Is a QROPS right for me?

An HMRC-recognised QROPS is open to anyone who has a transferable UK pension fund.

If you fit into the following criteria, a QROPS pension could be ideal for you.

  1. You have the intention of retiring outside the UK
  2. You have a substantial amount invested in an existing UK pension scheme
  3. You wish to consolidate a number of pensions, whilst living outside the UK
  4. You wish to have more control over how your money is invested

Which pension schemes can be transferred in to a QROPS?

Examples of potentially transferable UK registered pension schemes include:

  1. Occupational schemes/ company pensions (only if the client is a deferred member)
  2. Personal Pensions
  3. Additional Voluntary Contributions (AVC)
  4. Small Self Administered Pension Schemes (SSAS)
  5. Self Invested Personal Pension Scheme (SIPPS)
  6. Unsecured Pensions (income drawdown)

It is advisable to seek specific QROPS advice when considering a transfer into a QROPS, as each of the listed schemes have specific benefits and features which need to be taken into account. Please contact us to seek further advice.

Why should I choose a QROPS?

A QROPS pension offers a wide range of benefits if you currently live outside the UK or intend to leave the UK in the future.

However, a QROPS pension is not for everyone, so please consider the following guidelines to see if you might be eligible for a QROPS.

Residency Considerations:

  • You no longer are a resident in the UK, but have an existing UK pension
  • You do not intend to retire in the UK
  • A QROPS may also be suitable if you're still living in the UK, but plan to retire permanently abroad and are sure that you will then be able to meet the requirements shown above.
  • If you wish to find out in which countries QROPS is available, please contact us.

General Considerations:

  • You have an occupational or personal pension plan, ideally with a total value of minimum £40,000.
  • Your existing pension arrangement is not particularly attractive as it has limited investment options
  • You are in a final salary scheme, but due to mergers, life expectancy increasing and poor investment returns there may not be enough funds to meet all the liabilities (including your pension) and the scheme has solvency problems.
  • You have a money purchase or defined contribution scheme with no guarantee, and/or you are concerned about limited investment options and returns.

How do I know that it is a legitimate scheme?

All QROPS providers will have a letter from HMRC confirming their QROPS recognition number. Furthermore:

  • You and/or your QROPS adviser should check the legitimacy of the QROPS with HMRC and by checking if the scheme is listed on the HMRC QROPS list.
  • You should check that the regulatory controls in the overseas jurisdiction.
  • You should know who is controlling and administering your Pension fund (The Trustees) and ensure they operate in a regulated jurisdiction.
  • HMRC clearly states that the listing of a QROPS should not be seen as a recommendation and you should always seek advice from a qualified financial adviser.

What is the minimum transfer?

The minimum transfer value is £40,000.

What is the maximum transfer?

There are no limits on the transfer value, except UK taxation may apply on transfers over £1.5 million (£1.25million from 2014).

What will happen if I return to the UK?

Your QROPS provider will continue to annually report any payments made from the QROPS to HMRC for a period of 10 years from the date the QROPS was set up. However, there are no major disadvantages of a QROPS in the UK and there can be some advantages of holding a QROPS whilst UK resident, compared to holding a UK pension. A QROPS mirrors UK Pensions legislation so will be subject to UK income tax but on 90% of the income only.

What happens to my QROPS when I die?

Should a death benefit payment be made during the 5 year period of non UK residency, then the QROPS will report the payment to HMRC in respect of the deceased member and tax liabilities could occur. Should death of the member happen after being a non-UK resident for five years, UK taxation does not apply and depending on any local law, the remaining funds should be paid to your beneficiaries.

Who can receive a death benefit payment following the death of a QROPS member?

Following a member's death the residual value of the QROPS is available to the named beneficiaries. Effective planning is important to ensure the benefits go to who the member intends.

Do you have any questions about your UK pension?

In order to provide you with the latest information on QROPS, we have assumed that you understand your current UK pension arrangement. However, should you require more information on your pension fund, please contact us today.

We are here to answer your questions and help you decide whether a QROPS is right for you. Contact us today.