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Summary

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 transferring QROPS back to the UK might be an ideal option for you.

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

With the upcoming abolition of the Lifetime Allowance (LTA) in April 2024, you might be wondering how this affects your pension planning. Previously, the LTA, capped at £1.073M, limited how much you could contribute to your pension without facing extra charges. Its removal means you now have more flexibility in how much you can save into your pension, whether that’s through a QROPS or a UK SIPP.

However, it’s crucial for you to understand the cost differences between QROPS and UK SIPPs. QROPS annual charges typically range from £800-£900 for pension pots over £100,000, while comparable UK SIPPs might only set you back £100-£200 plus VAT, or even nothing at all.

This significant difference in annual fees highlights an opportunity for you. If you’re currently using a QROPS, switching back to a low-cost UK SIPP could save you a considerable amount over time—estimates suggest savings of around £6,000-£7,000 over ten years are possible.

If you’re a UK resident looking to cut down on QROPS costs, considering a transfer back to domestic providers like AJ Bell could be a wise move. For expatriates, moving into FCA-regulated International SIPPs might offer a way to reduce annual fees while keeping the flexibility of a QROPS when living abroad.

Remember, though, your financial situation is unique. Always seek personalised advice to understand how these changes affect you directly. But with the LTA on its way out, it’s the perfect time for you to reevaluate whether sticking with a higher-cost QROPS still makes sense. Exploring transfers might uncover significant savings for you.

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.

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