Low Cost QROPS
Many expats with UK pensions may have previously considered transferring their pensions into a QROPS scheme, but have been put off by the high set up costs and ongoing charges of QROPS pensions. This is especially the case for smaller pension pots, in the £25,000 to £75,000 range, where previously the costs and charges would outweigh the benefits of a transfer.
Over the past couple of years, however, the QROPS industry has seen a surge in providers offering ‘low cost’ QROPS solutions for expats with smaller pension pots. Today it is economically viable to transfer a UK pension into a QROPS with as little as £25,000.
Generally, the introduction of low cost/no cost QROPS into the UK pension transfer market is a very positive step, and very much welcomed. However, care still needs to be taken to ensure that the right low cost QROPS is chosen for your particular circumstances.
Limitations on Low Cost QROPS
Despite the market opening up to UK pension holders with relatively small pension pots, there are sometimes limitations associated with certain low cost QROPS products:
Restricted Investment Choice
Some low cost QROPS may offer a restricted investment choice, and you may be forced to invest your pension through a particular fund manager, or on a platform with a restricted range of funds.
Whilst your pension fund may be relatively small by QROPS standards – it may well be one of your largest financial assets – and so do as much due diligence as you can before transferring your pension to a QROPS.
Restrictions on Number of Pension Transfers
Some QROPS providers place a restriction on the number of UK pensions you can transfer into a low cost / no cost QROPS. The number will vary, but if you have more than 2 or 3 UK pensions, then you may find that the QROPS administrator reserves the right to charge an additional fee per pension.
For most people, this will not be an issue, but is something to bear in mind if you do have several small pensions.
No Initial Set-up Fees or Charges with QROPS Adviser
At QROPS Adviser.net, we are of the view that a client should not be put off transferring their pension into a QROPS solely on the basis of cost.
We have used our leverage as a leading UK pension transfer specialist to negotiate with the major QROPS providers to heavily discount or waive all initial charges and set-up fees for QROPS transfers carried out by us.
We are therefore able to make a commitment to all of our clients that there will be no initial or upfront costs charged by the QROPS provider to transfer their UK pension (or pensions) into a QROPS scheme.