When Is A QROPS Not A QROPS – When It’s A ROPS!

Why does it seem that anything to do with pension transfers and other investments is invariably couched in its own mostly incomprehensible language aimed at confusing even intelligent expats?

The answer is straightforward - it's all about the money received by IFAs in hefty commissions and charges for advice. British investors don’t get much help from the regulator, even when things go terribly wrong, as most product providers aiming at expat retirees are based outside the UK. According to the experts, few expats are clued up about the intricacies of QROPS as regards their ability to expand financial options and save within a single, tax-efficient package, making them vulnerable to exploitation by those claiming to have their best interests at heart.

It’s hardly surprising would-be expats get confused by the jargon, as even the product’s name can be misinterpreted. QROPS – Qualifying Recognised Overseas Pension Scheme – as an acronym has now been shortened by HMRC to ROPS, interpreted as ‘all QROPS are ROPS, but not all ROPS are QROPS’. At this point, investors could well be forgiven for feeling confused or simply giving up. However, the first thing to do for those tempted to activate a pension transfer is to check out HMRC’s regularly updated ROPS list, usually published on the first and 15th of each month. Transferring to a product on the list is safe, but using an unlisted pension will trigger a fine.

Another conundrum concerning QROPS is that, although HMRC lists those registered and qualified, they’re not actually approved by the financial watchdog, which simply takes the word of the product providers that all is as it should be. The latest list identifies some 1,515 QROPS listed, based in 28 countries, but this number tends to change frequently with no reason given. Strict rules as to expats’ countries of residence govern pension transfers, and retirement savers can also transfer funds between two QROPS as well as transferring workplace pensions as part of opting for early retirement at the age of 55.