SIPPs VS QROPS

The introduction of SIPPs (Self-Invested Personal Pensions) really opened up options for retirement saving in the UK. If you live in the UK and are looking for flexibility and control over your pension then a SIPP really is the way to go for you.

If however you are leaving the UK, or you have already left the UK and you will be a non-UK resident for 5+ years, then the benefits of a QROPS transfer generally outweigh SIPP benefits, see the table below:

	SIPPS	QROPS
Investment Options	Full UK pension restrictions (Range of investments)	Greater flexibility
Pension Tax	Taxed at Source (Benefits paid Net – i.e. tax is first deducted before benefits are paid out)	Funds Paid Gross. (i.e. the full benefits are paid, without holding back tax, which is beneficial if you now live in a pension tax friendly jursidiction!)
Pension Benefit Options (How Can You Take Benefits?)
After Age 55 (Age 50 before Apr 2010)	25% Tax Free Lumpsum	30% Tax Free Lumpsum
Before Age 75	Unsecured Pension (Leave balance invested & draw income which is set by acturial rates.)	Income Drawdown Options
After Age 75	Alternatively Secured Pension (Leave balance invested & draw income – Income limited to 90% of income rate set by acturies for a 75 year old.)	Income Drawdown Options
After Age 55 (Age 50 before Apr 2010)	Option to Purchase Annuity (A guaranteed fixed amount payment until you die.)	No Need to Purchase Annuity
Death Benefits (What Happens If You Die?)
BEFORE Taking Any Benefits(I.e. Before Retirement)	0% Tax Charge	0% Tax Charge
BEFORE Age 75 & AFTER Taking Benefits	35% Tax Charge	0% Tax Charge
AFTER Age 75 & AFTER Taking Benefits	Up to 82% Tax Charge	0% Tax Charge
Subject To Lifetime Allowance
	Yes	No
What’s Suitable For Where You Are Living or Planning To Live?
In The UK	Yes	No
Outside the UK	No	Yes

If you qualify for either a SIPP or a QROPS, contact us and we will introduce you to a pension adviser who can assist you.