Can I Transfer My Unsecured Pension To A QROPS?

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For many individuals, that have yet to draw on their UK pension funds, a transfer an overseas pension is an option – providing the scheme is registered as a Qualifying Recognized Overseas Pension Scheme (QROPS).

However, what are the QROPS options for those people migrating who are already drawing on their UK pension funds?

Global QROPS Ltd are UK based independent financial advisers that specialize in providing QROPS advice. Many migrating individuals, that we have spoken to, are unsure as to whether taking benefits from a UK pension scheme prevents a transfer to a QROPS.

The answer to the above question depends on how the benefits are taken. For the migrating pensioners that have already purchased an annuity (secured pension) with their UK pension funds or have benefits paying directly from their employer’s final salary scheme, a transfer to a QROPS is no longer available for those funds. For people that are taking their benefits in the form of drawdown (unsecured pension) QROPS is very much still an option.

Since 6th April 2006, UK pension funds that are drawing down can transfer to another UK registered pension scheme, including QROPS. Indeed, since April 2006 the option to take tax free cash from these funds (at pension age) and deferring income benefits has been available.

However, if a migrating pension member is still within the 5 year QROPS reporting period, the benefits that an individual can take from their QROPS – in respect of the unsecured pension transfer in – would have to be in line with the UK pension income rates or the member could face an unauthorized payment charge.