Qualifying Recognised Overseas Pension Scheme (QROPS) In Detail

Last Updated: 23 Oct 2020
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What You Need To Know About QROPS

Making decisions about your retirement is a daunting task, but it is vital understand the different options when planning your retirement. There are many QROPS benefits you can take advantage of. Make sure you are informed for your investment decisions. The details of an individual’s saving plan differ from person to person but the important advantages are discussed below. It is possible to transfer your funds.

You can take a QROPS and enjoy various tax benefits. Here are some of the points that will help you understand ‘What is a QROPS (Qualifying Recognised Overseas Pension Scheme)’? Find Out More About QROPS.

What Is A Qualifying Recognized Overseas Pension Scheme?

It is an overseas pension scheme that was introduced on 6th April 2006 in the United Kingdom. It facilitates the transfer to other countries where you are currently residing. Many Britons have dreamt of moving out of the United Kingdom to countries around the world after retirement for business or other reasons.

One of the concerns they face is in transferring their UK-based schemes to the countries they are currently residing in. There are laws and rules that are in force in various countries and Britons residing in these countries after retiring may find it a daunting task to be able to transfer their accumulating retirement funds. This is where a Qualifying Recognised Overseas Pension Scheme1  can make a big difference and make it possible for anyone with a UK pension who has moved out of the United Kingdom to receive their pension without difficulty.

Is A QROPS For Me?

If you are an individual who has expatriated or is planning to expatriate within the next 12 months, then you might want to consider transferring your UK pension to QROPS.

If you are a foreign national who has worked for several years in the UK and now have moved back to your country of origin, it is recommended to transfer your UK pension to QROPS so that you can benefit from easily transferring your money to your current country of residence.

What Does A QROPS Do?

It allows you to legally transfer your UK-based retirement funds to other countries where you are currently staying thereby taking advantage of the “less restricted” rules of that country. This gives you more flexibility instead of parking it in a personal or company UK pension scheme.

The scheme enables you to have more control of your money and to manage it any way you want to in your lifetime. You do not have to worry about not being able to use your funds while you are staying outside of the United Kingdom any more.

If you are about to retire and move to another country in Europe, US or in fact anywhere you choose, it would be wise to consider this option. When you move to a country within the European Economic Area (EEA) the amount of paperwork to get started will be considerably less. For countries outside the European Economic Area (EEA) the paperwork is much more.

QROPS In A Nutshell

In a nutshell, it is an overseas scheme that give you the flexibility to use your retirement funds that you will normally not be able enjoy when you choose to move to another country. It is important to have knowledge on how to transfer your UK retirement funds abroad with QROPS Pension Scheme.

It allows you to make use of your hard earned money and save on income tax payable in the UK while you are living in another country. These few tips are intended to help you understand what an overseas retirement plan can offer.

What Are The Minimum Values

Qualifying Recognised Overseas Pension Scheme has made it possible for anyone with a UK pension to transfer their pension to any other country in the world. For many who have worked in the United Kingdom and have moved out to other countries but still have their retirement funds in the UK, this is good news. They can make use of a Qualifying Recognised Overseas Pension Scheme and transfer their hard earned money and give it more flexibility and power.

How To Start A Transfer

One of the first questions that arise when considering a Qualifying Recognised Overseas Pension Scheme transfer is the minimum values that is allowed for a transfer. There is no set minimum value for a QROPS transfer. However, according to research, the minimum transfer amount for a QROPS is £25000. If the amount in your plans does not meet the minimum amount, then you can combine your other funds into one in order to reach this figure.

Are There Any Charges

Though there is no set minimum values for a transfer, Agencies recommend a minimum amount of £25000 for a QROPS transfer. This is because charges associated with  a transfer could outweigh the benefits of the transfer if it is lower than the stated amount. We recommend not to take a QROPS transfer if the amount is less than the threshold.

Various QROPS Schemes

There is a set list of Qualifying Recognised Overseas Pension Schemes set by the HMRC available on the HMRC website.2  However, each one is different from the other. Each scheme has its own structure and is only worth provided that a particular threshold is reached. Therefore each transfer scheme has its own charges. Given the various charges for the different schemes, agencies recommend that the QROPS minimum values for a transfer be at least £25000.

Below The Limit

One of the questions posed to advisers is, “What if I don’t have the QROPS minimum values required for a transfer?” If an individual does not have sufficient funds in his UK scheme, he or she can easily reach that figure by adding other assets or funds to it and bring it up to the minimum amount of £25000. However, it is only beneficial if the individual is residing abroad for over 5 year or is going to reside abroad for more than 5 years.

Talk To A QROPS Adviser

It is recommended to talk to an authorised adviser3  before taking a QROPS transfer. In the event that your funds are below the minimum values, an adviser will be able to give you valuable guidelines on what to do and which scheme is best for you.

Making The Transfer

What should I do about my UK pension? If you are thinking of transferring your UK-based funds to an offshore scheme, here are some next steps you can follow. You will need to check all schemes and decide which one is best for you. Make sure you know how to choose the best QROPS jurisdiction. This decision have a huge impact on your investment. Be informed about all the benefits from the different jurisdictions.

Do I Qualify For A QROPS?

One of the first QROPS transfer next steps is to check if you qualify for a QROPS. To be eligible to transfer your funds you need to be between the ages of 18 – 75, your retirement plan must be valued over the minimum value of £25,000 and you must be planning to be overseas permanently or have retired overseas.

Chat To Someone About It

Find out about transferring your UK pension – we can help by putting you in touch with a reputable registered financial adviser in your area (free and without obligation). After talking to you, the adviser will give you proper advice on which scheme to choose. Careful planning together with your QROPS adviser is very important. You will also need to tell your adviser if you have any plans that require a large amount of money, like paying university fees for a family member.

Moving Forward

Once you have spoken to the adviser and after you have had sufficient time to look at all the  options. You will need to survey the Qualifying Recognised Overseas Pension Scheme market for appropriate options.

Starting The Transfer

Once you have decided which scheme is for you, our reputable registered financial adviser will arrange for your money to be transferred from the UK to your new scheme. At this point you do not have to be worried about anything as your financial adviser will keep you updated on everything.

How Long Will It Take

There are three things that determine how long it would take to complete the transfer:

  • The efficiency of your existing provider in processing transfer requests
  • The time taken to accept the assets

Normally, it takes about 2 months to complete the QROPS transfer. But there have been instances where the transfer from an existing UK pension scheme to a QROPS has taken just 6 weeks.

Enjoy Your Retirement

Now that you have completed all the transfer next steps, you can sit back and relax and enjoy your retirement. Our financial advisers are always available to talk to you and address any concern you might have regarding your new pension scheme. Make sure you are well informed before getting a private pension plan!

Contact Us

These Qualifying Recognised Overseas Pension Scheme transfer next steps are meant to give you an idea of the flow of things. You can contact us and talk to our financial for a detailed explanation, consult our question and answer page or we can also assist if you have queries or concerns around BREXIT.

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John lawson rndlg

John Lawson

John advises business, individuals, and organisations on pension planning. As you’ve probably realised by now, we’re invested in helping people like yourself understand a little bit more about how equity release options work.

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