A refresher on what a QROPS is and how it works –
Quite simply, a QROPS is a pension plan that; “Qualifies” with HM Revenue and Customs (HMRC) rules, is officially “Recognised” by HMRC, is “Overseas”, i.e. outside of the UK and is set up in trust as a legal “Pension Scheme”, hence the acronym. A QROPS therefore, can accept a UK pension transfer just like any UK based scheme. The benefits of transferring your fund into a QROPS include increased tax efficiency, flexibility, total investment freedom and large growth opportunities – to name just a few.
For most people, their pension is probably their second most valuable asset after their family home, so benefits really make a big difference, and can dramatically improve life in retirement.
Around 300,000 to 500,000 Britons leave the UK every year to start a new life overseas. The big demand for overseas pension benefits is the key reason behind the birth, development and refinement of QROPS and many thousands of expats have transferred their UK pension into a QROPS since the schemes were launched. Because of the potential benefits to be derived from transferring a UK pension abroad, this demand shows no sign of slowing.
The capacity for QROPS to simplify an individual’s retirement has assisted as well. With a QROPS, it is much easier to switch from out-of-date arrangements, and consolidate a number of pension schemes under one roof.