Nurses, Doctors, Teachers, Soldiers and Civil Service Workers – Last Chance for UK Pension Transfers to QROPS
This is the last chance for unfunded pension transfers to be transferred abroad to a Qualifying Recognised Overseas Pension Scheme (QROPS). It was previously thought that public sector occupational schemes could not be transferred to a QROPS, but there is a loophole that these pensions can be transferred to a QROPS as long as it is not an occupational scheme and it is in the European Economic Area.
This means, teachers, doctors, nurses, soldiers, civil servants, police and firefighters have one last chance to transfer their UK pensions to a QROPS. So, if you want to retire abroad and get your pension out the UK tax net and into the currency and investment of your choice, this is the last chance. HMRC are already discussing how they will close this loophole next April.
This is great news for Brits moving abroad. 1 in 10 Brits now live abroad. If you are moving to Europe,for example, it makes sense to transfer your pension into EUR, so that currency fluctuations don’t affect your yearly pension income in retirement.
Should I Transfer Out of a UK Government Pension Scheme?
Public sector pension schemes are considered to be the gold standard for pensions, and it is questionable how many people would be wise giving up this pension benefit for a pension pot that they can access at any time.
However, the benefits can outweigh the guarantees that are given up if the pension is managed properly. Income tax can be reduced from as much as 45% to 2.5% or even 0% in many cases. Also, there is no tax on death in later years, plus your loved ones receive 100% of your pension pot, plus you get to decide who receives what percentage of your pension pot.
Downsides of Transferring a UK Government Pension Scheme to a QROPS
- You give up any guaranteed the government pension scheme offers
- The pension would no longer be index linked to inflation
- The pension would no longer be under UK pension rules and protection
Advantages of Transferring a UK Government Pension Scheme to a QROPS
- You get to decide which currency you want for your pension, EUR, USD, CHF, GBP, etc.
- You get to decide who gets your pension on death and assign a percentage to which partner or children
- 100% of the pension pot goes to these named beneficiaries on death
- You can decide to take more risk and try to make more money out of your pension or go for ultra-safety and invest in a high interest bank account instead
Which UK Government Pension Schemes Cannot Be Transferred?
Local government schemes are funded and thus cannot be transferred. However, if you work for a council whose pension scheme was moved into the private sector, you may still be able to transfer.
Click here to read more about NHS pension transfers to QROPS at qropsspecialists.com
As the Treasury will force HMRC to close this loophole and it takes three months for a transfer, you must act immediately to have any chance of transferring your pension overseas.
Please contact us for a free pension transfer analysis and ask us about the lowest QROPS fees on the market.