Articles from Asia Pacific Pensions
While investigating the various options open to you in regards to the retirement aspect of your financial planning, you may have heard the word ‘QROPS’ being used. The problem is that many people don’t even know what a QROPS is, let alone whether or not it’s a financial planning option they should consider. So before we start, QROPS stands for Qualifying Recognised Overseas Pension Schemes. The key words being the first two of course, which signify that the scheme in question QUALIFIES and is RECOGNISED by the UK tax authorities. In order to assess your suitability for a QROPS, you need to have a good idea of your future plans in terms of retirement. A QROPS is a type of pension scheme which allows you to transfe your existing UK pension (occupational or private – the state pension isn’t eligible for transfer) into an overseas alternative. However, to stop every single British citizen from making a QROPS transfer, there are some restrictions in place. So, firstly, you need to be thinking about making a move abroad for your retirement – you can’t transfer your UK pension into a QROPS unless you’re already living overseas, or are planning to do so in the immediate future. MAKING THE RIGHT FINANCIAL PLANNING DECISIONS FOR RETIREMENT Another financial planning condition that you’ll need to satisfy in order to take out a QROPS is that you MUST NOT have already bought an annuity. If you’ve already bought an annuity product for your UK pension, you won’t be able to consider a QROPS transfer. QROPS can offer great tax benefits for expats, but before you go jumping into any financial planning decisions, you’ll need to ensure that any QROPS you’re considering is registered as an approved scheme by HMRC. You can find out by calling their helpline, visiting their website, or contacting your financial planning advisor. When trying to decide whether or not a QROPS would benefit your overall financial planning strategy, there are some other points worth bearing in mind. Firstly, if you’re looking for a pension option that will give you greater investment flexibility, then a QROPS could be a great idea. Additionally, in terms of the fluctuating economic situation and how this can affect currencies, with a QROPS, you often have the option of drawing funds in the currency of your choice.
SO WHY SHOULD BE CONSIDERING A TRANSFER RIGHT NOW?
There are several reasons why you should be looking to transfer your accrued UK pension benefits at this time, namely: * Declining pension fund returns and increased charges * UK final salary pension schemes at record deficit levels * Highest transfer values ever quoted are available now * Proposed changes to UK pension transfer legislation FEEL FREE TO ASK US FOR HELP QROPS also often allow greater flexibility when it comes to taking a lump sum – and as well as being able to draw this in a number of different currencies, depending on the specific QROPS, this can sometimes be completely tax free. In order to weigh up all of the potential benefits, it’s important to compare QROPS from across the whole marketplace – and remember that while QROPS are only available to expats, you don’t need to reside in the same country as the one from which you’ve sourced your QROPS. When it comes to your financial planning, it’s vital that you take the time to consider the potential benefits and pitfalls of the product your thinking about. It can be hard to make these pivotal decisions yourself, so whether you’re looking into the QROPS market or anything else, it’s vital that you seek advice from a qualified financial planning advisor. Our advisors are always on hand
so do feel free to contact us if you need any help.
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