QROPS are widely available but come with some restrictions for expats seeking to move their retirement money overseas.
With almost 1,300 current schemes across 28 financial centres, a QROPS pension is almost available for any expat.
Expat is the first key word.
QROPS are designed as a place for retirement savers who have savings in a UK pension to move their money for ease of access from another country.
The rules say you cannot have a QROPS unless you are an expat – or a foreign worker who has spent some time in the UK but now lives in another country.
Are you really an expat?
An expat must have severed their financial ties with the UK and not just someone who is on assignment overseas for a couple of years.
In simple terms, you are a Brit who lives permanently overseas or a foreigner who once lived in Britain but have left to make your home elsewhere.
The next complication is the European Economic Area (EEA) – that’s the European Union plus Norway, Iceland and Liechtenstein.
If you are an expat living in an EEA country, you can move your UK pension to a QROPS in any other EEA country.
For example, you can retire to Spain and have your pension hosted in The Netherlands.
Overseas transfer charge
But you cannot move your pension pot to a QROPS outside the EEA without paying the overseas transfer charge– which comes to 25% of the value of the pension pot transfer.
If you are an expat living outside the EEA, you can only move your pension fund to a QROPS that is based in the same country as where you live.
For example, if you are a British expat in Australia, you can switch your money into a local QROPS without any fear of paying the overseas transfer charge.
One tip here is Hong Kong is a recognised financial centre for QROPS – and because the city is part of China, anyone living in China can transfer pension cash from the UK into a Hong Kong QROPS.
It’s a good idea to find a professional financial advisor to help negotiate a way through the maze of geographical and tax issues that restrict if an expat can have a QROPS offshore pension.