As the government flags up concerns about rogue advisers and fraudsters preying on pension transfers at home and overseas, it’s time to cast an eye over how this impacts QROPS for expat retirement savers.
Some critics are looking at the reduced number of financial centres offering the expat pensions as a signal that interest is waning in QROPS.
But like any other financial product, the overseas pensions are more about the quality of investment rather than the volume of money moving abroad.
As qualified financial advisers, some of these experts and providers are taking their eye off the ball.
Transferring a pension is always about security, investment return and the benefits of moving cash.
Scrutiny needs upgrading
Although fewer financial centres are home to QROPS, how the pensions they offer expats comply with HM Revenue & Customs scrutiny and deliver the desired retirement outcome is what matters.
If there was a single QROPS scheme that rigorously played within the rules and provided the tax and investment benefits promised to customers without any risk or hassle, then that would be enough for most retirement savers.
The problem with any failures in transferring pensions overseas are not unique to QROPS and should not be taken out of context.
Plenty of UK pension schemes are scams run by fraudsters, just as many QROPS are operated by perfectly reputable providers who deliver on their promises.
In fact, many well-known UK financial brands also have a QROPS or two in their portfolio, such as ABN Amro, Investec, Aviva, Zurich and Friends Provident.
Billions switched to QROPS
They line up alongside the European Union and many local government schemes for civil servants and public sector workers.
Since QROPS were introduced in April 2006, around 115,000 retirement savers have switched £10 billion from UK onshore pensions to the offshore schemes, according to HMRC statistics.
The latest HMRC QROPS list shows 1,035 pensions are available across 30 financial centres. The number peaked at 3,754 QROPS in 45 financial centres in April 2015, before qualifying rules were tightened by the UK government.
Compliance problems do not rest solely with QROPS but the dodgy advisers who purport to service the market for unwary expats recognised by the latest government crackdown.