Since George Osborne’s 2014 Budget announcements regarding UK pensions there has been much discussion around the impact on pension transfers and QROPS.
QROPSreview has previously reported that many of the announced changes have actually been in place since 2006. However, much of the pension flexibility that has got many people excited will not apply to those with final salary pension schemes.
Final salary pension schemes are a type of ‘defined benefit’ scheme where you are promised a certain income in retirement. The amount received is based on a range of factors including; length of time served, your final pensionable salary and the scheme’s particular accrual rate.
If a final salary scheme is not yet being paid out then it is possible for this to be transferred into a QROPS.
Because these types of pension schemes tend to be very expensive and risky for providers they will often offer a very generous cash transfer value.
Indeed, in the past few years QROPSreview has seen a large increase in the number of people enquiring about this possibility.
However, there has been talk in government circles that rules maybe introduced to make it harder to transfer pensions away from public sector final salary schemes such as those operated by the NHS, police or fire service.
The growing realisation amongst the expat community about the benefits associated with transferring these types of schemes into a QROPS has got the government worried. If too many people withdraw from these schemes, they fear the government bonds in which they are invested could take a big hit.
Expatriates who have a puclic sector final salary pension scheme, and would like to benefit from a QROPS, should waste no time in contacting a specialist Independent Financial Advisor.
Getting an adviser’s analysis which is a comparison of what you’ll get from your final salary scheme and what you could get on retirement after transfer to a QROPS is the best way to assess whether to proceed with a transfer.