Justin Harris, managing director at Switzerland-based advice firm Chase Belgrave, said many UK pension holders are not granting customers the rights due to them under the new pension liberation regime which enabled 100% withdrawals from UK pension pots.
As a result, he said the company has seen a large increase in enquiries about Qualifying Recognised Overseas Pension Schemes as UK pension holders “rush to transfer pensions away from the UK as quickly as possible”.
“There is a large group of people who had been holding off transferring their pensions who have been disappointed and frustrated by their inability to benefits from the pension freedoms they were promised,” he said.
“The good news is that a QROPS can deliver the tax efficient, flexible and cost effective means to access pensions that savers around the world are looking for.”
His comments come after the Association of British Insurers issued a letter yesterday to chancellor George Osborne and the Financial Conduct Authority requesting the removal of a legal requirement for savers with a guaranteed annuity rate of over £30,000 to pay an FCA-authorised adviser for financial advice.
The association said this would remove providers’ current fear of redress or retrospective regulatory action, which is currently preventing them from properly accommodating the new freedoms.
Public awareness
James McLeod, head of pensions at international financial planning firm AES International, said QROPS currently offer some additional flexibility in terms of how they can be invested and drawn down when compared with pre-April UK pension schemes.
“The upturn in interest in QROPS since April is probably a symptom of the increased public conversation around pensions this year, as well as more recent frustration at people being unable to take advantage of the new rules,” he said.
In March, HM Revenue & Customs announced that the rule requiring 70% of the funds in a QROPS to provide an income for life would remain “temporarily” following April’s pensions reforms for schemes based outside of the EU, despite previously proposing their removal.
Despite this, McLeod, said he believes it is still the intention of the UK government to extend the pension full flexibility rules to QROPS, bringing them in line with UK schemes.
