There are four crucial aspects which, when put together correctly, contribute to the creation of the perfect QROPS.
The complexities involved in finding a QROPS which is suitable for the individual’s circumstances can be simplified when broken down into segments. These four features are perhaps the most important considerations when making sure that the QROPS selected will offer stability, will work efficiently, and most importantly of all, is tailored for the individual.
Provider & Scheme
Selecting the right provider – and the right scheme offered by the provider – is imperative to simplifying the transfer process, understanding the benefits of the transfer, and having the peace of mind in knowing that your retirement funds are safe with a credible organisation.
There are advisors out there who will favour a particular provider or scheme (probably because of the commission rates offered). A credible advisor will offer multiple options from different providers and will provide all the necessary information required to make an informed decision.
There are over 3300 schemes out there, each one is unique, has different levels of flexibility and different associated fees.
Country of Residence & Country of Retirement
To qualify for a QROPS, it should go without saying that you must not reside in the UK, or you must intend to migrate within the next 12 months, however, the country you choose to live in and the country you are hoping to retire in are certainly important points when it comes to QROPS.
The choice of jurisdiction for the QROPS will be based on how well it works on an economic level with your country of residence. A double tax agreement must be in place with the relevant pension specifics, and the country should also have favourable tax regulations which aren’t going to eat up 50% of your income upon retirement.
There are 42 different jurisdictions offering QROPS through various providers. The most popular destinations for savings tend to be those that have a very close economic structure to that of the UK. Those which are regulated to the same level as the British Isles are also favourable options. Currently enjoying popularity as a jurisdiction are Australia, Malta, Ireland, New Zealand, Gibraltar and the Isle of Man.
Each jurisdiction has specific outlooks on benefit withdrawal, retirement ages, options for investment, death benefits and regulations. These must be researched and cross-referenced with the individual’s requirements.
Providers will usually offer multiple schemes with different levels of the investment element of the fund. Some offer no investment aspect, while others invest aggressively. Much depends on the jurisdiction and the way in which it is regulated, the size of the funds and the individual’s hopes for retirement as to the level of investment sought after.
These four options must be carefully considered, and to build the perfect QROPS, the requirements and objectives within each category must be met.
These four points will be covered off effectively by a qualified advisor, and after taking into account each of these aspects, various options will be presented which meet the identified criteria.