QROPS Pension

Do you need a QROPS Pension? Are you a UK subject planning to retire and live overseas? Do you have an existing pension fund in the UK and would like to be able to take it with you to your country of destination? What you need is a QROPS pension scheme to accomplish this. QROPS or Qualifying Recognised Overseas Pensions Scheme is an option for UK pensioners planning to relocate to a different country.

Critics say that QROPS is merely a tax avoidance scheme for the rich but this is not the case for sure because the scheme is open to everybody that can qualify for it. Pensioners would just have to consider the size of their pension because the costs of establishing the scheme and maintaining it may eat up on the gains to be made from the pension fund.

Your QROPS Pension

Apart from the state pension, all other UK pension funds can be converted into a QROPS. So it really is not just for the rich. Middle income individuals have benefited from a QROPS scheme and are better off financially due to the tax advantages offered by a QROPS pension as well as its flexible investment possibilities.

If you would like to start planning for your retirement even if it is still a decade or two away you may look into the possibility of transferring all of your pension funds into a QROPS. You will be supporting the economies of scale by helping reduce administration costs which can take a toll on the contributions of smaller pension schemes.

Much of the less than savory talk about QROPS pension originates from pension providers in the UK whose business has been decimated by this overseas pension scheme. These pension companies mostly offer self-invested personal pension of SIPP and they target wealthy clients by offering their options for self-manage funds.

But an SIPP is more suited for pensioners living within the UK and not planning to reside elsewhere. QROPS pension have been designed specifically for pensioners living abroad and it offer the same advantages and features of an SIPP plus the benefit of having the fund established in a jurisdiction that imposes lower taxes. QROPS likewise does away with the need to purchase an alternative secured pension or annuity.

Leading SIPP providers including AJ Bell and London and Colonial have voiced their complaint on the business that they have lost to QROPS pension due to the disparity in taxation, which favors offshore pension schemes. It is often the case that when discussing offshore investments, people get concerned regarding the risk of funds moving to tax havens. But this does not apply to QROPS as the QROPS pension scheme allows for the establishment of fail-safe clauses to protect pension funds.

QROPS Pension Advice

As a safeguard, a QROPS pension cannot be established without the express approval of Her Majesty’s Revenue and Customs agency. The office has to certify that the scheme adheres to QROPS rules and regulations. Pensioners planning to establish a QROPS pension are encouraged to seek out independent QROPS advice before deciding to take the plunge.