£1 Billion Bonanza For New Zealand QROPS

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Expats and international workers have switched almost £1 billion of retirement savings in the UK to New Zealand QROPS since March 2013.

The money has gone into QROPS offshore pensions rather than Kiwisaver pensions.

The data comes from annual reports of New Zealand QROPS compiled by financial adviser Simon Swallow of IFA firm Charter House, which has offices the UK and New Zealand.

He argues the Brexit and the falling Pound against international currencies should not put off British expats in New Zealand or New Zealanders who have pensions in the UK from making the switch.

NZ QROPS offer Sterling funds

“Anecdotal evidence from New Zealand QROPS is that the trend for transferring has continued at pace since March this year,” he writes for a New Zealand money comparison web site.

“This is particularly interesting given the impact of Brexit, which has thrown up a wave of concern and a weaker Pound which was at $2.40 a year ago compared to the current $1.75.

“With most New Zealand QROPS now offering sterling denominated funds the previous issue of being forced into dollar denominated funds has disappeared. The sterling funds have certainly been popular with most transferees since the Brexit vote, especially as there is more control over when they can be converted into dollar funds.”

The latest HMRC QROPS list details 35 New Zealand pensions open for transfers.

Swallow also pointed out that appetising cash offers to retirement savers willing to leave a workplace pension scheme have influenced the pace of transfers.

‘Eye watering’ golden goodbyes for savers

Some FTSE350 companies are offering up to 20 or 30 times the final salary payment to employees willing to cash in their workplace schemes in favour of starting a UK SiPP or switching to an offshore QROPS.

Even former pensions minister Steve Webb wants a clearer process for employees to switch from a workplace pension to a personal scheme.

“The golden scenario is it’s a win-win,” he said. “Transfer values are currently at eye-watering levels. In one case an adviser had seen an increase in a client’s transfer value that was worth as much as a house.”

According to the latest data from pension monitor Xafinity, the average lump sum transfer value at the end of October was £238,000.

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.

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