Taking a pension overseas with you when you decide to move to another country as an expat is not as complicated as you might believe.
Hundreds of British workplace and private pensions are switched to offshore Qualifying Recognised Overseas Pension Schemes (QROPS) each year.
Even if the country where you are taking up residence does not have a QROPS provider, transferring your pension out of the UK is simple.
Take an expat moving to Manila, the capital of The Philippines.
The Philippines has no QROPS providers but this does not matter.
Portable pensions for expats on the move
Out of the 41 financial centres around the world offering more than 1,100 QROPS, several will offer ‘third party’ pensions that effectively allow expats to live where they wish in the world while their pension stays put.
The destinations of choice for third party QROPS are Malta, Gibraltar and the Isle of Man.
Providers in these centres offer a range of offshore pensions to match funds of all sizes, from small pots of less than £100,000 to those hitting the lifetime allowance cap of £1 million.
Expats in The Philippines still receive all the benefits of a QROPS as well, including:
- Up to a 30% tax-free lump sum
- Pension payments paid without UK income tax deductions
- Payments direct to your local bank account in one of several major currencies
Moving to the Philippines
Expats can consolidate any UK pension into a QROPS except the State Pension or a public sector or civil service scheme.
That allows several frozen pensions in the UK to be grouped together in a QROPS that removes them to beyond the reach of yet more tinkering by the government.
QROPS are also available to workers from The Philippines who have moved back home after saving into a UK pension – again provided the scheme is not a public sector or civil service pension.
So even the Philippines is not outside the reach of a QROPS offshore pension, which makes the tropical beaches, crystal blue seas and natural beauty of the country even more attractive to expats.
Add to that the friendly English-speaking people, ultra-low cost of living and burgeoning economy, and moving to the Philippines is even more tempting.