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QROPS achieve unprecedented popularity

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The fact that the QROPS (Qualifying Recognised Overseas Pension Scheme) is currently achieving unprecedented popularity will perhaps surprise those with no prior knowledge of the HMRC-approved product. With 42 international jurisdictions now offering more than 3,400 of the offshore pension plans, financial experts from around the world are impressed with their rising prominence.

The QROPS is a popular and proven product that usually appeals to the British expat community, whose members now open over 10,000 accounts each year. The face of retirement planning is changing as a result and as more people consider leaving the UK to start a new life overseas, QROPS uptake is set to escalate. But what’s been keeping the QROPS from the public eye?

Although the QROPS was introduced by HMRC to ensure Brits living and working abroad are ready for retirement, the taxman stringently regulates the terms and conditions of their use. This added complexity is perhaps enough to dissuade retirees from taking a closer look; the same reason why anyone considering a QROPS will comprehend the importance of speaking with experts beforehand.

HMRC-compliance often proves enough to prevent a QROPS provider from operating, as illustrated most recently by Singapore, where newly-applied regulations have since rendered the country incapable of compliance. With drastically restrictive changes often being applied seemingly overnight, the past decade’s host of sudden rule changes have surely been detrimental.

The ongoing regulation is commendable of course, because QROPS misuse directly affects pensioners here in the UK, by depleting their collective state pension fund. Transferring a state pension beyond British borders to an offshore jurisdiction can be complicated and can often present less experienced savers and investors with many perils and pitfalls to avoid.

However, when it comes to retirement, HMRC are perhaps the most notorious for making mistakes. The list of qualifying jurisdictions is updated fortnightly, but in the past, many operators once deemed compliant have been unceremoniously removed. When this happens, retirees have to try to transfer to an alternative plan provider without incurring any applicable transfer fees.

Confusion reigns amongst casual investors and because of the seemingly fickle nature of QROPS regulation, it’s always best to consult a reputable and reliable financial advisor who’s established and known to cater for their clientele.  Consulting with QROPS experts will always prove cost-effective, so when it comes to retiring overseas, expats should also be sure to enjoy their added peace of mind.

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By David Robinson
Editor
Expats Village

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