21 April 2010
Overseas advisers predict that sales of QROPS (Qualifying Registered Overseas Pension Scheme) products will increase, according to a recent poll by Skandia International. The research shows that 74% of advisers expect to write more QROPS business over the next 12 months.
QROPS are one of the financial planning considerations for UK expats who have already moved or are planning to move overseas to retire. QROPS can provide investment flexibility and currency options for clients who live abroad (or are planning to relocate prior to retirement). They are an effective way to consolidate UK pension assets gathered throughout someone’s working life in the UK and provide flexibility to allow retirement planning to accommodate their new lifestyle overseas.
Unsurprisingly, advisers cite the most common reason to recommend a QROPS is that income drawn from the scheme is not subject to UK tax. The wider investment choice allowed within a QROPS is the second most common reason that advisers recommend a QROPS while the lack of compulsion to purchase an annuity if the client holds their pension monies in a QROPS falls third on the list. Advisers also recommend a QROPS due to the fund not being subject to UK inheritance tax on death, although this ranks fourth on the reasons to recommend the product to qualifying clients.
64% of advisers said that an offshore investment bond is the most popular underlying investment for a QROPS followed by mutual funds (23%), stocks and shares (9%) and then cash (4%).
In April, Skandia International announced an exclusive tie up with QROPS company Concept, creating the new ‘Aurora Quantum’ which is one of the most competitively priced QROPS options in the market. The exclusive charging structure puts Royal Skandia’s offshore investment products at the heart of a portable pension product for UK expats.
Rachael Griffin, head product law and financial planning at Skandia International said:
“As expats continue to retire abroad, we’re seeing a growing awareness of QROPS and the benefits that this type of product offers those who are retiring outside of the UK, which may be why so many advisers are expecting to see an increase in the amount of QROPS business they write. A QROPS can be an appropriate investment for many expats living abroad and offers a level of flexibility. such as different currency options, not found within a UK pension scheme.
“Having recently linked up with Concept to offer a competitively priced QROPS it’s encouraging to see this level of anticipated adviser support for these schemes.”
This press release is for journalists only and should not be relied upon by financial advisers or customers.