QROPS

Usually whenever anyone works in the UK, they will build up contributions into a UK Pension Scheme. This could be by way of either; their employee contributing on their behalf, the employee contributing, or both the employer and employee contributing into a UK Pension Scheme. Subsequently when they leave the UK, the pension contributions they have accumulated, are left behind and remain in the UK Pension Scheme. There are significant benefits that could be obtained by transferring your UK Pensions into a QROPS.

However it is important to note that there are downfalls to a QROPS including a newly introduced transfer fee that will set you back 25%.

What is QROPS?

A QROPS is a Qualifying Recognised Pension Scheme, commonly used by expats living in countries such as Switzerland, Denmark, Sweden, the Netherlands, and France. It allows you to pick up your pensions from the UK and transfer them into another jurisdiction.

Prior to 2006, anyone who left the UK would leave their pensions behind. Basically, this pension would be dormant, as they would no longer being any contributions being made, and would remain dormant until the member reached their retirement age, usually 65. So the individual would still have to follow UK pension rules even if they have since left the UK.

This all changed in 2006 with the introduction of QROPS, which is an approved HRMC scheme.

 

 

 

Transferring your UK Pensions into a QROPS allows you to take greater control of your money and gives you much greater flexibility and options of an overseas jurisdiction. At the same time, a QROPS gives you the security of a system legally recognised by the HMRC. 

Transferring a UK pension can prove to be a lucrative move. There’s a lot to consider, but with the right advice it can be a seamless process that could pay dividends in the long run.

Click here to download the guide to QROPS

Benefits of QROPS

If you’re no longer working or living in the UK, then there are some significant benefits in transferring your UK pension into an International Pension. Here are some of the main advantages:

  • Ability to merge all schemes into 1 easily managed scheme
  • Transfer can be made from GBP into your local currency
  • Wider investment choice and greater control of your money
  • Ability to take benefits from age 55
  • Ability to take tax free lump sum of 25%, or potentially up to 30%
  • Flexible draw down of the remaining pot, take as much or as little as you want, whenever you need it
  • Low tax rate on any income withdrawn
  • Ability to pass on 100% of any remaining funds to your chosen beneficiary free of tax

Disadvantages of QROPS

As previously mentioned, while there are certain benefits with a QROPS, as of March 2017, transfers outside of the EU or EEA are subject to a 25% transfer charge. Therefore while QROPS is not totally closed it is only advisable in specialised cases. An alternate option to a QROPS is a SIPP - or self-invested personal pension - which you can read more about here.

 

 

 

Contact Belgravia Wealth Management to find out more or to book a consultation with a financial consultant.
download-qrops-choose-qrops-approved-hmrc

Download your guide to QROPS now!