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Frozen pension in UK? Why not enjoy it now?

Long-forgotten pension funds are coming up trumps for expats who have been resident outside the UK for more than five years. In some cases it has enabled them to stay here in Spain while many of their compatriots are returning to their homelands.

Recently I came across a statement from a company I worked for over 20 years ago. I had long forgotten that when I left the job I had a pension fund that was frozen until I was 60. The statement projected my pension would pay out around 1,200gbp per year. Wow! Hardly life-changing….I had heard rumours that one could access these funds now through a scheme called QROPS so, being a bit skint, I took it to a financial advisor here to see what he could do.

Within a few days he had discovered the fund was now worth a considerable sum (not saying how much but it had 4 noughts on the end!). Even better, because I had been living outside UK for over 5 years, the fund could be taken as a lump sum immediately via a third party pension company. Happy days!!  The whole process took about 8 weeks.  Since then 3 of our friends now have payments in the pipeline, one of them has dug up three small pensions from days gone by…what a happy bunny he is!

Obviously it isn´t always in your best interests to take it out but at least you have the option. Terry, our (now) friendly advisor, has this to say:

“We often are asked about personal finances but recently UK pensions, often termed frozen pensions, is by far the most frequent enquiry.  You cannot open local newspapers without seeing advertisements for transferring pensions overseas. QROPS [pronounced Q Rops] is the buzz word with all manner of claims and benefits.

WHAT IS QROPS?

Her Majesty’s Revenue and Customs [HMRC] allows you to move UK pensions to benefit from International Pensions rules under Qualifying Recognised Overseas Pension Schemes [QROPS].  If you have a UK Pension you can withdraw 100% OF THE FUND UK TAX FREE if you have been non resident for 5 UK tax years

WHICH PENSIONS CAN BENEFIT FROM QROPS?

UK State pensions cannot be transferred into QROPS. Holders of Personal Pensions, however large or small, including pension drawdown and all privately held arrangements will benefit significantly.  Occupational Pensions such as Civil Service, NHS and other public and private sector final salary schemes can be transferred but sometimes the existing benefits are too valuable. If you are a holder of such a pension you need to talk to our expert personally who can advise the best course of action for your circumstances.

WHAT IF I DON´T WANT TO CASH IT IN?

In many cases, QROPS can provide many benefits over leaving the pension in the UK.  So whether you are 20 years old or beyond pensionable age and you have a UK pension fund, we suggest you review what and where it is held, in order to take advantage of the generous tax savings available via QROPS.

But don’t take any risks. Speak to us and we will give you a full explanation of  QROPS and carry out a FREE, NO OBLIGATION ASSESSMENT of your pension arrangement and to ascertain whether QROPS is right for you.”

So… if you think you may have an old UK pension fund lurking in the background or if you need more information on any aspect of QROPS, contact us and we will pass your details on to Terry