Speaking to International Adviser, Paul Davies, director of the firm (formerly Global QROPS), which specialises in providing advice to British expats emigrating to Australia, said it was “getting calls all the time” about the products used for overseas pension transfers.
HMRC Rops removal
This is despite the HM Revenue & Customs (HMRC) removing all Australian schemes – around 1,600 – from its approved Rops list in July last year, after they failed to meet the conditions of the ‘pensions age test’, which states that benefits can only be paid out of a scheme before age 55 in cases of “serious ill health”.
Up until September 2015, just 1 public sector pension scheme appeared on the list, after which self-managed superannuation funds – similar to the UK’s self-invested personal pension schemes (Sipps) – began to be approved under the proviso that expats had by aged 55 and over to use the transfer products.
Demand sustained
However, Davies insisted that even the HMRC removals failed to put a dent in the demand for Rops, denying claims made by IA earlier this week that bdhSterling had changed its name in a bid to distance itself from the antiquated schemes.
“I don’t think it is the death of Rops and certainly not in Australia.
“I don’t think it is the death of Rops and certainly not in Australia. The key reason we have rebranded and joined up with the Australia entity is that we’ve had so much traction that over the last 18 months we’ve had to open three new offices in Australia and one in New Zealand,” he said.
He explained that for many British expats living in Australia Rops are still the most tax efficient way to access a pension despite the UK pension freedoms being introduced last year which some providers admitted has made it harder to sell the solutions.
Rops in Europe
Surprisingly, he agreed that demand for Rops in some parts of Europe may have tailed of post-pension freedom, saying that it was “hard to better the accumulation stage” of UK pension now.
“There might be some areas and some parts of the world where they may not be such demand for Rops as there was.
“In the past, the flexibility of transferring your pension to a Rops – where you could get benefits when you’d been outside UK for five tax years – was much more appealing than leaving it in the UK which until the pension freedoms last year meant pensions had no flexibility.
“Since the freedoms if you have full flexibility in the UK, that’s hard to match with a Rops. However, it still comes down to taxation,” said Davies.
