So much furore and speculation was created by George Osborne’s initial Budget 2014 statement, and his subsequent requirement for a consultation on some major points, the reality at the end of it all was never likely to live up to the over-excitable hype.
Yes, the demise of the annuity – at least in its current form – has been hastened, but aside from this long overdue amendment, the rest of the legislative changes (announced on 22nd July) are hardly going to have half of Fleet Street camping outside number 11 Downing Street.
The 22nd July announcements came as a result of four months of consultation with experts from a range of pension providers, financial institutions and economists, but there wasn’t a great deal of radical changes to report.
QROPS Get a Mention
Osborne went to great lengths to clarify the main issue left over from the Budget and subsequent Queen’s speech. Defined Benefit schemes looked set to have transfer restrictions imposed upon them after the Budget, and this has been confirmed. This means that as of April 2015, teachers, NHS employees, Police and Firemen will be unable to take advantage of QROPS if they decide to retire away from the UK.
Osborne also specified that the Treasury are committed to making QROPS viable as a long term option, also insinuating that there are set to be some new rule changes by April 2015 when revised pension legislation in the UK also kicks in.
More of an insight will be gained in Autumn when the chancellor makes his next statement as a kind of pre-cursor to the Budget 2015, however until then we are likely to see QROPS become a major consideration for those that have already moved – or plan to move – abroad, but have a defined benefit scheme in the UK. The clock is ticking, and once the door closes on potential transfers, expatriates will see the UK-based scheme exposed to the pitfalls of currency fluctuations.