Do you have a UK pension? QROP

Do you have a UK pension? QROPS explained

If you were employed in the UK, and had access to either a company and/or personal pension fund, you may have heard about something called QROPS.

Do you have a UK pension? QROP

It is a hot topic in the financial services industry, and one that has been receiving a lot of attention lately.  But what is it exactly and how does it benefit you?

The acronym QROPS stands for Qualifying Recognised Overseas Pension Scheme. This means it is any scheme recognised in the UK by HMRC as meeting the standards and conditions equivalent to a UK pension. This approval allows anyone with a UK registered pension who is living outside the UK, or is intending to leave the UK, to transfer their pension offshore. QROPS allows you to transfer your current “frozen” pensions into a different HMRC approved scheme in a jurisdiction outside of the UK.

So, what does this mean for you? If you have a UK pension plan, but are no longer working or living in the UK, this pension would still be based in the UK, and dealt with under the rules and regulations of HMRC, even though you may have returned to, or relocated to another country.

The problem here is largely twofold.  Firstly, there are massive tax and financial implications of keeping your pension in the UK, and secondly it is a tough task to manage such an important financial asset while in a different country. I will expand on the technical details and advantages of QROPS in future articles, but for now the tax savings, on both income tax and inheritance (death) tax, is substantial. In laymans terms, by using a QROPS, you are able to “transfer” your pension benefits out of the realm of the HMRC and by doing so receiving all the financial benefits that a QROPS can provide.

If you are interested in finding out more read the full article by Breytenbachs

Cover image by John Gomez via