UK Pension Scheme Restrictions

The UK has restrictive legislation around pension schemes. For those people with UK pensions (non-state), who live outside the UK, there is the opportunity to get their money into a more favorable jurisdiction by transferring to a QROPS.

These restrictions include:

  • Heavy tax liability – between 20% to 82% even if you are not in the UK.
  • Often no named beneficiaries allowed – when you die only your spouse can benefit.
  • Little to no investment flexibility.
  • By age 75 you have to take an annuity (otherwise you face an 82% tax charge).
    • Annuity rates are currently around 2 to 3%.
    • This low annuity is taxable at 21%.
  • Very poor/slow fund/pension growth.

Depending on the selection of your QROPS jurisdiction, many of the limitations of UK pension funds can be avoided. Within your chosen jurisdiction there will sill be any number of funds to choose from, with varying flexibility and options.

Contact us to speak to an authorised financial advisor.