QROPS offshore pensions are still popular with expats, according to the latest official data.
In 2018, 5,000 expats switched funds from a UK pension or another QROPS to one of the tax-effective schemes – a 6% increase on the previous year.
The total value of transfers for the year was £640 million – down 14% on the year before.
The average transfer value of retirement savings into a new QROPS was £128,000 down 19% from 2017-18.
Since QROPS started in April 2006, 123,100 retirement savers have transferred £11.41 billion into offshore pensions at an average transfer value of £87,489.
HM Revenue and Customs explained that although the number of transfers increased from 4,700 to 5,000 last year, the level was ‘significantly lower’ than the peak of 20,100 transfers in 2014-15.
“The total value of transfers this year was £640 million,” said the HMRC report.
Average transfer value falls
“This is the fifth consecutive annual decline in the value of transfers, notably lower than the £1,760 million peak value of transfers in 2014-15.
“It is likely the fall in number and value of transfers is a result of changes in requirements and the introduction of the overseas transfer charge.”
The report also indicates that the average transfer value decrease for the first time since 2011-12 is due to the number of transfers falling quicker than the value of withdrawals.
Last year, the number of transfers increased as their value dropped, resulting in a fall in average values.
QROPS – the Qualifying Recognised Overseas Pension Scheme – allows British expats or international workers with UK pension savings to transfer their funds outside the UK, providing the receiving pension meets certain requirements laid down by HMRC.
From March 2017, HMRC has levied an overseas transfer charge of 25% of the value of the fund moved into a QROPS, subject to certain exemptions, such as if the pension is based in the same country as the retirement saver lives.
QROPS transfers since April 2006
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