British expats undoubtedly make up the largest slice of the market for Qualifying Recognised Overseas Pension Schemes (QROPS) – but international workers are just as important.
Expats may outnumber them by several times, but thousands of international workers mainly from Commonwealth countries have flocked to Britain to work over recent decades.
Most of these workers will have frozen company or public sector pensions.
Rules introduced by the government during 2015 have banned retirement savers from switching public funded pensions offshore.
This covers soldiers, nurses, local authority workers and civil servants.
Who can switch a UK pension to a QROPS?
Anyone with a workplace pension that was privately funded by an employer or themselves can transfer one or more UK pension funds to a QROPS, as can any international worker who is due to leave the UK within the next six months.
Here are some important points to remember if you have a UK pension you might want to switch to a QROPS:
- You can’t transfer the state pension
- Different providers offer varying wealth management solutions, so the size of your fund is not too important – some providers will take funds of £20,000 and the top limit for a transfer in is £1 million from April 6. Until then the cap is £1.25 million
- Where you go after leaving the UK is not relevant to a QROPS transfer – international workers can return home or move to one or more other countries. Again, different providers have to follow varying local regulations about this.
In some cases, you have to live in the place where your QROPS is based, while in others, you can live where you wish and move as often as you want. Malta, Gibraltar and the Isle of Man offer this third party service, while QROPS savers have to live in Guernsey or Jersey to have one of their QROPS
- Check out where you are tax resident against QROPS rules. For instance, the USA tax treats QROPS pensions differently from many other countries, so you need to know your tax status and how moving between countries will affect the cash in your QROPS.
Take professional advice
If you want to switch a UK onshore pension to a QROPS, make sure you take advice from a qualified and experienced international financial adviser who is regulated and licensed to give you the best independent information about your pension transfer.