What is a QROPS?

It is a Qualifying Recognised Overseas Pension Schemes (QROPS)​

A QROPS is an overseas pension scheme that meets Her Majesty’s Revenue and Customs (HMRC) requirements. QROPS have existed since the 6th April 2006 when the UK brought in pension legislation in response to an EU requirement on the freedom of capital movement. The goal was to help simplify pension planning for those living overseas with UK pensions. It allows UK and non-UK residents to consolidate their UK pensions into a pension scheme, specifically designed to accommodate the foreign exchange needs of those who live abroad.

How does a QROPS work?​

QROPS function in the same way as your existing pension

It is a tax-free wrapper that allows you to hold and invest pension assets for retirement or beyond. QROPS operate beyond UK tax laws and so protect investors from possible future changes in UK pension regulation. QROPS can be beneficial, depending on your situation. In terms of investments, a QROPS can hold many of the same regular assets as your UK pension, whilst also allowing for additional currency benefits.

What is a QROPS transfer?​

The consolidation of your UK pensions into a recognised overseas pension scheme

You can achieve this by requesting, completing and submitting a ‘transfer-out pack’ to your existing UK pension provider. QROPS are highly regulated, so your current pension provider will require several additional forms to satisfy their compliance processes. Completing a QROPS transfer is rather simple from the client’s side, as it is the QROPS and your existing UK pension provider which will do much of the leg work, alongside your financial adviser.

Why use QROPS?​

You should consider using QROPS if you are UK or EEA resident with pensions over the old Lifetime Allowance

A QROPS can be an effective financial planning tool if you’re a UK or EEA resident with significant UK pension savings. Initially, it was most suitable for individuals whose UK pension or SIPP pot was approaching or had surpassed the former lifetime allowance (LTA), which stood at £1.073m, until it was abolished in 2023. Currently, your decision to use a QROPS should be based on a range of factors, including your long-term residency plans and specific financial circumstances that you should discuss with your IFA.

Lifetime Allowance (LTA) Charge

In the past, one of the significant advantages of QROPS was its ability to avoid any future issues with the UK’s lifetime allowance (LTA) and associated tax charges. As of 2023, however, the LTA, which capped pension savings at £1,073,000, has been abolished in a surprise move by the UK Chancellor. This change means that any pension savings, no matter their size, will no longer endure taxes of 25% or 55% based on the LTA. However, there is much speculation that the LTA will return in one form or another, so a QROPS is a useful tool that could be used to future-proof for any such changes. If UK resident, then this rationale needs to be very well-thought-out, whilst if resident outside the UK, then there are other factors that make a QROPS a great option.

Beyond UK Rules

The UK pension legislation does not govern QROPS. So QROPS transfers protect investors against any future changes in UK pension legislation. However, QROPS holders in the EEA must note that they would fall back into UK legislation and taxation if they moved to another unapproved QROPS. Additionally, if they moved beyond the EEA within five years of the transfer, they would be subject to an Overseas Transfer Charge (OTC) since 2017. They also need to be tax resident outside the UK for 5 consecutive years before accessing benefits, in order to not be subject to UK taxation rules.

Investment Choice

QROPS provide investors with greater freedom over how they wish to invest their portfolio in comparison to many UK pensions. However, a broader choice does not automatically mean better performance. For some investors, this can help to reduce overexposure to UK assets.


Your UK pension provider will only transfer a GBP value into your QROPS. Inside your QROPS though, you have the freedom to move your pension into one or more currencies. Some expats prefer to match their pension to the currency of their retirement country. It helps to avoid currency fluctuations and be sure of the EUR or USD amount they will receive each year from their pot. They can also make payments in different currencies, so you can truly hedge your portfolio against any exchange rate changes in the future.

Tax Benefits

Capital gains tax does not apply to the growth of your QROPS. So, like your UK company pension, final salary pension, or defined contribution pension, you will not face taxes on any growth within the pension wrapper. In some instances, QROPS permits a 30% tax-free lump sum, as opposed to a 25% maximum in the UK. On a pot of £1m for example, this creates an additional tax-free income of £50,000. However, this needs to be caveated, as many countries will not allow for a tax-free lump sum to escape income taxes, so this extra 5% could be redundant.

Local Tax Rates

If your country of residence holds a Double Taxation Agreement (DTA) with your QROPS jurisdiction (typically Malta), your QROPS provider can pay you gross income from your QROPS. You are then free to pay your local taxes in your country of tax residency. Having extensive DTA’s is why Malta is one of the longest standing and well regarded QROPS jurisdictions. Along with its EEA status, which means that no OTC 25% tax is applied to any transfer, so long as the client is also resident in the UK, EEA or Gibraltar, and does not become non-resident within 5 years.

