified financial adviser review the total tax scheme of the hosting jurisdiction.

For more information on pension transfer, please see pension transfer

Posted in pension transfer | Tagged , , , , , , | Leave a comment