9 Reasons Expats Should Switch To A QROPS Pension

Lisa Smith, BA (Hons), CeFA

The future of any UK workplace pension is in doubt as employers are weighed down under tons of debt and look for ways to wriggle out of their retirement commitments to workers.

Scandals are plaguing Britain’s biggest companies as efforts to save money at the expense of pensions continually unravel.

So far this year we have seen British Home Stores and now the Bernard Matthews schemes criticised for undermining pension promises.

The massive British Steel\Tata Steel fund is a ball and chain preventing the sale of the business and management at high street retailer John Lewis wants to change pension arrangements but fears the staff who own the collective will resist any suggestion they make.

Expats have a lifeline – the Qualifying Recognised Overseas Pension Scheme (QROPS).

QROPS lifeline for expats

QROPS are personal pensions for expats that offer a shelter from the worry of whether a company pension will still be there as promised on retirement.

Here are nine reasons for switching to an offshore QROPS:

  • Avoid paying UK income tax on pension payments if you are a British expat living permanently overseas
  • Take the opportunity of passing on any unspent pension wealth without the worry of UK inheritance tax
  • Beat UK caps on annual contributions and the lifetime allowance restricting how much money you can hold in a pension fund
  • Take up to 30% of a QROPS fund as a tax-free lump sum
  • No exchange rate juggling with pension payments – get them paid into a bank already denominated as local currency
  • Expats can take their QROPS with them when they move between countries, saving costly transfers from one provider to another
  • Grow a QROPS fund by investing in a wider range of funds, bonds, equities and commodities than a UK pension offers
  • Take control of your final salary pension by moving the fund out of reach of employers who may try to ditch the scheme and slash benefits by at least 10% if placing the fund in protection
  • Like UK pensions, QROPS do not come with any obligation to buy an annuity

Not all benefits will apply to every expat – QROPS are tailored to personal financial circumstances by international IFAs.

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.

Leave a Comment