More than 250 protesters have signed up to a petition demanding the British government scraps the overseas transfer charge on QROPS pensions for expats.
Although the government will not respond to the petition until 10,000 people have signed up, campaign leader William Wilson is pleased with the momentum that is building.
Expats pay the charge on moving pensions from the UK to a QROPS or between QROPS unless they live in Europe or one of 13 countries which have QROPS outside Europe, which is unfair to the thousands who cannot access a QROPS pension where they live.
The policy is based on financial centres that host QROPS rather than those where the greatest number of expats live.
Discrimination against expats
For instance, switching money to a QROPS in Latvia is OK for expats living in Europe, but those in the former British colony of Hong Kong, which also acts as a financial gateway for China, must pay the charge, which stands at 25% of the money moving between pensions.
“The overseas transfer charge discriminates against expats outside the EEA in a country which does not host a QROPS, making them pay a 25% exit tax on moving their pension fund from the UK to a QROPS to gain better financial terms,” said Wilson.
“The charge is unreasonable as the rules punish QROPS members for financial planning when savers with other pensions, like Self-Invested Personal Pensions (SIPPs), can live in the same place as a QROPS saver and suffer no transfer charge on moving their fund.”
No good reason to charge expats
At the latest count, 258 people had signed the petition on the UK Parliament web site.
Around 105,000 retirement savers have transferred funds worth almost £10 billion from a UK onshore pension to an offshore QROPS since they were introduced in April 2006.
“We hope to generate a lot of support from expats who face handing over a huge amount of their retirement savings for what seems no good reason,” said Wilson.
“The problem is expats are scattered worldwide and someone needed to pull them together, so the government is aware of their feelings.”
The petition is open until July 19, 2018.