Understanding QROPS Accounts


  • Who can open a QROPS pension fund?

United Kingdom taxpayers planning to move outside the UK, to work or retire, and have pensions that are not in a state pension plan are qualified to transfer their pension to a QROPS pension. International workers, such as American expatriates, with an established UK pension who plan to move back to the United States or work overseas but outside of the United Kingdom are qualified to transfer their pensions to a QROPS pension.

You can arrange your QROPS as soon as you arrive in your new country of residence, or in some cases, you may set it up before you leave the country. It’s best to check with the rules of your specific pension jurisdiction, but the most common way to set up QROPS is after you move to your new country of residence.

  • What is the minimum opening balance for a QROPS pension fund?

A basic QROPS transfer requires roughly £25,000. It possible, however, to combine multiple pension funds into one QROPS fund in order to achieve this amount.

  • What are the costs associated with opening and maintaining a QROPS pension fund?

There are three main charges/fees associated with opening and maintaining a QROPS fund. The first is the setup costs, which average 1% of the value of the fund. Next are the annual management charges which vary depending on the provider and type of investment package. Last is the underlying fund charges which will also vary based on provider and packages. A regulated QROPS adviser can assist you in shopping around for the best option.

  • What tax savings can I expect when I transfer my UK Pension to a QROPS pension fund?

QROPS can reside in a different tax jurisdiction from the pension holder allowing the pension holder to maintain their account where lower tax rates can improve fund growth. Income from the pension benefit, however, is based on the residency. There is no annuity or ASP purchase requirement and all funds remain with the pension holder.

  • I want to make sure my beneficiaries receive my investments in the event of my death, will QROPS help me do this?

QROPS eliminates the UK Inheritance Tax regulation. Beneficiaries will receive the full fund upon the pension holders death.

  • I am concerned that my ex-spouse might have rights to my UK pension fund, will QROPS offer me more protection?

Pension holders with QROPS are protected against business partners, creditors and ex-spouses; and in some jurisdictions there may be protection against future creditors as well.

  • What do I need to do to get started?

In some cases the costs associated with establishing the QROPS outweigh the benefits of transferring your pension. The first step to transferring your UK Pension to a QROPS is to seek out a qualified, licensed, and regulated independent investment adviser that specializes in QROPS.