QROPS pension transfer

qropsquery

Hi Experts,

I currently work in UK and recently changed jobs. My ex-employer has given me an option to transfer my CARE scheme pension pot to a new scheme. My question is can I transfer it via QROPS to my home country now but still continue to work in UK for 10 years? I intend to take payments from my QROPS transfer only after 15 years when I will not be in UK. In a nutshell, I want to continue working in UK and transfer my ex-employer pension pot to grow in a different country.
Please help.

Aegis

qropsquery wrote: »

Hi Experts,

I currently work in UK and recently changed jobs. My ex-employer has given me an option to transfer my CARE scheme pension pot to a new scheme. My question is can I transfer it via QROPS to my home country now but still continue to work in UK for 10 years? I intend to take payments from my QROPS transfer only after 15 years when I will not be in UK. In a nutshell, I want to continue working in UK and transfer my ex-employer pension pot to grow in a different country.
Please help.

You can do that, but it's often better to leave your existing schemes in situ, especially where they are defined benefit schemes guaranteed to provide a certain value throughout retirement. That's a general rule for employer pensions rather than being specific to QROPS, but a transfer to a QROPS is just like a transfer to another pension scheme with the added complexity of dealing with multiple jurisdictions during the transfer.

qropsquery

Thanks Aegis.
I did not complete the vesting period so my ex-employer has given me the only option to transfer it to a new pension provider and so I cannot keep it as it is. I am worried whether I am eligible for QROPS transfer to a different country or no because I still want to continue working in UK for some time(6-10 yrs).

Please look at the point two of the below text which I got from qropsdirect website faq section. (i cannot post the link )

Who Qualifies for a QROPS Pension Transfer?

• Any UK/EU expatriate citizen between the ages of 18 and 75 may apply for a QROPS Pension Transfer of an existing or 'frozen' UK/EU pension
• Any UK/EU non-expatriate citizen provided that you have a clear intention to become an expatriate within the next 12 months
• A QROPS Pension Transfer may also apply to ANYONE who has officially worked in the UK or any EU member country for any length of time
• QROPS Pension Transfers for US citizens can be difficult, as most of the schemes are not available to US nationals although any other nationality may apply for a QROPS Pension Transfer

Could you please let me know your comments?

Aegis

If your long term intention is to retire outside the UK, you'd likely find yourself able to make the transfer, especially if it's to your home country. The issue you'll find is that such transfers can only be to schemes with specific relationships with HMRC (hence the "qualifying" part of the name). Such schemes have additional costs involved to maintain this relationship, therefore many private QROPSs are expensive.

If your balance is relatively small, which is likely the case if you are getting a short-service treatment, then it is unlikely to be in your best interest to consider a QROPS at this time.

You may as an alternative consider a UK pension to which you can contribute more over your working life. Once you have a larger pension scheme and have finalised plans for leaving the UK, that's probably a better time to consider an international transfer.

qropsquery

Aegis, you are awesome. You say such meaningful things in few words. I understand that you are saying that since it is a small amount it is better for me to accumulate it first and then transfer it later. However, I am not that much excited in making contributions to my current pension provider, so in case I go ahead now itself and do the transfer to my home country via QROPS to HMRC list of approved schemes am I voilating any tax law because I want to continue working in UK for next 5-10 years? I will take benefits only after I have left UK in future. Sorry if I am sounding too stupid but I am completely new to this and apart from you and this respected forum I have no one else who can advise. The QROPS advisers of my home country are just pushing me to go ahead because of obvious reasons.

Kit_Carson

qropsquery wrote: »

Please look at the point two of the below text which I got from qropsdirect website faq section. (i cannot post the link )

Who Qualifies for a QROPS Pension Transfer?

• Any UK/EU expatriate citizen between the ages of 18 and 75 may apply for a QROPS Pension Transfer of an existing or 'frozen' UK/EU pension
• Any UK/EU non-expatriate citizen provided that you have a clear intention to become an expatriate within the next 12 months
• A QROPS Pension Transfer may also apply to ANYONE who has officially worked in the UK or any EU member country for any length of time
• QROPS Pension Transfers for US citizens can be difficult, as most of the schemes are not available to US nationals although any other nationality may apply for a QROPS Pension Transfer

Could you please let me know your comments?

That website is totally out of date and full of inaccuracies.

I note this comment "The Trust typically will be used to purchase an Offshore Personal Portfolio Bond, this is effectively a 'wrapper' that can hold the ideal spread of investments suitable for a pension portfolio"

Yeah, an offshore bond pays a hidden 8% commission. There is already a wrapper- the QROPS- why pay for two?

Look for lower cost UK alternatives, as has been mentioned.

DonM

Hi,

there is no point in transferring into a QROPS since it will be treated exactly the same as a UK SIPP, which tends to be cheaper.

The reasons for anyone to choose a QROPS are down to the benefits they provide, none of which will apply to you because you are not based outside the UK.

Transfer to a UK SIPPS and revisit closer to the time you intend to leave the UK.

For disclosure, I work for Liberty Wealth who provide professional QROPS advice