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A brief look at the rules and benefits of QROPS

As one of the leading teams of financial advisors across the world who specialise in Qualifying Recognised Overseas Pension Schemes, or QROPS, we’re often asked about the specific benefits of this type of pension scheme and the rules regarding transfers.

Across our website you’ll find various opportunities to learn a little about QROPS, but we thought it would be a good idea to consolidate some key information into one, handy article, in order to give you direct access to the answers to some of your queries.

Is a QROPS a realistic option for you?

The first thing that people quite rightly want to know is whether or not a QROPS could be the right option for them. In order to go some way to answering this, you need to bear in mind four main points.

First of all you’ll need to be pretty sure that you’re going to spend your retirement,, overseas – you can’t take out a QROPS unless you move abroad or intend to move abroad permanently. You’ll also need to have a fair size pension fund, or several different pensions, ready to transfer into your chosen QROPS. QROPS are also a better option for those who want to have a little more autonomy and control over the way their retirement fund is invested – but if you want to sit back and let someone else make all the decisions, you may prefer to look at alternative options or ensure your advisor can manage the investments.

What many people want to know is what kind of pension can be transferred. Basically, pretty much any pension apart from the UK state pension is eligible for transfer into QROPS, including; Occupational and Company Pensions including any AVCs (Additional Voluntary Contributions, Personal Pensions, SIPP, Unsecured Pensions, and  SSAS (Small Self Administered  Schemes).

Benefits of transferring into a QROPS

The benefits of QROPS have been well reported, but changes in HMRC legislation and problems with some overseas schemes has slightly tarnished the reputation of this potentially advantageous option. However, the potential benefits still can’t be ignored

  • You can choose to defer from taking an annuity.
  • The entirety of your pension balance will be transferable to your next of kin upon your death.
  • You’ll have a much wider choice for investments rather than being restricted to predominantly UK options.
  • You can take your income in whatever currency you choose
  • Good tax planning advantages
  • You’re still able to take your tax-free lump sum – which in some instances may be higher than the regular 25% at a rate of 30%.

Of course there are also other options, such as a SIPP, if it turns out that a QROPS isn’t right for you; whatever your current pension position, our financial advisors are here to help look through your options and make the best decision possible.

So whether you’re interested in QROPS, SIPP or any other type of investments to help you build a secure retirement, feel free to contact our financial advisors for independent advice under no obligation.

Have you a question about this article or need any help with your finances?

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