Avoid Annuities

From Age 55, you can decide when and how much you wish to withdraw from your QROPS. There are no obligations to purchase an annuity. Some investors prefer to take a higher income during their early retirement years to enjoy their more active years. Others prefer to take their 25% tax-free PCLS and take the remainder gradually. You are free to decide withdrawals at any point. Many schemes in the UK are not modernised for the pension freedoms that now exist, and they must be converted to an annuity or transferred to another scheme that will allow for flexible access, like a SIPP or a QROPS.

UK Residents

QROPS remain a potentially valuable financial planning tool in the UK, though they have been historically underutilised. UK Advisers often lacked comprehensive knowledge of QROPS. Previously, the small group of UK residents utilising QROPS were those who had professional tax advisers who knew of their fantastic LTA planning benefits. However, with the abolition of the LTA in 2023, the utility and relevance of QROPS in relation to the LTA has changed. While they may no longer serve to reduce LTA risk, QROPS may offer other benefits depending on your individual circumstances and needs. There is also the possible, if not probable, return of some form of LTA or equivalent, in the future with a new government.

Final Salary Schemes

Most people refer to Final Salary or Defined Benefit (DB) schemes as being gold-plated. They are immensely valuable, and often people don’t appreciate just how lucky they are to have one. That is true in many instances. A client will likely be worse off by transferring their Final Salary pension to a QROPS, as the benefits aren’t worth giving up, but they are certain circumstances where a transfer makes sense, and QROPS are a great scheme to transfer too, especially if the pot is large and/or you live overseas.

Disadvantages of QROPS

25% Tax Outside EEA

QROPS were introduced to create an even playing field for non-UK residents with UK pensions. However, HMRC believed some were primarily using QROPS to avoid UK tax and access their pensions early. On the 9th March 2017, a 25% Overseas Transfer Charge (OTC) was declared on any transfers where the client is not resident in the same country as the QROPS or not resident in the UK, EEA or Gibraltar if the QROPS was in the EEA or Gibraltar. There are some negligible exceptions to this.

Bad Financial Advice

A broader investment choice is not a bad thing. However, we have seen instances where Financial Adviser’s have placed a QROPS client in high-risk and high fee structured notes, beyond their level of understanding. UK pensions do not allow clients to invest in such assets. It is vital to ensure your QROPS portfolio is in line with your attitude to risk and return. Never be afraid to directly ask your Adviser if they are receiving any form of inducement or commission to place you in a particular asset or fund. Better more, ask for this in writing. Adviser commission is a key driving factor in bad financial advice. 

There are also many people who were advised to use a QROPS when their pot was not anywhere near the old LTA, and many of the benefits of a QROPS sold to them could also be obtained with an International SIPP. This is advice that wasn’t technically wrong, but a higher quality and more transparent level of advice should have been obtained from a firm like Cameron James. If this applies to you, then we may be able to help, so get in touch.

Exhausting Your QROPS

QROPS provide clients with access from Age 55 and greater control over their retirement. However, there is an obvious danger here that clients could exhaust their pension savings too early. Technically, there is nothing to stop a client withdrawing all of their QROPS on their 55th birthday. While we would typically advise against this, there would be nothing the QROPS provider, or we, could do to stop them. This applies to all flexible access pension schemes, and not just QROPS, however.

Potential QROPS Deregistration

Just because a scheme currently qualifies as a QROPS, provides no guarantee that it will continue to do so moving forward. QROPS providers must re-notify HMRC every 5-years that they are continuing to be a QROPS. Any reputable QROPS provider is not going to forget to complete its most important piece of admin every 5-years, but it highlights a point. That is why we only use QROPS providers with a reputation and relationship with the HMRC.

Are QROPS Good?

QROPS can be an extremely valuable financial planning tool.

Statements such as ‘all QROPS are bad’ or in the more distant past ‘all QROPS are good’ are misleading and unfounded. A QROPS can be an excellent and highly valuable financial planning tool. At the same time, it could be used with terrible effect, causing serious damage to a client’s pension and family wealth. For example, a client living in France with a £1.5m UK pension could be advised a QROPS and invested in a well-diversified portfolio. Creating huge potential future tax savings and excellent returns. In contrast, a client in Dubai with a £1.5m UK pension could be advised a QROPS and invested in an undiversified and high-risk portfolio. Creating a tax bill of £375,000 on transfer and terrible returns. A tool is only as good or bad as the craftsman wielding it, and the same applies to QROPS and financial advisers, so make sure you do your homework, and find an informed and trustworthy adviser before you go making any such massive decisions.

Are QROPS a scam?

You should not proceed with the transfer advice if you doubt your Adviser’s integrity​.

