Once you have decided to get a QROPS, it may be tempting to pick one of the first few that you come across. But what should you be looking for, and what are the criteria you might use to distinguish a good QROPS from one that is not so good?
Fees
Like any pension product, QROPS providers charge fees. But you might be so caught up in the tax advantages that the scheme offers to work out how much the arrangement may cost you.
Pension schemes may charge fees for setting up costs, transferring assets in and out and annual management fees, so what constitutes a cheap deal for someone who puts their assets in and leaves them there may not be such a great deal for an investor who is always shifting their pension around.
When QROPS were first introduced, providers took advantage of their clients’ joy at being able to avoid paying UK tax legally and imposed high fees. However, now that there are more than 1,000 QROPS available, providers have upped their game and lowered their fees.
Choice
Sometimes when you are choosing a financial product it feels that there is actually very little choice between providers. Everyone seems to offer the same thing, but on marketing materials in different colours with different logos.
With QROPS on the other hand you can actually choose the pensions regime you want to invest in. Wide variation of underlying assets and tax neutral system? Try Guernsey. Early access to lump sums? Try New Zealand. But in addition to the choice of regulatory systems that is available, you may also have access to a range of providers that you would not otherwise have considered in offshore investment destinations.
Access
If you are retiring abroad, you may have everything planned in great detail. Does this include details of when you want to get hold of your money? When you decide on which QROPS to get, check that it will permit you to access your money when you want it.
