QROPS changes forecast under new UK pensions minister

Added 12th May 2015

Experts across the Qualifying Recognised Overseas Pensions Scheme industry have welcomed the appointment of Ros Altmann as the United Kingdom’s new pensions minister, with many hoping she will introduce a sea change to the way expats are advised.

QROPS changes forecast under new UK pensions minister

Altmann, a pensions and retirement policy expert with directorial experience at Rothschild International Asset Management and NatWest, will take over from Liberal Democrat Steve Webb, who lost his cabinet position, and his seat as MP for Thornbury & Yate, in last week’s election, which saw the Conservative’s take a slender majority.

Her considerable experience in the pensions industry, which has seen her campaign for reforms to annuities and criticise the 2010 coalition changes to inflation protection on state pensions, has so far been welcomed by the QROPS industry, with many hoping she will lead a review into the quality of advice being given to expats.

Geraint Davies, managing director at Montfort International, said Altmann’s previous experience in the QROPS market will allow her to advance the regulation of advice around the products.

“Having discussed QROPS with Altmann in the past, I am sure that she will bring some incisive thinking that champions fair play for all the participants in international financial planning delivery,” he said. 

“I am looking forward to opening up discussions focussing on the quality of advice to both ex-UK residents with UK pensions and those currently in UK with UK pensions but destined to leave who might be pounced upon by an ill-trained QROPS salesman.”

"I am sure that she will bring some incisive thinking"

He added that she was unlikely to “let regulators get much sleep” as she reviews how advice is being delivered to those retiring with UK benefits.

“For too long, overseas advisers, regardless of whether they are based in Europe, Middle or Far East, Australasia or the Americas, have been allowed to deliver advice which we in the UK would not dare deliver.

“Altmann will be aware of how the QROPS message has been damaged by unsuitable advice, and I can see the £30,000 transfer value rule for final salary schemes getting some very close scrutiny.”

Acknowledged expert

Similarly, Stewart Davies, managing director at Momentum Pensions welcomed in Altmann’s appointment.

“Altmann is acknowledged as an expert in retirement policy and her appointment should be welcomed by the industry as it goes through this significant transitional phase in terms of freedom and flexibility in the UK and the ongoing review of the International QROPS market,” he said.

Paul Davies, co-founder of Global QROPS, also expressed hope that Altmann’s previous experience in pensions will allow her to advance the QROPS industry.

“For stability and moving policies forward it was important that there were outright winners to the election,” he said. “Ros Altmann was a sensible appointment as she has had experience in pensions, and in particular, fighting against injustices for the everyday pension member as well as understanding the needs for reforms, such as annuities.

“She will understand and identify some of the outstanding issues regarding QROPS, such as the 70% rule, and act on these and bring back some certainty.”

Davies’ comments refer to HMRC’s decision in March that the requirement for a non-EU QROPS to use 70% of its funds to provide an income for life was to remain “temporarily” after proposing its removal in December last year.

The move has since prevented the full-flexibility which had been expected for the schemes in line with the April’s UK pension reforms.

The revenue is yet to confirm when this requirement will be removed.

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QROPS - Ros Altman

Any change which will bring certainty is to be welcomed. I trust that Ros Altman will recognise that there are "bad" QROPS adviser across the industry [and that includes the UK] and that NOT tarring all advisers with the same brush would be welcomed. Opening and welcoming a dialogue from all working in the QROPS sector across the world would be a first positive step!

Posted by: Mike Cole, 16 May 2015

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