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QROPs transfers OK for former expat workers in UK
| Published: | 1 Apr at 6 PM |
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QROPs can be had by foreign expats with UK workplace pension rights.
It’s a well-known fallacy that expats from overseas who’ve had workplace or personal pension plans can’t access them once they’ve retired in their home country or overseas.
The main reason for this frustrating belief is that many occupational and private pensions taken out in the UK are difficult to access from many overseas locations. As a result, the cash benefits accrued are locked away whilst the pension providers are obliged to deduct tax from the benefits unless a double-tax agreement is in place between the beneficiary’s country of residence and the UK. Even if it’s possible to access regular payments, fluctuations in sterling can erode foreign currency spending power.
The answer to freeing up trustee-owned and locked occupational or private pensions paid into by expats from overseas who’ve worked in the UK is simple, as all those with either type of pension have the right to switch to a QROPs. However, the benefits of such a switch should be carefully considered, as expat workers lucky enough to have gold-plated final salary schemes may have extra benefits unobtainable with a QROPs.
Defined salary schemes are another matter entirely, as the source fund from which the pay-out comes has been built up over the years through stock market investments. In these cases, the average QROPs flexible range of investments can outperform defined salary scheme pensions. Another point to consider is that benefits paid out from a QROPs can be paid in a wide range of currencies and are non-tax deductible.
Many former expat workers also believe a QROPs can only be taken out via a pension provider in their present domicile. In fact, although popular retirement destinations such as Thailand and the Philippines have no QROPs providers, financial centres such as the Isle of Man, Malta and Gibraltar act as a home base for the investment whilst the pensioner lives elsewhere according to his choice.
The first step to unlocking a pension and transferring it to a QROPs is to find registered, qualified and experienced professional assistance. Your pension provider will supply a transfer value on request, and your financial advisor will guide you through the necessary steps. It goes without saying that the choice of a trustworthy FA is essential to the process, and checking that advisory costs reflect the value of your pension pot is also recommended.
04/04/2016 - This article has been edited to reflect some corrections
It’s a well-known fallacy that expats from overseas who’ve had workplace or personal pension plans can’t access them once they’ve retired in their home country or overseas.
The main reason for this frustrating belief is that many occupational and private pensions taken out in the UK are difficult to access from many overseas locations. As a result, the cash benefits accrued are locked away whilst the pension providers are obliged to deduct tax from the benefits unless a double-tax agreement is in place between the beneficiary’s country of residence and the UK. Even if it’s possible to access regular payments, fluctuations in sterling can erode foreign currency spending power.
The answer to freeing up trustee-owned and locked occupational or private pensions paid into by expats from overseas who’ve worked in the UK is simple, as all those with either type of pension have the right to switch to a QROPs. However, the benefits of such a switch should be carefully considered, as expat workers lucky enough to have gold-plated final salary schemes may have extra benefits unobtainable with a QROPs.
Defined salary schemes are another matter entirely, as the source fund from which the pay-out comes has been built up over the years through stock market investments. In these cases, the average QROPs flexible range of investments can outperform defined salary scheme pensions. Another point to consider is that benefits paid out from a QROPs can be paid in a wide range of currencies and are non-tax deductible.
Many former expat workers also believe a QROPs can only be taken out via a pension provider in their present domicile. In fact, although popular retirement destinations such as Thailand and the Philippines have no QROPs providers, financial centres such as the Isle of Man, Malta and Gibraltar act as a home base for the investment whilst the pensioner lives elsewhere according to his choice.
The first step to unlocking a pension and transferring it to a QROPs is to find registered, qualified and experienced professional assistance. Your pension provider will supply a transfer value on request, and your financial advisor will guide you through the necessary steps. It goes without saying that the choice of a trustworthy FA is essential to the process, and checking that advisory costs reflect the value of your pension pot is also recommended.
04/04/2016 - This article has been edited to reflect some corrections
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