A worthwhile option for those who have a UK pension and plan to retire overseas is the QROPS pension. It is wrong to assume that a QROPS is only a tax saving scheme for the rich contributors. QROPS is open to all levels of contributors. However in certain cases the transfer costs and other fees may mean that the assumed gains do not outweigh the transfer costs. Barring the UK state pensions, most UK pension funds can be transferred into a QROPS. The country of residence or financial worth or any such thing hardly matter.
The tax advantages and many flexible investment options of QROPS pension is a boon to many ordinary people as it makes them significantly better off. As several small UK pension funds consolidate into a single QROPS, it helps to reduce administrative and sundry costs considerably, which normally eats into small schemes contributions due to economies of scale.
Certain factors need to be sorted out before transferring a pension to QROPS. Checkout the costs of administering the fund on a year-to-year basis, the charges for transferring the UK pension to QROPS pension, and the loss from your fund for calculating the transfer value against the fund value. If the advisor is commission based, naturally the commission comes out of the fund.
A QROPS pension is a cost efficient and tax effective retirement savings plan, especially for an expat. It is better than keeping the money in a UK pension plan. A QROPS pension is loaded with more features than a UK pension plan and generally a better option as it gives more purchasing power. There is no obligation to buy an annuity. There are no inheritance-tax issues as the pension fund is not included in the investor"s estate.
Depending on the merits, each fund may be transferred after due consideration. If there are specific problems in transferring a particular fund then it is wiser to leave it as it is and transfer the other funds to a QROPS pension. It will not only be better to look at the overall loss-benefit aspect but also to consider the gains. It would be better if an advisor illustrates how the retirement strategy might look after the transfers. It is advisable to consider the risks, transfer penalties, and weigh the ongoing advice from an advisor to reap the benefits of new products, tax rates etc.
Thus, with the benefits it confers,
QROPS Pension has come as a boon for ordinary people. This has become a much more worthwhile option for the common person.
