The number of British expats switching their retirement savings to offshore pension schemes is falling – but the average value of a transfer is still rising, according to the latest official figures.
Fewer expats are transferring their UK pension savings to offshore QROPS shown by a drop of 48% from 9,700 transfers in the 2016-2017 tax year to 4,700 transfers in the last tax year.
But the average value of a transfer climbed 25% from £125,773 to £157,447 in the same period – a record for QROPS transfers.
The figures show that despite a blip in 2010-2011 when the average transfer value rose and then fell the following year, expats have increased the amount of money switched between UK onshore pensions and offshore QROPS every year.
The QROPS switching peak was 20,100 transfers worth £1.76 billion in 2014-2015 with an average transfer value of £87,652.
Transfer charge knocks market
However, the 2017-2018 number of transfers is the second lowest in the history of QROPS, which were introduced in April 2006. The lowest number of transfers was 2,500 in the 2006-2007 tax year.
The drop in transfers coincides with HM Revenue & Customs introducing an overseas transfer charge.
The charge is a 25% tax on transfers paid by expats on the value of funds switched out of the UK or between QROPS.
The charge is subject to residence and employment rules that exempt expats from paying the charge, mainly applying if the expat and QROPS are both based in the same financial jurisdiction outside the European Union or if the QROPS and expat both live in the EU, even if they are based in different EU countries.
QROPS transfers 2006 – 2018
|Tax Year||Number of Transfers||Aggregate Transfer Value||Average Transfer Value|