QROPS and the new flexible drawdown

The Coalition Government has now proposed the introduction of a new form of flexible drawdown, for pensioners who can demonstrate that they retain a secure pensions income of £20,000 p.a.  This flexibility will permit the drawing of unrestricted additional pensions, varying from year to year- provided that the secure pensions income remains intact.

Some individuals have commented that this new facility destroys the need for Qualifying Recognised Overseas Pension Schemes (QROPS), for pension scheme members who move overseas.

In our view these comments are  misplaced and tendentious.   A QROPS is not an automatic solution for those with UK based pensions – but it is a pensions vehicle that should be considered.  Retaining UK interests may not be sensible for those who move abroad permanently. A QROPS may be able to incorporate the new flexible drawdown facility.

The need for a QROPS is determined by the new set of circumstances governing the overseas resident – including particular requirements of their country of residence, age attained, taxation issues arising there and in the UK, etc.  Determining whether a QROPS – and which QROPS – is appropriate will depend on these factors and the interplay between the UK, the jurisdiction in which the individual is resident and any the also the territory in which a potential QROPS Is located.

We have developed significant experience in advising clients based in a considerable range of territories on optimum planning for their UK pension savings.