What do you do if you want to transfer your pension to a QROPS, but the place where you live has no providers on the QROPS list?
Sounds like a problem for retirement savers, but it really isn’t.
Although the QROPS market is global with more than 3,000 pension funds across 44 countries, that leaves around 180 countries not represented in the market place.
The solution is a ‘third party’ QROPS.
Many financial centres offer third party QROPS, which are simply pensions based in one financial centre that can be accessed from another.
Third party QROPS
Popular third party QROPS providers are based in Gibraltar, Malta and the Isle of Man, which have a range of nearly 300 separate offshore pensions to offer.
As an expat, once a pension is switched to a third party financial centre, you can move around the world as you wish without having the complication of shifting your pension each time you make a move.
One of the key points is the expat or international worker does not have to be a resident of the financial jurisdiction where their QROPS is based.
Income tax, if any is due, is paid where the retirement saver lives and not where the pension is based.
QROPS payments are gross – no tax deducted – and can be made in any major currency direct to a local bank, avoiding expensive foreign currency exchange rate charges.
The most useful application of this solution is that international workers may not yet have decided where they wish to settle or retire. A third party QROPS lets them put off the decision while offering peace of mind that retirement savings are not diminishing due to a string of early exit transfer fees.
Doubling QROPS options
What if the country you want to move to offers QROPS pensions?
Under these circumstances retirement saving options double.
Savers can either opt for a local QROPS for residents or a third party QROPS.
The problem with a residents-only QROPS, like those offered in Guernsey and Jersey, are residency qualifications, which may include financial demands, like earning a minimum amount or buying a home.
Third party QROPS also come in ‘lite’ and standard options, so suit all sizes of savings pots.
A word of warning, expats and international workers with UK pension rights can switch to a QROPS, but they are taboo to British residents for tax reasons.
