Taking Advice on QROPS and Pension Drawdown

A QROPS pension scheme serves to be an excellent option for those who want to retire permanently outside UK. It comes with comprehensive flexibility in handling pensions. QROPS also comes along with apparent tax as well as investment benefits. Using qualifying recognised overseas pension, the UK private pension owners are able to benefit the most out of it.

Pension drawdown is also called income drawdown/ withdrawal or pension release. It comes along with many benefits, like higher control on where it has been invested, tax efficiency and high flexibility. Moreover you do not have to purchase any annuity within QROPS.

Pension drawdown however comes with some disadvantages also- firstly one has to decide the type of income required along with the additional benefits you would receive. It also causes you to loose the ownership of your funds. You also loose the death benefit; moreover you do not have investment growth anymore. Finally, once you choose your income type, it cannot be altered again.

Since all these schemes and plans are very complicated, it becomes important to discuss them out with a reliable financial advisor. Wrong choice of schemes can lead to problems in future; in the same manner right choice can help you streamline your demands and financial provisions with much ease. Qualifying recognised overseas pension especially needs to be chosen with much care. There are many financial advisors who advise on the QROPS plans. A wrong choice might result in significant loss owing to penalty demanded by HMRC. Many have suffered enormous fine when the scheme they choose were not meeting the HMRC guidelines.

Choosing From the QROPS List

QROPS list is a list of QROPS pension schemes which you can use for transferring your pension. One interesting fact here is however that even the presence on the list doesn’t guarantee confirmation of verification by the HMRC.

HMRC clearly mentions that in case the scheme had been wrongly mentioned in the list, the amendments can be made later also and severe penalties can be imposed because of the wrong choice made. Most of the financial advisers recommend various products and are more focused towards finding the right products. This has led to many penalties in the past.

Many times the product might seem lucrative and a good option, this doesn’t mean they will surely attain approval. If you opt for QROPS appearing on the QROPS list, not approved by HMRC you can face tax penalties more than 55%. The approved QROPS are those which are within the rules and regulations of HMRC as well as the local pension rules. As a result it is true that good research work and comprehensive study in the situation is necessary.

Following are the advantages of a good qualifying recognized overseas pension scheme:

· You can control considerable tax reductions in your pension and you are able to consolidate your pensions into one qualifying recognized overseas pension scheme.

· You are able to pass the pension funds to the beneficiaries and thus are exempted from UK Inheritance Tax.

You have pension trustees as well as scheme provider closer; you do not have to purchase an annuity within qualifying recognized overseas pension scheme.

QROPS Pensions – Maximum Returns With Comfort

When the Her Majesty’s Revenue and Customs, HMRC announced the launch of the QROPS plan, the main intension was to provide the pensioners a new option to invest and use the existing pension funds, and use it more profitably. QROPS stands for Qualifying Recognised Overseas Pension Scheme, in which the pensioner has the option to transfer his or her pension funds to another country. Such an easy transfer of QROPS pensions enable the pensioner to use the funds for investment and other sectors, which can ensure better returns and better margin. Additionally, such QROPS pensions scheme also provide tax benefits, which is one of the main features of this plan.

However, having said that, there must be a mention of the inherent risks related to the investment in such QROPS pensions fund. Investment is always subjected to the existing market risks and prevailing interest rate, besides various other financial factors which actually determine the returns from such investments. It is always advisable to rely on an expert guide or consultant who is well versed with the rules governing QROPS pensions, and have extensive knowledge of the procedures and plan. Such consultants often have a direct contact with the leading QROPS providers. QRPOS providers are companies and financial institution, who provide the investment options for pension funds, via QROPS scheme.

The consultant with whom you will have an agreement and understanding, shall study the market on your behalf, and understand your existing requirements and expectations, and according suggest you the appropriate QROPS provider, who can ensure that your pension funds are utilized the right manner. There are several options which are advertised by the QROPS providers. But, it is you who will need to understand and comprehend the rules governing the pension fund’s investment portfolio, and take the proper decision of investment in the most useful and relevant investment portfolio.

The QROPS pensions plan was actually devised for those pensioners, who wish to relocate to any other country besides UK after retirement. However, keeping in mind the expats and citizens from other countries who have worked in UK, and have accumulated pension funds, this scheme was extended to citizens of all countries, provided they have worked their tenure in UK, and have pension funds deposited in their bank accounts. For further and detailed information related to QROPS pensions, it is always advisable to contact the best QROPS consultant for better options.