The QROPS market is preparing for a new dawn as the well-documented UK pensions overhaul continues to have an impact. In early December, plans were laid out to allow QROPS savers 100% access to their funds upon retirement, a move which –despite mumblings of concern amongst financial experts – will mirror the legislation due to begin in the UK in April 2015.
QROPS were previously required to provide an income in retirement which had to be made up of at least 70% of the funds transferred from a UK scheme, however with the removal of this rule, QROPS providers are predicting that a large number of expats will opt to withdraw funds in their entirety in order to make use of the more generous tax rules the schemes offer.
The new ruling is set to be in place by April, and will also include a requirement for each individual manager of a QROPS to be regulated by the financial body of the jurisdiction in which they operate.
As QROPS have become more appealing to expatriates, the regulation and rules have also improved drastically in comparison to the original 2006 model. Of course, as with any new financial product, teething problems and grey areas are always likely to be uncovered, but the strides HMRC and the QROPS industry have made in the last three or four years to protect those looking to benefit from the scheme has been impressive.
As financial conditions deteriorate in the UK – and the lifestyle that most enjoy remains prosaic at best – the appeal of relocation continues to reach out to those who never previously considered it. As well as the undoubted lifestyle advantages, 80% of those contemplating the move also consider the better tax conditions offered by so many alternative destinations as being an integral part of their decision process, according to research