Advantages of Shifting Your Pension Account

Are you staying outside UK for several years? Have you transferred your pension to the residing country or you have kept it in UK only? Have you ever thought of transferring your pension fund to other country? If not, then it’s time you think about it. Leaving your pension fund in UK actually doesn’t facilitate you in any way. You may fear that you will have to pay heavy tax for transferring your pension. But in reality, your fear has no base.

Have you heard of Qualifying Recognized Overseas Pension Scheme? This scheme is especially designed for the UK retirees who are leaving abroad. According to this scheme you don’t need to pay tax for transferring your pension to your residing country or to some other UK approved country. This scheme allows you to maximize your benefit by relocating your pension fund.

Qualifying Recognized Overseas Pension Scheme has several advantages. Let’s have a look at them.

Tax Benefit:

This is the major advantage of the Qualifying Recognized Overseas Pension Scheme. Transferring your pension account will not only save your income tax but your inheritance tax as well. Yes, it is true that you will have to pay income tax to the government of the country that you have selected for transferring your pension account. But this tax will be much less than UK income tax.

Leaving Your Pension Fund for Your Heirs:

One of the major benefits of QROPS is that your remaining pension fund can be transferred to your heir upon your death. 

Flexibility of QROPS:

A Qualifying Recognized Overseas Pension Scheme can be denominated in various currencies. The currency risk associated with QROPS is very less.

If you still have some queries about this specialized scheme you can seek Qrops advice from professionals specializing in QROPS.

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It is advantageous to shift your UK pension schemes to QROPS

You are living outside UK for several years. Have you considered moving your pension funds? If not, you must consider it now. There is no benefit in leaving your money in UK. Moreover you have to bear heavy tax which you can save by shifting the funds.

Qualifying Recognised Overseas Pension Scheme is designed to help people living overseas to transfer their UK pension account. It will enable you to move your pension to any other country from UK. It is not stated in the rules that you have to shift it to your residence country. Thus, relocate your funds in such a way that you can get maximum from it. 

Other than these, there are several advantages of Qualifying Recognised Overseas Pension Scheme. They are

Tax benefits

Transferring your UK pension funds to QROPS will not only save your income tax but also inheritance tax. On the more as there is no stated regulation on the country of transfer you can certainly select a country where your fund will grow tax free. But remember you have to pay tax on this income where you are residing. This tax is comparatively much lower. 

Flexibility of investment

A QROPS scheme can be denominated in a range of currencies. Thus with this scheme currency risk is minimum.

With pension funds you can build up an investment portfolio exactly matching your requirements. You can change your investment structure any time.

Leave your remaining funds for family

Unlike UK pension, the remaining funds in QORPS can be entirely transferred to your heir upon death. This is a major advantage of this scheme.

Inspite of these benefits, you may feel that it will be a problem to transfer your account. But with right support from expert financial advisors it becomes easy. So, find out an appropriate professional who can best guide you in this regard.

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Get to know some more about income annuity

Well at first I am going to explain what annuity is. This is a financial term used to define a series of payments made to you by an insurance company in lieu of payments made by you to the later. The annuitant receives the amount for a specific period of time. Annuity payments are basically of two different types, ordinary annuities and annuities due. Under general rules annuities are payments made to the holder at regular intervals until the investment matures. Annuity payments are basically made by the holder at the onset of a period and are known as annuities due. Income annuity is the best of all for retired individuals or ones who have entered their old age. Income annuity provides the holder with the maximum benefits.

This special annuity bears lower risks and is favorable for those who want to invest their hard earned money for a profitable cause. Income annuity is mostly considered the same as immediate annuity. Well let me explain as to what immediate annuity is. This is a highly beneficial investment since the investor concerned is supposed to receive the payments as soon as he invests his money in immediate annuities. Like immediate annuity income annuity involves least risk for the holder. The investor on putting in a substantial amount of money is supposed to receive the payments along with accrued interests from the insurance company occurring at regular intervals.

Retirees benefit the most from income annuity because it helps them earn some more on a regular basis. Post retirement the income of an individual is restricted. This special annuity helps them earn payments at a series of intervals for a particular span. Income annuities offer annuitants the opportunity to receive regular payments for around 10-15 years of time or for the rest of their lives.

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How does a QROPS pension transfer overseas work?

QROPS or Qualifying Recognized Overseas Pension Scheme is an overseas pension scheme that gives excellent retirement planning benefits. To enjoy this benefit you don’t have to have to pay any unauthorized amount.

 Only you have to see that it full fills requirements in order to recognise by HMRC or Her Majesty's Revenue and Customs which will permit UK pension funds to transfer to QROPS.

Any UK citizen or residing outside UK or planning to shift outside within next 12 months between the ages of 18 and 75 is eligible for QROPS Pension Transfer.

The parties involve in the transfer process are:

• UK pension provider
•  QROPS administrator.
• An intermediary

 A financial service firm will manage your pension on behalf of the company he is working for. So there is an involvement of the parties,-the financial administrator and the company. Sometimes there may be an involvement of an intermediary who will facilitate the whole process. These intermediary works for a number of QORPS pension under various jurisdiction. Thus it provides best solutions to you which will be suitable for your jurisdiction.

 A professional fee, front fee and transfer fee will be charge for their services. Investment advisors charge investment management fees when investment is done within the QORPS

.A letter of authority or LOA is asked to fill up that allows the agent to contact UK pension administrator to get information regarding benefits.

You may have to fill up the transfer forms that will be sent by the QROPS administrator.

The agent enquires regarding the transfer value, protected rights to transfer, and other details like:

• Name as on the pension documents
• National Insurance number
• Date of birth
• Name of UK pension scheme and policy number

 

A QROPS has a Trust that will ensure your investment to mange properly. It is  tax efficient cost effective.

These points above will sure make your QROPS transfer easier. However it requires choosing right financial advisor, so do your research selecting one.

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