Moving Abroad?  Take Your Pension Pot With You!

If you’re one of the thousands of would-be expats out there who have taken the decision that the UK is sinking faster than the Titanic and that you’d like to explore your options overseas, we’re right there with you!

It’s a sad fact that the UK is suffering more than many nations around the world from the adverse effects of the global financial crisis, and that there are actually countries faring quite well where there are obvious employment and lifestyle benefits too.  As a result of all of this, the UK is seeing a professional brain drain again, as thousands of well-qualified Britons head off in search of a better life abroad.

Well, the good news for such people nowadays is that the British government has made it easy and even advantageous for you to move abroad and take your pension pot with you!  In fact, if you have over £50,000 invested in a pension in the UK, there could be significant and lasting benefits for you andyour family if you take your pension offshore with you…

The UK government has recognised the fact that increasingly Britons are making not just a temporary sojourn overseas, but that they are moving abroad and establishing lives for themselves permanently overseas.  As a result, they also came to understand that the restrictions surrounding a UK pension were less than appealing for anyone even contemplating expatriating.  As the UK government is keen for every single citizen to have a pension and to take responsibility for their own retirement, they decided that they had to give those who were thinking about moving abroad an incentive to keep on saving.  The incentive comes in the form of QROPS.

QROPS stands for qualifying recognised overseas pension scheme, and it is a scheme into which an onshore pension can be quite easily transferred.  Obviously, if you have a UK pension and you’d like to explore the potential benefits of QROPS for your own personal situation, you need to do so with the assistance of a qualified independent financial adviser.  However, we shall now explore the potential benefits that you could ‘sign up’ for if you do opt into one of these offshore pension solutions.

QROPS are generally located in secure overseas jurisdictions and offshore centres such as Jersey, Guernsey and the Isle of Man.  This should immediately give a potential investor ‘faith’ in the product because such centres have investor protection schemes in place…but do always assess each solution on its own merits.  As QROPS are physically located outside the UK, they are no longer subject to the same restrictions as traditional personal pensions.  For example, you no longer have to buy an annuity with your pension pot upon its maturity.  What this means is that you have far more choice when it comes to bottom line investing, and not only that, your heirs don’t lose out either.  This is because if you die, any funds remaining as a result of the QROPS investment can be willed on to your heirs.  This is not the case with an annuity, once the policyholder passes away, anything left in the annuity is lost.

Not only are these benefits hugely appealing to many, they come with the additional advantages such as the fact that fund holdings within a QROPS can be changed and bank deposits switched by a simple faxed instruction.  You may want to do this if other banks are offering better rates for example.  There is also no bid/offer spread in or out of funds, funds are generally invested in a secure location where you can benefit from investor protection and confidentiality, and income can be drawn monthly, quarterly or annually - from day 1 of investment if you want, subject to minimum age requirements.

We know of one IFA consultancy that can currently offer its clients access to funds where the initial or exit charges have been reduced to 0% - .(JavaScript must be enabled to view this email address) if you want to know more.  Otherwise think about exploring the real benefits of QROPS with your own financial adviser.