13-04-2010, 02:49 PM
QROPS stands for Qualifying Recognized Overseas Pension Scheme and is a pension scheme that is offered to those who hold a UK pension plan but reside in another country. There are tremendous financial benefits if you plan accordingly.
As it stands, an individual can claim early retirement at age 50, but that is about to change. It has been entertained that the early retirement age is going to be raised to 55. Early retirement is usually granted because an individual must retire due to poor health or they are in a special occupation. After retirement, individuals may choose to live elsewhere, which is what QROPS (Qualifying Recognized Overseas Pension Scheme) is for. It allows an individual to receive their pension immediately as long as the pension assets are transferred to a registered QROPS (Qualifying Recognized Overseas Pension Scheme) pension plan in the resident country.
Benefits
The pension money is tax-free. Other benefits include the fact that you are not required to purchase an alternatively secured pension or an annuity. You may also be concerned about the fact that a standard pension pays in sterling. Through QROPS (Qualifying Recognized Overseas Pension), the pension is paid in local currency. This means that there is no exchange rate risk. There is also no Lifetime Allowance Charge and you are able to invest your money as you please. All of these benefits make transferring your pension worth the time and the effort. The only downfall, it seems, is that there is some loss of protected rights. That includes any rights that were accrued under a defined benefit scheme or any rights that have been contracted out. However, if you move you cannot leave your money sitting in the UK, so it is in your best interest to have your pension transferred to where you are.
As it stands, an individual can claim early retirement at age 50, but that is about to change. It has been entertained that the early retirement age is going to be raised to 55. Early retirement is usually granted because an individual must retire due to poor health or they are in a special occupation. After retirement, individuals may choose to live elsewhere, which is what QROPS (Qualifying Recognized Overseas Pension Scheme) is for. It allows an individual to receive their pension immediately as long as the pension assets are transferred to a registered QROPS (Qualifying Recognized Overseas Pension Scheme) pension plan in the resident country.
Benefits
The pension money is tax-free. Other benefits include the fact that you are not required to purchase an alternatively secured pension or an annuity. You may also be concerned about the fact that a standard pension pays in sterling. Through QROPS (Qualifying Recognized Overseas Pension), the pension is paid in local currency. This means that there is no exchange rate risk. There is also no Lifetime Allowance Charge and you are able to invest your money as you please. All of these benefits make transferring your pension worth the time and the effort. The only downfall, it seems, is that there is some loss of protected rights. That includes any rights that were accrued under a defined benefit scheme or any rights that have been contracted out. However, if you move you cannot leave your money sitting in the UK, so it is in your best interest to have your pension transferred to where you are.