My expat neighbour told me QROPS are a scam. My expat colleague told me QROPS are a scam and he lost all his money. My UK IFA told me QROPS are a scam and only sold by unscrupulous offshore Advisers on high commission. We can confirm that none of the above statements are true. They are indeed things we have heard clients say before, though. As outlined in the above “Are QROPS Good” they can be used to great or terrible effect. This is dependent on your own situation. That is why taking qualified advice from an experienced Adviser is essential. You should not proceed with a QROPS transfer if you have any doubt about your Adviser’s integrity.

How long does a QROPS transfer take?

QROPS transfers usually take longer than other UK pensions.

QROPS transfers increase the complexity of paperwork that the Adviser & Client need to submit and the amount of admin the UK pension team needs to complete. That is because the UK pension provider has additional checks to complete. Additionally, QROPS providers cannot utilise the online Origo transfer portal, which negates the requirement for physical transfer out forms. The quality of Adviser paperwork is essential in minimising QROPS transfer times. That is why we pre-complete all application forms and documents for clients to review, amend, and sign. It saves our clients time and reduces errors.

Are QROPS low cost? What is LTA?

QROPS are not low cost but save you tax and have other benefits.

QROPS are not a low-cost solution. They are a more expensive financial planning tool than a SIPP. For example, on a £250k transfer, a QROPS provider can charge a set fee of £645 with an annual fee of £895. The 10-year cost equals £9,595. On a £250k transfer, an International SIPP provider can charge a set fee of £0 with an annual fee of £180. The 10-year cost equals £1,800. A QROPS is £7,795 more expensive over 10-years. All prices exclude for VAT.

So why would anyone choose a QROPS? The reasons to consider a QROPS have evolved over time. Prior to the abolition of the LTA in 2023, EEA residents with a large UK pension pot, such as £1.2m, used QROPS to avoid the LTA charge of 25%. However, with the LTA now removed, other factors will determine the suitability of a QROPS, such as residency plans and overall financial situation.

How are QROPS taxed?​

No tax on growth, only on withdrawals. Same as a UK Pension.

Like any UK pension, there is no tax on the growth within a QROPS. However, local tax applies to withdrawals from a QROPS. That is the same for every UK pension. As such, when you take withdrawals or pension income from your QROPS, you must declare this income on your tax return in your country of residence. If a Double Taxation Agreement (DTA) is in place between your QROPS jurisdiction and country of residence, then your QROPS provider will pay the money to you gross. Currently, Malta has 71 DTA’s in place, which includes the typical Expat retirement locations. It makes Malta one of the most influential QROPS jurisdictions for most clients.

Can I transfer my QROPS back to the UK?

Yes. The process is simple. It is also a growing trend.

After their inception in 2006, QROPS was the buzzword in expat financial planning. Expats globally were advised by their IFA to transfer their UK pension to a QROPS. There was a rule of thumb that if you were outside the UK and not intending to go back, then QROPS was the answer.

For many clients, this would have been useful advice. However, for others, this would have been unsuitable. The increased costs of a QROPS did not outweigh the benefits of utilising an International SIPP, as they were in little danger of exceeding their LTA. Many QROPS clients could significantly reduce their costs by transferring their QROPS back to an International SIPP.

With annual QROPS fees of up to £2,500 and annual international SIPP fees as low as £180, a client could reduce their annual trustees costs by a multiple of 14.

With annual QROPS fees of up to £2,500 and annual International SIPP fees as low as £180, a client could reduce their annual trustee costs by over ten times, which would result in a 92.8% saving. These savings would add £23,200 to the value of their pension pot over the course of 10 years, not taking into account the compounding effect of lost growth.

Furthermore, all Advisers have heard clients say ‘I am never going back to the UK’. That is true until something changes: your career, your health, your spouse, or just wanting to be closer to your parents or grandchildren. For many, this is the catalyst of researching what to do with their QROPS. Our Advisers have helped numerous clients reduce their costs and transition their pension back into a UK scheme.

Can I transfer my QROPS to another QROPS?

Yes. You could reduce your costs.

Clients often ask how they could reduce the costs of their QROPS. Many expats have been correctly advised a QROPS transfer in the past. QROPS have existed for 13 years, so this may have been some time ago. For one reason or another, you have lost contact with your original Adviser. Perhaps you moved, they moved, or you were unhappy with the service.

The QROPS market has higher competition now than before. It is suitable for clients as it has driven down QROPS fees. So you may be in a QROPS which is the correct option, but your annual QROPS fees are excessive. With annual QROPS fees on a £250k pension being as high as £2,500 and as low as £895, a client could reduce their annual QROPS costs by more than half. They are saving themselves £16,050 over the course of 10 years.

While the possible cost savings are attractive, some clients may also complete a QROPS transfer to another jurisdiction. That would allow them to choose a QROPS jurisdiction such as Malta, which is more in line with UK pension freedom rules. This solution would enable them to access their 25% tax-free lump sum from the of 55 and have flexible access.

