Transfer your NHS Pension before it’s too late

It is now official – from April 2015, it will be prohibited to transfer your UK pension to a QROPS scheme.

On Monday 21 July, the UK government formally announced that transfers from unfunded public service defined benefit schemes (such as the NHS scheme) will be banned from 5 April 2015. 

Can I transfer my NHS pension to a QROPS scheme now?

Yes, the good news for NHS pension scheme members, including those resident in India, is that it is still possible to transfer your NHS pension into a QROPS scheme in India, but time is of the essence.

What is the timeframe to transfer my NHS pension to a QROPS?

Currently, the NHS scheme is taking around two and a half months to process the transfer discharge papers and release the pension funds to the QROPS trustee.

Prior to this, the scheme member must obtain an up to date Cash Equivalent Transfer Value (“CETV”), which takes around 3 to 4 weeks.

After the member receives the CETV, it takes around 2 weeks to set up the QROPS scheme in Malta and send the completed paperwork across to the NHS pension scheme.

Therefore, for a member who wishes to transfer out of the NHS scheme, they must start the process 6 weeks before 5 April – by February 24 2015 at the very latest.

How can we help?

QROPS Adviser Group has extensive experience of transferring pensions out of the NHS pension scheme and into QROPS schemes, for both residents of India and other countries.

We can help ensure that your NHS pension is transferred across to a suitable QROPS scheme in good time before the April 5 deadline expires.

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How Can I Benefit from a QROPS?

Would you like early access to your pension?
If you have a public sector pension such as the NHS pension scheme, and have left the UK to work or retire in India, you will have to wait until you are 60 or even 65 before you can access your pension. Many people want their pension before then – and with a QROPS you can access your pension from the age of 50.

Avoid 55% UK inheritance tax. The UK government will take 55% of your pension when you pass away – leave more for your loved ones by transferring your pension into a QROPS scheme.

Would you like to take 30% of your pension tax free?
For returning NRIs and PIOs, a transfer into a QROPS can mean a higher tax free lump sum at retirement age.

Would you like to receive your pension free of tax?
A transfer of your UK pension into a QROPS scheme can enable Indian residents to receive their pension free of tax, both in the UK and in India.

Would you like to take 30% of your pension tax free?
For returning NRIs and PIOs, a transfer into a QROPS can mean a higher tax free lump sum at retirement age.

Would you like to avoid buying an annuity?
Pension rules in both the UK and India require pension holders to purchase an annuity with their pension fund. Transfer your pension into a QROPS and have more say over your pension.



HDFC Life QROPS Schemes banned by HMRC: what now for Indian QROPS?

QROPS Adviser Group have been advising clients all over the world since the inception of the QROPS regime in 2006 in relation to their UK pension.

Throughout this time we have long advised clients against transferring their UK pension into a local Indian QROPS scheme – in our view, there are much better alternatives which provide all of the benefits, but without the risks. The ability to access their pension as early as the age of 35 or 40 was clearly not intended by the UK government when they established the QROPS regime.  And the risks of transferring your pension to a banned QROPS are significant – the HMRC can levy a 55% tax charge against the value of the transferred funds.

It was therefore only a matter of time before Indian schemes came under the scrutiny of the HMRC. The cull began in July, when HMRC banned 15 of the 27 local Indian QROPS schemes on the official list.  On October 17 2014, the biggest player in the local Indian QROPS market, HDFC Life had all of its QROPS schemes de-listed by the HMRC.

The de-listing of the HDFC Life schemes by HMRC clearly signals the death of local Indian QROPS schemes. It is now surely just a matter of time before the remaining Indian schemes, especially the so called immediate annuity plans, are also axed from the list.

Malta QROPS – all of the benefits of an Indian QROPS, none of the risks

QROPS Adviser Group advises Indian residents, or people who intend to retire in India, to transfer their UK pension to an overseas scheme based in Malta.

Having a QROPS in Malta means that you can benefit from a highly regulated jurisdiction with a flexible, but recognised, pension structure.  Every pension scheme in Malta has to be independently regulated by the Malta Financial Services Authority (MFSA), giving the island very high levels of security and confidentiality.

While other QROPS jurisdictions established schemes then had to answer questions from HMRC, Malta chose to engage HMRC from the outset and design a scheme which fitted the requirements exactly. This gives us the confidence in recommending a Malta QROPS as one of the most robust schemes currently available.

Moreover, the Double Taxation Agreement signed between India and Malta in February 2014 ensures that all pension income drawn down from the QROPS pension is received in India tax free, without any withholding tax applied in Malta.

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Professional and Independent QROPS Advice for Indian residents
Independent and Professional Advice

A QROPS is much more than just a pension, but a big part of your accumulated wealth. Getting the right advice can mean a much more comfortable retirement. We can help ensure that you make the right decision about your UK pension.

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QROPS for Indian residents
Leave a Legacy for Future Generations

Once of the most valuable benefits of a QROPS scheme for Indian residents is the ability to pass on your pension fund to your loved ones after you have passed away, and avoid paying UK inheritance tax.

Read more…

NHS Pension Transfers to India
NHS Pension Transfers

If you have worked for the NHS and have retired or left the UK to live in India, then you may have built up valuable pension benefits. We can advise you on the best course of action to take in order to fully maximise your NHS pension.

Read more…