Whatever the size of your retirement budget, it is important to get a pension scheme that will suit your individual needs. If you have decided on a QROPS you have either moved abroad or are about to leave the UK. Either way, when you change your pension plans you have the opportunity to review your entire investment strategy and take advantage of the overseas and perhaps even offshore opportunities that are available to you.
So what criteria can you use to assess the QROPS you have to choose from?
Firstly, consider how a scheme will fit in with your plans for the future. If you need to access a large lump sum to pay off a mortgage or other debts then a scheme that forces you to purchase an annuity at a particular age may not be appropriate.
Similarly, if you have a particular asset that you would like to see transferred into your pension, make sure that your adviser is aware of this and can choose a scheme that both permits that asset class and does not levy charges that are too high.
Your risk profile and the likely length of time before you retire are also relevant. Those with a few decades between the QROPS transfer and retirement may be more prepared to invest in a higher risk product in the hope of a higher return. On the other hand those for whom retirement beckons more urgently may wish to play it safe and choose lower risk products.
Whether tax is the main driver behind your decision to get a QROPS or a secondary consideration, tax efficiency is the key to a financially comfortable retirement. With a QROPS there are potentially two “layers” of tax to take into account. First, there is the jurisdiction where your QROPS is resident. Second, there is the place where you yourself reside. The cumulative effect of both of these layers needs to be taken into account, as the worst case scenario is that you may have to pay tax to two different authorities. However, a well advised QROPS investor will choose a QROPS destination that offers the best tax planning opportunities.
At QROPS.net we appreciate that there is no “one size fits all” solution with overseas pensions. That is why we listen carefully to the needs of each of our clients, and find the right scheme to suit them. In some circumstances we may even able to arrange a bespoke solution.