What is the HMRC QROPS list?

The HMRC QROPS list gets updated on the 1st and 15th of each month. It is a QROPS List of the schemes that have notified HMRC that they fulfil the conditions to hold an overseas pension scheme title.

Importantly, though, HMRC cannot guarantee that the schemes on the list are indeed recognised overseas pension schemes and are not liable for any information on the website. That causes some confusion for expats but makes sense. For example, a QROPS provider could do something contradictory to HMRC’s QROPS requirements, but HMRC could not know this information in live time.

How should I use the HMRC QROPS list?

Check if your QROPS provider is there.

The first thing to do when receiving QROPS advice is to search and check if the QROPS provider your Adviser is recommending is on the HMRC QROPS list. The list is organised in A to Z by the jurisdictions. If you are in any uncertainty, ask your Adviser to confirm the location of QROPS or get in touch with us.

Each country then lists the providers who have notified HMRC. Search for the name of your QROPS provider. In this instance, we searched for Malta. If your proposed QROPS provider is on the list, then this is undoubtedly a good start as it proves the company is at least in contact with HMRC.

You will still need to discuss this with your Adviser. Along with asking them to confirm that your QROPS is in line with HMRC’s requirements and that it is a recognised overseas pension scheme. If you are unsure, you can Contact Us.

Is Cameron James on the QROPS list? ​ ​

No. We are not a QROPS provider.​

We provide our clients with financial advice. Ie. Which QROPS provider is most suited to their requirements. The QROPS provider replaces their UK pension provider such as Aegon, Scottish Widows or Mercer. That QROPS provider will appear on the QROPS list. We then advise our clients on all portfolio and financial planning matters and instruct the QROPS provider to take actions such as making withdrawals once the client has signed the paperwork.

How do I transfer my pensions into QROPS?​

The transfer is simple. The advice is complex.​

So when we say simple, we mean in relative terms. The transfer process is bureaucratic and slow, but from experience, our Advisers and Admin know the process and how to navigate it effectively. However, receiving the correct advice on your transfer is more complicated. It is an important decision and what that could be very beneficial to your finances, so you must do your homework on your Adviser.

How do I take money out of my QROPS? ​

Signing a Pre-completed Form

Completing withdrawals is simple. You are free to withdraw as much or as little of your QROPS as you wish from your 55th birthday. While we would advise ensuring your portfolio last for your retirement years, the choice is yours. We will pre-complete all forms for you with instructions for signing and returning. As due diligence, you will also need to prove that the bank account you have nominated is indeed your bank account. The bank account location can be anywhere in the world.


QROPS can provide clients with more flexibility and control over their UK pensions.

An International SIPP is the same as a QROPS in the respect that it is a tax-free environment for non-UK residents to consolidate their UK pensions. It provides clients with more flexibility and control over their UK pensions.

If you’re a resident outside the EEA, then an International SIPP would likely be the most appropriate transfer solution for you, rather than a QROPS. Additionally, now that the UK Chancellor has abolished the Lifetime Allowance (LTA), the size of your pension pot is no longer a decisive factor. Previously, the LTA cap was set at £1.073m. With this cap removed, your choice between an International SIPP and a QROPS should be based on factors such as your specific financial needs, residency plans, and long-term financial planning strategies.

Qualifying Recognised Overseas Pension Scheme

If you are an EEA resident but planning to move beyond the EEA within 5-years, then an International SIPP is likely the most suitable option, unless your pension is at or above £1m. International SIPPs have lower set-up and annual costs than a QROPS. On a typical example of a £250k UK pension, an International SIPP would be £7,795 cheaper for you than a QROPS solution over ten years. You should only utilise a QROPS if the benefits outweigh the costs. If you think a SIPP is more suitable for your needs, learn more on your International SIPP page.

Should I transfer my pension into a QROPS?

This depends on your situation.

Whether to transfer your pension into a QROPS depends on your personal circumstances. While previously, two key considerations were whether you were an EEA resident with a pension pot that was close to the old LTA of £1.073m, and your intention to remain in the EEA for at least five years, the scenario has changed with the abolition of the lifetime allowance in 2023. Now, the primary factors to consider include your long-term residency plans, tax situation in your home and potential host countries, the size of your pension pot, and your broader financial circumstances.

Good quality QROPS advice is essential if you are considering a transfer. Even if you decide against a QROPS transfer, it will have been a valuable exercise understanding why it is not suitable for you.

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Dominic James Murray

My career in financial services began in 2010 during my Bachelor of Science (BSc) Undergraduate degree at Aston University in England. The degree required me to spend a year abroad working with an established organisation.

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