Expat Guide To Switching A Pension To A QROPS

Switching a pension from the UK offshore to a Qualifying Recognised Overseas Pension Scheme (QROPS) can make financial sense for expats.

QROPS are well-known for their tax and investment incentives for expats, but sourcing the right pension and organising the transfer are tasks for specialist advisers.

With more than 1,200 QROPS available in 42 financial centres, finding a pension that matches an expats financial and lifestyle needs means devising a tailor-made plan for each retirement saver.

Here’s a checklist of factors expats need to think about when switching to a QROPS:

Are you really an expat?

Many temporary workers or travellers overseas call themselves ‘expats’ but are still technically tax resident in the UK.

QROPS pensions are only for expats tax resident in a country other than the UK

Get a pension transfer value

A QROPS adviser will need the up-to-date transfer value for every pension fund likely to go into a QROPS. Ask you current pension providers for the transfer value, which is generally valid for 30 days.

Get a schedule of pension benefits

You need details like pension forecasts, spouse pensions if you die and extra benefits such as guaranteed annuities so your IFA can compare plans

Can you get a buy out bonus?

If you belong to a final salary workplace pension, are you expecting a buy-out offer? If not, can you approach your employer to see if they will offer you a golden handshake bonus for leaving the scheme?

Think about your financial expectations

How much cash do you expect to need for a comfortable retirement?

Think about your expat life

Jot down thoughts about where you will live, whether you will move, who you want to inherit any unspent pension funds.

Your adviser will want to know about these factors to make sure you are matched with the right pension.

Think about leaving unspent pension funds to your loved ones

Make provision for your loved ones with a QROPS – your pension does not die with you and you can gift up to 100% of your fund on death unlike 50% of your income as a spouse pension with a final salary scheme

To find out more, contact a qualified and regulated international IFA who can offer the best QROPS advice for the country where you are making your expat life.