SIPPS To Replace QROPS As The Way Forward For Expat Pensioners

Published:  2 Jun at 6 PM
Want to get involved?

Become a

Featured Expat

and take our interview.

Become a

Local Expert

and contribute articles.

Get in

touch

today!

QROPs is no longer the default option for retired expats.

Qualifying Recognised Overseas Pension Schemes, better known as QROPS, came in some ten years ago and were subsequently glorified as the best option for Brits determined to retire overseas. They were also welcomed with open arms by the army of expat independent financial advisors lurking in every favourite retiree destination from Spain to the far reaches of Southeast Asia. However, it seems the days of QROPS as the best option may now be numbered as several legislation changes have reduced their benefits to consumers.

These legislative changes by the British taxman had the effect of equalising the advantages of a transfer to an FCA-based in and regulated by the British authority, thus removing the threat of poor advice given by unregulated, unqualified IFAs working in favourite British expat retirement hubs across the world. Many such don’t have licenses to operate, nor are they regulated by the UK authority, meaning there’s no consumer redress should things go horribly wrong.

One alternative favoured by regulated IFAs is the UK-based pension referred to as an International Self-Invested Personal Pension or SIPPS, which provides all the major QROPS benefits. It can consolidate all personal pensions into a single plan, allow flexible access for the age of 55 and has far lower charges than a QROPs. Importantly, SIPPs are protected via the UK’s FCA regulations as well as by the Financial Services’ Compensation Scheme, neither of which can be had via a QROPS.

Charging is fully transparent and strict rules apply to any investment held within the pension itself, with the charges themselves far less than those of a QROPs. Savings can amount to thousands of pounds every year, thus adding to the growth of the funds themselves. For expats approaching retirement, it’s important to understand that many IFAs in popular expat destinations including Spain do not have licenses allowing them to recommend international SIPPS, meaning they push QROPS as the answer without giving any alternative.

For most expat retirees, it’s the safest idea to have their pensions administered in the UK rather than overseas, as UK law protects their life savings from being demolished due to poor advice, high charges and, worst of all, unscrupulous IFAs more interested in their commissions than in their clients’ welfare.

Comments » No published comments just yet for this article...

Feel free to have your say on this item. Go on... be the first!

Tell us Your Thoughts On This Piece:

RECENT NEWS

Celebrating Hanukkah In The Netherlands

As the year draws to a close and more and more of your daily life is conducted in the darkness of winter, the Jewish fes... Read more

Why The Netherlands Is The Best Place For Expats To Start A Business

Practica Coaching offers various coaching programmes, tailored to help you take that next step in your career or to help... Read more

How To Deal With Difficult People At Work

I was brought to tears by my boss once in my life. I was 21, inexperienced and a bit naive - just like a 21-year-old sho... Read more

7 Dutch Christmas Traditions To Incorporate Into Your Festivities

Whether this is your first Christmas in the Netherlands or you just want to start celebrating the festive season the Dut... Read more

How To Get A Car In The Netherlands: A Guide For Expats

Moving to a new country can be stressful. There is a lot to take care of, including transportation such as a car. Mobili... Read more

Dutch Tongue Twisters To Master Your Pronunciation

Learning Dutch is challenging - especially when it comes to the pronunciation - but if you really want to put yourself ... Read more