7 Reasons why you should transfer your UK pension to a QROPS

With a growing pensions crisis in the UK and outstanding transfer values available for offshoring, there has never been a better time to consider a QROPS.

We give you 7 good reasons…

1. Your beneficiaries could lose up to 45% to the UK tax man

Let’s face it, we all want to take advantage of legitimate tax breaks and limit the amount of tax we pay.  By transferring your UK pension to a QROPS there are a number of significant tax advantages, from income tax, death duty, and capital gains tax.

2. You can take up to a 30% tax-free lump sum at 55

When you turn 55, a QROPS allows you to drawdown a percentage of your total pension fund as a Pension Commencement Lump Sum. Depending on the jurisdiction and the percentage you drawdown, your lump sum could be exempt from UK tax.

3. You may end up losing your UK pension altogether

A growing number of people in the UK have ended up in defined benefit pension schemes that are in deficit. In other words: technically bankrupt. If you are among them, a QROPS may be the best way to protect your pension.

4. You can consolidate several pensions into one structure

It’s possible that you have saved for retirement by taking out more than one pension. The catch here is that holding multiple pensions means you are exposed to multiple, complex and costly charging structures. Among other negatives, this makes it difficult to tell if you are getting value for money.

By contrast, a QROPS allows you to consolidate multiple pension funds into a single pot. Not only does this help to keep costs in check, but it also makes your life simpler.

5. Nobody else should control your investment decisions

The fact is that default investments offered by many pension providers do not necessarily perform.

With a QROPS, you can take steps to make sure your pension fund produces the growth and returns that you need to maintain your lifestyle. In the process, you can also match your investments to your retirement destination rather than being restricted to UK-biased investments.

6. No-one needs Life Time Allowance charges

Over the recent years, the Life Time Allowance (LTA) cap has changed frequently. The trend, however, is firmly downwards and currently stands at £1 million. If you exceed the LTA, your tax liability is potentially punitive – unless you choose the offshoring option to protect yourself.

For example, when you transfer your UK pension to a QROPS, its value is tested against the LTA at that stage. After that, your pension fund falls outside the LTA’s scope even if it continues to grow.

7. You deserve to enjoy maximum peace of mind

QROPS is tried, tested – and proven. Since its launch in 2006, thousands of people with UK pensions have moved their pensions offshore smoothly and securely. By 2013, 10,000 QROPS transfers were happening annually – and the figure will almost certainly keep rising.

Contact us for more information on how to transfer your UK Pension to a QROPS