Managing your pension funds before transferring to a QROPS?

Category: Pension Transfer & QROPS

Plan your pension early.

When it comes to pensions transfers, a QROPS (Qualifying Overseas Pension Scheme) is sometimes the perfect option., However, this option is only available in the right circumstances. If you are looking to transfer your UK pensions to Australia (for example), you are not allowed to transfer pension funds into a QROPS in Australia until you reach the age of 55.

In circumstances where your UK pension funds are remaining in the UK, for the medium or long term, the question is asked “how should your pension be managed until then?”

If you do decide to transfer your pension funds into a QROPS later in life, it is worth noting that you have to have sufficient funds to make the transfer worthwhile. For those planning on transferring to a QROPS SMSF in Australia, bdhSterling advise that the pension funds should have a combined value of at least $350,000 AUD or £200,000 GBP (based on September 2017 exchange rates). Transferring with less than that amount may not be as cost effective – but worth taking expert advice on in any case.

Most pensions transfers to QROPS are subject to a 25% transfer tax (known as the Overseas Transfer Charge), except in a few cases. For example, the person may already be a resident in the country where the QROPS they want to transfer to is based – in which case the Overseas Transfer Charge would not apply (unless the member moved to a different country after the transfer took place).

UK Pensions Freedom can mean the freedom to get it seriously wrong

Choosing the wrong pension option could make a massive difference to how much you have at your disposal later, so it is best to get expert advice as soon as possible, whether you are entering a new arrangement for the first time or approaching retirement.

George Osborne’s UK Pensions Freedom, granted in April 2015, was designed to give people over the age of 55 more choice in what to do with their pension funds and it has brought greater flexibility. This freedom also brings greater complexity and the risks can be huge.

You may not have the option to transfer your UK pension. For example, you can’t transfer into a QROPS (or another UK pension scheme) if you have already purchased an annuity with all of your pension funds or if you are receiving benefits from a final salary scheme.

Be discerning – investigate opportunities fully

Since the UK Pensions Freedom initiative, many schemes have appeared from nowhere such as “pension liberation schemes” for the under 55s. However, you cannot draw funds from a pension until you are over the age of 55.

Take control of your pension choices. There is plenty of information available on websites to keep you updated on what you can and can’t do. Reputable firms like bdhSterling can advise on the pros and cons of schemes that comply with all the relevant rules and regulations – and they can help you choose the best type of scheme for you.

Where are your pension funds now?

By the time many of us get to 55 years old, we often have various pots of money kept in different places because of the different employment schemes we have been involved with. It may be wise to gather all your pension funds into one place and ensure that the larger, combined fund is being invested in the best way possible.

Opportunities for business owners and executives

There are some excellent pension planning opportunities available to you whether you are running your own business or are a company director or executive. The notable ones are Executive Pension Plans, Self-Invested Pension Plans (SIPPs) and Small Self-Administered Schemes (SSASs), which typically offer a more diverse range of investment opportunities than more standard pension schemes.

With a SIPPs or SSAS you can purchase a commercial property, such as your own business, or in some cases acquire a commercial loan, as well as plenty of other types of investments. bdhSterling offer excellent expert guidance on such matters.


For people who are considering a move to another country such as Australia or New Zealand, it is vital that you get expert migration advice on your finances. Pensions transfers are complicated, but bdhSterling can  compose independent financial reports, also known as exit reports, which include a pension transfer analysis and retirement strategies. Our reports will consider all of your UK pensions, other UK assets, inheritance tax, international annuity and pension drawdown strategies.

Exit reports can also provide research and guidance on the most tax-efficient strategies for all of your funds and assets.

Planning for the future

Depending on your age now, you have the potential to seize investment opportunities to enable your pension funds to really grow. Alternatively, without the correct advice, there is the potential to make significant mistakes that can prove costly.

Perhaps you have steered your finances up until now, but need the best possible advice on investing your UK pension fund, accessing your retirement benefits or transferring to a QROPS. Our expert consultants can guide you through the entire process and advise on what is the best opportunity for you.

Get in touch with an expert at bdhSterling today.