QROPS pensions transfer

Cap_Scarlet

I have been discussing with an international pensions advisor who has asked me to think about transferring my uk pension into a QROPS scheme.

I am an expat and the scheme is my old final salary scheme from the UK.

The advice is based on the fact that a) the final salary scheme may not be available for transfer to my wife in event of my death b) Potentially higher returns as my final salary scheme is probably increasing at RPi.

Thoughts?

yelf

b) Potentially higher returns as my final salary scheme is probably increasing at RPi.?

really? in what form will the money be invested in the QROPS to outperform am index-linked FS pension?

and why wouldnt it be transferable to your wife? do you know that for definite?

dunstonh

Potentially higher returns as my final salary scheme is probably increasing at RPi.

What is the critical yield? One assumes you have been told that vital bit of information. Its a mandatory in the UK and whilst not the only consideration it is certainly one of the most important. (it also needs to be the critical yield after their charges and commission has been covered - not before).

Remember that most QROPS sales come from non regulated individuals who take a massive chunk from your pot. You are not going to get consumer protection and these people are not likely to be anywhere near as qualified as a real adviser.

Many feel that QROPS is heading towards being the next major mis-sale area. Problem is that its not UK advisers that are doing the mis-sales and there is no consumer protection.

Cook_County

You said in previous posts that you are a resident of Germany.

How have you reported the existing pension plan on your annual German tax returns (seeing that it is not tax approved in Germany).

How does Germany tax the lump-sum withhdrawal/transfer? How does Germany tax the QROPS?

Cap_Scarlet

dunstonh wrote: »

What is the critical yield?

What is that!! :eek:

Cap_Scarlet

Cook_County wrote: »

How have you reported the existing pension plan on your annual German tax returns (seeing that it is not tax approved in Germany).

Why would I need to do that - I am not making contributions?

dunstonh

Cap_Scarlet wrote: »

What is that!! :eek:

In very simple terms, its the amount the alternative will have to make each year to pay the same benefits as the final salary scheme. Hence why it is a vital bit of information (and called critical)

If the QROPS requires say 3% a year growth as the critical yield then you may think that is achievable. However, it it requires 15% a year then its likely not to be.

By the times half these unregulated QROPS sellers take their chunk, you would not be surprised to see figures of 20% a year or thereabouts being needed. just to pay the same amount.

Cap_Scarlet

dunstonh wrote: »

In very simple terms, its the amount the alternative will have to make each year to pay the same benefits as the final salary scheme. Hence why it is a vital bit of information (and called critical)

If the QROPS requires say 3% a year growth as the critical yield then you may think that is achievable. However, it it requires 15% a year then its likely not to be.

By the times half these unregulated QROPS sellers take their chunk, you would not be surprised to see figures of 20% a year or thereabouts being needed. just to pay the same amount.

Yes I can see what you mean - that's very helpful - thank you

Cook_County

Cap_Scarlet wrote: »

Why would I need to do that - I am not making contributions?

What has that got to do with anything? If it grows why does Germany not tax the growth each year on your tax return? Have you got German advice on this?

Cap_Scarlet

Cook_County wrote: »

What has that got to do with anything? If it grows why does Germany not tax the growth each year on your tax return? Have you got German advice on this?

No I haven't - but if a tree falls in the forest and nobody sees it does it make a sound?

Seriously though - does that happen in the UK?

Cook_County

Cap_Scarlet wrote: »

No I haven't - but if a tree falls in the forest and nobody sees it does it make a sound?

Seriously though - does that happen in the UK?

The UK allows income/gains within some foreign pension plans to escape being taxed on a UK resident if a UK return is filed claiming migrant member relief (very rare) or treaty relief (fairly common). If these claims are not made, the UK charges tax on the income/gains within the plan as they arise rather than when distributed.

You need professional qualified advice in Germany.