How to Reduce Your QROPS Cost Through Transfer QROPS Back to UK
If you are looking to transfer your QROPS back to the UK, then you have come to the right place. Cameron James have over 10 years experience transferring UK pensions including transfer QROPS back to UK.
Our CEO and Independent Financial Advisor, Dominic James Murray, explains how to avoid missing CETV transfer expiry dates and handling your CETV in the most efficient way in the video below.
Why Would You Transfer QROPS Back to UK?
Why would someone want to transfer QROPS back to UK? The first reason is, maybe when you were living abroad in Dubai, France, Spain, Holland, the US or anywhere else, you were told to hold a QROPS.
The reason is that because it’s what everyone was told to do. Back in 2010, in general, if a client lives abroad, it equals to QROPS. That was the equation back then. There wasn’t any analysis really going into it, and everyone abroad needed to have a QROPS. It was a new hot thing that everyone should have a QROPS, it was considered the best thing to do.
The UK Lifetime Allowance
When we actually look at QROPS, the advantages of a QROPS over a SIPP now are very limited. It is down to the Lifetime Allowance (LTA) in the UK, which currently stands at £1.073M. As such, unless you are pushing or have exceeded your LTA, there are now actually very few benefits of holding a QROPS compared to holding a SIPP.
The biggest disadvantage that you’ll probably already know is the cost. QROPS’ cost per annum is around £800-£900 for a pension pot over a £100,000. Compared to a SIPP in the UK, a lot of providers will give it to you for free or £100-£200 each year plus VAT. It is very cheap compared to QROPS. So, on an ongoing basis over the course of ten years, you could save yourself £6,000-£7,000 by transfer QROPS back to UK SIPP.
If you’re a UK resident, we would transfer you from a QROPS back into a UK SIPP such as AJ Bell. If you’re living outside of the UK, we would either transfer your QROPS to an International SIPP. A UK-based SIPP (FCA-regulated) which allows non-residents of the UK to apply for it to reduce your costs from your QROPS.
The Problems With Transfer QROPS Back to the UK
One of the biggest problems we find with people trying to transfer QROPS back to UK we had is the cost that it requires from your existing QROPS scheme. As an example, we have someone who contacting us saying that he have a £50,000 QROPS pot. The problem is, the pension pot performance has been terrible, he is locked into an eight-year term with the underlying bond, and he already lost 20%-30% of the portfolio value.
Instantly, it’s just a massive alarm bells everywhere. The advisor who put this person on the QROPS had commission-based advice. The client has been ripped off that they have exit penalties on the underlying fund and the platform. For us to even get involved in that case, we can’t even work with that client without effectively working for free or even, at worst, actually losing money. This is why, you need to be meticulous with your QROPS and understand exactly what is inside your QROPS. Keep in mind that it is very complicated to do a QROPS to a SIPP transfer.
Reasons Why UK SIPPs Providers Avoiding QROPS Transfers
Many SIPP providers in the UK will not accept transfers because they don’t want anything to do with it. Things such as frozen assets, liquid assets, structured notes, anything like that, they just don’t want it. However, International SIPP providers are normally far more open because they’re in the international market. They understand QROPS, a lot of the directors probably even formerly worked at QROPS companies. As such, they’re more favourable and allow you to transfer into an International SIPP. If you’re confused about what is the difference between a SIPP and International SIPP, click the link here.
Let Cameron James Help You to Transfer QROPS Back to UK
If you are trapped inside a situation where we explain above, don’t hesitate to book yourself in for a free initial consultation with us. Our IFAs will help you to provide with the best solution to your QROPS trouble. Hit the link below, and talk with one of our regulated and qualified IFAs.