Only 12 months ago, the demise of the Qualifying Recognised Overseas Pension Scheme (QROPS) as expat pensions was predicted – but QROPS have gone from strength to strength.
Thousands of QROPS were delisted a year ago as pension firms realised the impact of new flexible access rules introduced in Britain were going to have on their schemes.
Many ignored or overlooked warnings from HM Revenue and Customs (HMRC) about pension freedoms which came into force on April 6.
While revolutionising pensions in the UK, the relevance of the pensions age test that came into force alongside the legislation was mainly pushed to the side.
HMRC took a different rule and required every one of the 3,702 QROPS in 45 financial centres to look at their rules and voluntary delist if the rules governing the scheme did not pass the test.
Thousands of pensions delisted
The pension age test is simple – the UK government simply bans anyone under 55 years old from receiving cash from their pension unless they can show that they are terminally ill.
The test was devastating.
HMRC accepted 3,037 QROPS failed the test. The QROPS List published on July 1, 2015, was not only missing the pensions but eight financial centres as well.
But the industry has recovered from the miserable time to bounce back as a leading tax and investment option for British expats and foreign workers with UK pension rights.
Australia QROPS suffered the most. Of 1,653 pensions, all but one were delisted.
Australia had led the market by number of QROPS from April 6, 2006, when the pensions were introduced.
QROPS industry bounces back
A year on from the start of the pension age test, Australia has 252 QROPS and again leads the market by number of schemes.
Australia was not the only country affected – the big losers included Canada, Germany, Guernsey, Ireland, the Isle of Man, Jersey, The Netherlands and Switzerland.
The centres that lost QROPS status were the Falkland Islands, Finland, Hungary (Reinstated August 2015), Sri Lanka, Trinidad & Tobago, Barbados (Reinstated December 2015), Russia and Portugal (Reinstated September 2015).
In July 2016, the latest QROPS List shows 17 new pensions have opened and two closed in the past two weeks.
Over the year, QROPS have opened at a rate of one every day.
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.
