Foreign workers with money marooned in a frozen UK pension scheme can unlock that cash with a tax-effective QROPS.
Thousands of foreign workers have spent time in Britain and paid money into a pension that is difficult to access from abroad.
Not only is the cash locked away, but UK pensions deduct tax on benefits paid to anyone living overseas and the foreign exchange rates between the pound and other currencies can wipe out spending power as well.
The bad news is that anyone employed in the public sector or civil service cannot transfer their fund into a QROPS.
But anyone with a workplace or personal pension can make the switch.
Can I transfer to a QROPS?
QROPS are not suitable for every foreign worker with UK pension rights. Retirement savers with gold-plated final salary schemes may find the scheme they are in offers far more benefits than a QROPS.
Defined contribution schemes are a different case. These are pensions that pay out from a fund built from investing in the stock market.
QROPS can often outperform these pensions because they offer a wider range of flexible investments, more markets and even access to commodities.
Importantly, QROPS also pay benefits without tax deducted and in a number of major currencies.
Many foreign workers with UK pensions may believe that they cannot access a QROPS because no providers are based in the country where they live.
What to do if you don’t have a local QROPS provider
Popular expat and foreign worker destinations like The Philippines and Thailand have no QROPS providers, but this is not a problem because some financial centres will act as a base for the pension while allowing the retirement saver to live wherever they wish in the world.
If you are a former foreign worker in the UK with a frozen pension and want to find out more about switching to a QROPS, then you need to speak to a qualified and licensed adviser.
You can transfer more than one UK pension into a QROPS.
To start the process, contact each pension provider for a transfer value – which is the amount of money you can take offshore into a QROPS from the UK.
If you have lost track of who looks after your UK pension, try to locate the trustee through the Pension Tracing Service.
For more information about QROPS and the benefits it provides, download the iExpats QROPS Guide or complete the Get Advice form.
