British expats should always consider the benefits of switching onshore pensions to a Qualifying Recognised Overseas Pension Scheme (QROPS) when they permanently wave goodbye to living in the UK.
QROPS have lots of benefits that make retirement saving more effective for expats, but they are not the only group who should think about moving their frozen onshore pensions.
Thousands of international workers who have lived and worked in Britain but left to live somewhere may find a QROPS suits their financial circumstances as well.
QROPS are the ideal retirement solution for anyone living outside the UK who has a frozen pension which the provider agrees to transfer.
Tax and investment benefits
Besides the tax and flexible investment benefits, QROPS also have other features that can appeal to expats and international workers:
- Consolidation – Bringing retirement savings spread across a number of pensions into a single fund can cut costs and make investment management easier. Consolidation also ties up administrative loose ends such as different pension start dates as moving to a QROPS aligns them all at 55 years old
- Future moves – Switching onshore funds to a QROPS in somewhere such as Gibraltar or Malta lets a retirement saver move wherever they wish while the pension stays put. Portable pensions like this rid expats of the cost of moving their money if they move countries
- International providers – Portable pensions let expats and international workers take advantage of all the tax and financial benefits of moving offshore even if they live in a country without a QROPS provider
- Foreign currency benefits – QROPS pay out in a range of major currencies that avoids problems with exchange rate juggling to make the most of pension payments
- Offshore means out of reach – QROPS still have some ties with the UK as they are supervised by HM Revenue and Customs (HMRC), but they are beyond the reach of the government in terms of restrictions such as the lifetime allowance and tax on pension payments
Another point to note is that QROPS savers who return to the UK will find 90% of payments are taxable in Britain or as foreign income if they claim the remittance basis.
Further QROPS Information and Guidance
For more information about QROPS and the benefits it provides, download the iExpats QROPS Guide or complete the Get Advice form.
