What is a low-cost QROPS pension?

For someone who wants to retire abroad as an expat, they should decide on what to do with their pensions.

Many people often leave their cash tied up in the UK but get their benefits paid from local banks wherever they are. Another option is investing in Qualifying Recognized Overseas Pension Scheme (QROPS).


QROPS is a pension scheme that is recognized by HM Revenue & Customs and allows investors to receive tax-free transfers from different jurisdictions. But just because this solution is sort for by many people, it doesn’t automatically mean that it is right for you.

One thing individuals are always looking for is a low-cost QROPS pension scheme. To help you make informed choices, we have written this guide to explain all the necessary information about low costs QROPS.

When did they start?

When consumers of a particular product increase, it creates a competitive environment for companies supplying that product. And that is what happened with QROPS. When this scheme was first introduced in 2006, many people couldn’t afford the yearly fees associated with it. However, as its popularity began to increase, it led to an increase in its demand. And this led to the advent of low-cost QROPS.

Benefits of a low-cost pension

Many experts believe that these low costs pensions are worth it. With these schemes, individuals pay fewer fees when transferring their pensions and less yearly fees. Increase in demand for low-cost pensions made many businesses to start offering these services.

This, therefore, created an innovative environment where companies offer very affordable solutions. Investors are now offered as low as three hundred pounds on initial transfers and five hundred yearly fees.

But these low costs versions come with some drawbacks as well. For instance, most companies have a limit on how much one should transfer pensions. These maximum limits vary in different companies.

What is a qualified QROPS, and who is eligible for it?

If one invests in unqualified QROPS, should anything happen, they’ll receive less or no compensation at all. It’s therefore essential that before you start investing, you ensure that you’re investing in the right jurisdiction.

A qualified QROPS is a country recognized by the government of UK and is eligible to transfer pensions. These counties provide similar or better protection to their investors than the UK. But there are other countries which offer less protection. It’s thus wise that you have an expert financial advisor recommending which jurisdictions provide excellent protection.

Personal pensions can be transferred to QROPS by personnel inside or outside the UK. But, once the annuity has been purchased, it can’t be transferred. Also, if one’s pension is a final salary, one can only transfer it once payments have begun. Again individuals who haven’t lived in the UK for more than five years may be considered non-residents. Therefore, tax regulations may change.

Final thoughts

Low costs pensions offer an excellent investment opportunity to most pensioners. One can benefit from reduced currency risks, reduced tax fees, as well as circumventing charges. But to secure these benefits, you should have an expert financial advisor helping you out.