QROPS vs SIPPS: An Introduction To The Basics

Last Updated: 22 Oct 2020
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An Introduction To The Basics Of QROPS vs SIPPs

We’ve put together a quick overview infographic that highllights the differences between QROPS and SIPPs to help you start your pension transfer journey. If you want to find all the information you need about pension rates, make sure to check our detailed article!

The Acronyms

QROPS stands for Qualifying Recognised Overseas Pension Scheme1 

SIPPS stands for Self Invested Personal Pension2 

Jursidictions

QROPS – Can be held in a tax advantageous jurisdiction outside the UK.

SIPPS – Always resides in the UK

Benefits Of QROPS And SIPPS Before Retirement

QROPS – Up to 30% pension commencement lump sum3  free from UK tax from the age of 55.

SIPPS – 25% lump sum free from UK tax after you reach 55. Tax may be due in the country of residence.

QROPS and SIPPS Death Benefits

Fund Based Death Benefits

QROPS  – Fund value remaining on death can be used by surviving spouse to provide a drawdown4  income.

SIPPS – Fund value remaining on death can be used by surviving spouse to provide a drawdown income.

Lump Sum Death Benefits

QROPS – 55% Recovery charge only applied to value of Relevant Transfer fund on death.

QNUPS – 55% Recovery charge applied to fund value on death, 45% of fund paid as lump sum death benefit to beneficiaries.

QROPS vs SIPPs

In conclusion, making a deciison on QROPS vs SIPPS depends on your circumstances. A SIPPs is a good option for UK pension holders that remain in the UK and in some cases, for UK expats. What makes a SIPP popular is that the assets that can be held by the pension plan are diverse and include: Bank accounts, insurance funds, commercial property, investment trusts, government securities stocks, overseas stocks5  and shares, national savings products, traded endowment policies and mutual investment funds. Do you know what is Superannuation UK? It is important for you! Don’t miss this valuable information that we have prepared for you!

QROPS is a good option for UK expats with a UK pension that are not planning on returning to the UK. The saving on inheritance tax and attractive interest rates make moving your pension offshore an easy decision. The various jurisdictions that offer QROPS transfers mean that there are many options for transferring your pension.

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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