Can I cash in my ex-QROPS?

Oswulf

I have a Guernsey ex-QROPS. My QROPS provider has a scheme for cashing it in, which would save me quite a lot in fees. Is this legitimate? What should I look out for?

The scheme itself involves transferring my existing ex-QROPS to Aurora Libertaï Access International Pension Plan which apparently allows fully flexible access, albeit subject to a 1% withdrawal penalty.

I'm not resident in the UK, and there are no tax implications for the country where I am resident.

Aegis

Why can't you withdraw directly from your ex-QROPS? Is it due to age?

Oswulf

Not due to age. To quote my ex-QROPS provider:

"I am pleased to confirm that the Guernsey pension legislation changed with effect from 2 October and that flexible access is now permissible under Guernsey Law. The rules of your existing scheme do not allow flexible access, however we are able to offer full and partial access through a new scheme and consequently in order to access your pension you will be required to transfer to our Aurora Libertaï Access International Pension Plan.

The conditions for us to allow flexible access is that the Member is of pensionable age i.e. 55 years old or more and that the Member has been a non-UK tax resident for a period greater than 5 consecutive UK tax years. I have reviewed our records and am pleased to confirm you satisfy both requirements and therefore we are able to offer you the option of flexible access."

bostonerimus

I'm not sure how much experience there will be of the practical aspects or QROPS withdrawals, but one thing seems constant about these schemes - the fees keep mounting up.

kidmugsy

Ask them if you can start off by transferring just 10% of it. (Because I smell a rat.)

Aegis

Oswulf wrote: »

Not due to age. To quote my ex-QROPS provider:

"I am pleased to confirm that the Guernsey pension legislation changed with effect from 2 October and that flexible access is now permissible under Guernsey Law. The rules of your existing scheme do not allow flexible access, however we are able to offer full and partial access through a new scheme and consequently in order to access your pension you will be required to transfer to our Aurora Libertaï Access International Pension Plan.

The conditions for us to allow flexible access is that the Member is of pensionable age i.e. 55 years old or more and that the Member has been a non-UK tax resident for a period greater than 5 consecutive UK tax years. I have reviewed our records and am pleased to confirm you satisfy both requirements and therefore we are able to offer you the option of flexible access."

On the surface there's nothing particularly dubious about that. The current scheme doesn't have the features you need, so an internal transfer to one which does have those features seems like a reasonable thing to offer. Just be sure of what charges you pay both initially and ongoing - modern offshore pensions don't need to cost more than about £1,000 a year but the fees can be much higher for legacy schemes (or scams, for that matter).