John Lawson
John Lawson
Last Updated: 22 Oct 2020
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UK Pensions

Considering Your Retirement

Choosing the correct fund structure is critical to minimise tax and preserve your investment. UK pensions have their own set of financial legislation and if used correctly can offer some of the best tax efficient structures on the market. However, it is a detailed field of finance and there are regular changes to the legislation, which your adviser needs to keep abreast of.

The two major options that offer these significant advantages are QROPS1  and QNUPS.2  Please look through them in more detail below.

UK Schemes To Choose

If you have lived or worked in the UK, you most probably have at least one or more pensions. There are different retirement funds you can choose from. Here is a brief overview on pension schemes.

UK Pensions Transfer

If you have one or more UK retirement funds, you can transfer them to one of the transfer schemes for better growth management. To avail yourself of a fund transfer scheme you will have to fulfil certain requirements.

  • You have lived or worked in the United Kingdom and hold a UK pension
  • You are now currently living (working/retired) out of the United Kingdom
  • You have a number of funds acquired through different employments and would like to put them in a SIPP (Self Invested Personal Pension3 )
  • You want to transfer your funds to a tax free or low tax jurisdiction

You can avail of a retirement fund transfer by taking one of the overseas pension schemes that offer better benefits.

QROPS

QROPS or Qualifying Recognised Overseas Pension Scheme is an overseas pension scheme4  that was introduced in April 2006 in the UK. QROPS facilitates the easy transfer of retirement funds to any country where you are currently residing. If you have worked in the United Kingdom or if you are living outside the country but have s retirement scheme, then you can avail of a QROPS to transfer your funds to any jurisdiction of your choice for better growth and tax savings. The QROPS scheme should correspond to the guidelines set down by HMRC.

QNUPS

QNUPS is a Qualifying Non-UK Pension Scheme that was introduced to rectify a mistake made in the 2004 Finance Act. The 2004 Finance Act stated that money placed in QROPS would be subject to inheritance tax in the event of the death of the holder. With the introduction of QNUPS, assets and money transferred to a QNUPS scheme will not be subject to inheritance tax. Anyone over the age of 18 can acquire a QNUPS. All QNUPS schemes should meet Her Majesty’s Revenue & Customs strict criteria for pension schemes.

SIPP

A SIPP is a UK registered personal pension scheme that provides plan holders the freedom and flexibility to make decisions in the handling of their investments. This is a dynamic pension scheme that allows individuals to choose any type of properties they want to invest to – providing more security upon their retirement. The SIPP options available are Independent SIPP, Insured Corporate SIPP, IFA SIPP and Low cost SIPP.

Inheritance Tax United Kingdom

Inheritance tax is the tax that your beneficiaries will have to pay to the government for the estate that that is passed on to them after your death. In most cases inheritance tax will amount up to 40% of the amount of inheritance. You can save on inheritance tax UK by transferring your UK pensions and assets5  to a QNUPS pension scheme.

Got a Question About UK Pensions?

Want to Chat With the Leading UK Pensions Expert in the UK?

Regulations are constantly changing, but we’ve found the leading UK Pensions expert in the UK and he’s willing to answer your questions or assist if possible. Hundreds of people have saved a fortune on tax with some of his structures.

If you’d like us to connect you with him, please get in touch below.

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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