Transferring A NHS Pension To A QROPS

If you have a UK National Health Service pension and want to transfer your fund overseas, time is of the essence.

NHS pension rules allow a pension switch overseas – but only to a Qualifying Recognised Overseas Pension Scheme (QROPS).

The government banned transferring public sector pensions to a QROPS in April 2015, but failed to draft the wording of the regulations correctly and left a loophole that still lets expats and foreign workers with NHS pension rights switch their funds to a QROPS in a European Economic Area (EEA) country.

The Treasury and HM Revenue & Customs (HMRC) have spotted the gap and are now moving to plug the hole, so new regulations are expected imminently that stop NHS pension transfers to QROPS in their tracks.

Transferring an NHS pension to a QROPS can take several weeks to arrange and the government has not indicated when the rules will alter.

Meanwhile, the opportunity is still available for those who wish to make the change.

The current NHS overseas transfer guide and application pack lays out how to transfer to a QROPS.

Five steps for switching from the NHS to a QROPS

Here are the steps:

  • Make sure you qualify for a NHS/QROPS pension transfer

The rules are complicated and you need to know when you joined and left the NHS pension scheme.

Generally, a QROPS transfer is not available if you left the NHS scheme before January 1, 1986

A QROPS transfer is also not possible if you have less than two years qualifying membership of the NHS scheme or a transfer in to the NHS scheme from a personal pension.

Joining a QROPS must be within 12 months of leaving the NHS scheme and before reaching normal pension age.

  • Check that the overseas pension receiving the transfer is on the HMRC QROPS List

The list is published every two weeks, generally on the first and 15th of the month. The QROPS must be on the current list on the date of the transfer, not on an old list.

You can view the current HMRC QROPS List here

  • Check special circumstances do not apply

Read these NHS pension transfer documents:

Leaving early and transferring out guide – This explains what happens to NHS pension benefits if someone leaves or rejoins the scheme

Pension sharing on divorce or dissolution of a civil partnership – A general guide to NHS pension sharing when a relationship ends

  • Request a NHS pension transfer value

This is only available when a retirement saver is no longer employed by the NHS.

If someone still works for the NHS, the figure will be an estimate.

If someone no longer works for the NHS, the figure is a guaranteed amount

The transfer value is

  • Take professional QROPS pension advice

If a QROPS transfer involves a fund of £30,000 or more, an IFA must certify that the pension saver has taken professional advice that considered safeguarding any benefits that might be lost on switching funds

Choosing a suitable QROPS

Several EEA countries offer QROPS. The EEA is all the European Union States plus Norway, Iceland and Liechtenstein.

One of the most popular QROPS financial centres in the EEA is Malta, which is an independent state within the EU and offers ‘third party’ QROPS.

These pensions allow the retirement saver to live anywhere in the world except the UK while leaving their pension based on the island.

Many other QROPS choices are available within the EEA, and a Malta QROPS may not be a suitable product for every retirement saver.

A qualified and experienced independent financial adviser will cover QROPS suitability as part of an advice package.