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Making use of QROPS (Qualifying Overseas Pension Schemes) or SIPPS (Self Invested Personal Pensions) to allow for the consolidation, and subsequent management, of UK pensions to personal pension structures is becoming increasingly popular by those who have built up UK pensions and are now living away from the UK.
It could allow you to consolidate all of your current pensions into a single pension structure as well as providing access to a wider choice of investments, in different currencies, as well as allowing you to pass all of your pension pot to your beneficiaries without your beneficiaries being taxed at their own marginal rate if you die after the age of 75. So, even if your pension does allow for a lump sum death benefit, your beneficiaries could be taxed up to their highest marginal income tax rate on any lump sum payment.
QROPS can also help you gain more tax free cash at the start of taking pension income. By consolidating to a QROPS you can potentially take a lump sum up to 30 percent of the value of your pension rights – five percent more than if you were to keep your pensions in the UK.
With decreasing gilt yields, in recent years, if you’re working with a large multinational you may be surprised to learn that your transfer value is high in relation to the pension that you will forgo. Therefore, you’ll still maintain the real value of your pension pot but, as mentioned above, could gain the advantages that come with making use of a QROPS or SIPP structure most notably being able to leave much more of your pension to your family.