Have you been mis-sold a QROPS scheme pension? If so, our specialist team of experts can help you to formulate a claim for compensation.

Unsure whether you actually qualify for compensation? Then use our guide to check your eligibility. You will also find plenty of guidance covering the kind of problems other people have encountered. This should help you to decide whether you need our help to take matters further.

If you leave the UK and move abroad, you don’t automatically have to transfer your UK pension pot. So if you wish, you can opt to leave your existing UK pension arrangements in place while you draw down the benefits in your new country of residence. However, our guide principally concerns those who have chosen to take out a QROPS pension option.

What is a Qualifying Recognised Overseas Pension Scheme?

Introduced in 2006, a ‘qualifying recognised overseas pension scheme’, or ‘QROPS’ for short, is a type of overseas pension scheme which HMRC (HM Revenue & Customs) has agreed to recognise as eligible to receive transferred funds from UK registered pension schemes.

So this is a kind of pension arrangement outside the UK which acquires its funds from a UK-based pension fund. However, some strict rules apply: To achieve QROPS qualification, the scheme must be properly arranged to meet the requirements of UK tax law. This can include matters such as: being a scheme which is available to residents in the country in question, and scheme funds not being accessible prior to age 55, except in some very special circumstances.

HMRC maintain a list of pension providers who confirm they offer schemes which meet HMRC’s criteria for QROPS eligibility.

Who might take advantage of QROPS arrangements?

Those already living overseas, or planning to move abroad may opt for a QROPS pension for a number of reasons:

  • They may wish to transfer their pension to their ‘country of retirement’ to avoid the difficulty of receiving pension payments in pounds. To do so might involve expensive (fluctuating) currency exchange charges for any spending in the new country.
  • They may also prefer to meet their tax obligations in their country of retirement, which might be easier than keeping track of UK tax rules.
  • They may happen to work abroad and wish to take advantage of a QROPS scheme offered by their employer.

Taking financial advice

Transferring your pension to a QROPS arrangement should only be considered if you receive good financial advice. This is because making such a decision also means you may lose other benefits as a consequence. In addition, a QROPS transfer itself may leave you liable for certain tax charges.

A QROPS can often seem a very attractive pension arrangement. One of the major advantages a financial adviser will mention is the potential tax benefits: With a QROPS pension you can effectively avoid paying UK income tax and substitute an alternative, and usually lower, rate of tax charged in your new country of residence. Yet despite its appealing advantages, a QROPS pension can still be problematic.

Do you have a mis-sold QROPS?

In recent times, certain QROPS schemes have been closed down, either because they were found to be non-compliant with tax regulations, or because they were deliberately being used as a means of exploiting tax loopholes. So any scheme which has failed to abide by tax rules is essentially already unlawful. And with public and political opinion running very much against all tax avoidance initiatives, even those QROPS pensions presently acceptable to HMRC may not be safe for long.

Legislative adjustments could declare such schemes unlawful, and would then expose pension investors to certain penalties. For instance, if your QROPS arrangement is deemed not to comply with any new legislation, then fund transfers will count as ‘unauthorised’ and attract UK tax at a rate of 55%. Furthermore, any expensive commissions you pay to cover fund management costs will gain you no advantage. These are some of the consequences of a mis-sold QROPS.

Claiming QROPS Compensation

If you believe you purchased a mis sold pension from a financial services provider, and have thus incurred a financial loss, you may be eligible for compensation. The Financial Conduct Authority expects any financial adviser to offer consistent high-quality advice, so if any of the following apply, there may be a case to answer:

  • You were not informed that QROPS carries risks.
  • You believe your personal circumstances did not receive proper consideration.
  • You were pressured to consider high-risk investments.
  • You were advised it was essential to transfer your pension.
  • You were advised to transfer all of your pension pot into a QROPS arrangement.

If you want to proceed with a mis-sold QROPS claim, please contact our expert team who can investigate your claim further. We can help prepare, submit and manage an ongoing claim on your behalf with absolutely no upfront fees. The service we offer you will be on a strictly no-win, no-fee basis.