Most of the information you come across about QROPS tells you how lucrative they are. But to get a fully rounded picture of what life with a QROPS is like, you may want to know about the costs of getting one.
Provider fees
Given that there are over one thousand QROPS on the market, there is a huge variation in the level of fees that are charged.
When QROPS were first introduced, it’s fair to say that providers took advantage of the fact that investors were so grateful to escape paying UK income tax. The fees they charged were high. However, now that a QROPS investor has so many options, competition has driven down the costs of QROPS fees.
There are even some QROPS out there for only £500 per year. However, these are likely to be off-the-peg solutions. If you want a bespoke QROPS for your own individual circumstances, you may have to pay a little more for the work involved in designing and setting it up.
Advisers’ fees
Whatever your QROPS adviser charges you, you should be aware of their pricing structure from the start. Some advisers are paid an hourly rate by the person they are advising. Others are paid commission by QROPS providers whose schemes they sell.
If your QROPS adviser accepts commission rather than taking a fee from you, you may wish to accept whether the cost of that commission is built into the cost of the QROPS.
Tax
Finally, reducing your tax bill is probably why you want to get a QROPS in the first place. But once you have celebrated escaping the clutches of the UK taxman, you may want to make sure that the tax you are paying in your country of residence is what it should be.
Don’t forget that assets in your QROPS can sometimes be moved to another QROPS scheme, so if there is a budget that is unfavourable to your circumstances in your current QROPS location, you may be able to move it to a lower tax destination.
