QROPS / SIPPS
What is QROPS?
A Qualifying Recognised Overseas Pension Scheme (QROPS) is a HMRC-recognised pension transfer scheme that is based in a jurisdiction outside the UK which maintains the same standards or equivalent as a UK pension.
If you are thinking of moving away from the UK but have a local pension, then those savings are easily transferable into a QROPS, provided that the overseas scheme of your choice is registered with HMRC and fully compliant with the standards of the jurisdiction it is domiciled in. The popularity of QROPS schemes has risen considerably following the introduction of new pension rules in 2006 by HMRC.
What is a SIPP?
A SIPP is a type of UK-government-recognised personal pension scheme which allows clients and their financial adviser to choose from a wide range of investments that are approved by HM Revenue & Customs ( HMRC). Therefore, a client can freely choose how their money is invested.
How does a SIPP work?
With the help of a financial adviser, a SIPP allows you to decide what type of investments to invest in depending on your risk appetite and timeframe until retirement.
Since regulations surrounding UK pensions changed in 2006, you can pay as much as 100% of your salary into the scheme each tax year, as long as it does not exceed £40,000 (2013/14). On the other hand, if you become retired or unemployed you can still continue to invest in your SIPP with a limit of £3,600 per year.