One of the opportunities that attracts expats to leaving Britain for a new life abroad is the opportunity to up sticks and move on whenever they feel like a change.
The romance of the idea appeals to many, but the reality is finances tie them to a place.
Mortgages, bank accounts, credit cards and loans are generally restricted to consumers living in a specific country.
In some cases, such as the United Arab Emirates and some other Gulf States, debts have to be settled before leaving the country.
Luckily, Qualifying Recognised Overseas Pension Schemes (QROPS) are not bound by the same rules.
How third party QROPS work
Although many financial centres are restricted to offering QROPS to residents only, some have no residence rules.
Choosing the right QROPS from the start depends on where an expat is likely to live and whether they will move on.
Take a young engineer working in the oil and gas industry.
These workers tend to move around the world to the next job every time a contract ends.
They may stop off in The Philippines or Thailand to take advantage of the cheap cost of living, but take up contracts in the Middle East or Africa.
Flexibility to move without penalty
They can take a ‘third party’ QROPS from a financial centre in Malta or Gibraltar, for instance.
These QROPS centres let retirement savers leave their pension with them regardless of where and how often they move around the world.
An older retirement saver might be leaving Britain for sunnier climes, perhaps to live permanently in Spain or Australia. Both these countries offer QROPS to residents, but the expat can also opt for a Gibraltar or Malta QROPS instead.
Third party QROPS give retirement savers a lot more flexibility to move between countries without triggering a costly transfer every time they cross borders.
An experienced IFA who understands QROPS and has access to the whole market rather than a narrow range of products can help expats pick the right pension.
Expats should make sure that the adviser is licensed and regulated to give pension and investment advice in the country where they live.
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.
