Most have to make quick arrangements to cover healthcare, banking and savings so they can manage their money and deal with any medical emergencies in the short term.

For most, financial planning stops there while they get on with the business of living or working in a new country.

Expats, like most people, live for the day rather than making plans for the years ahead.

Some time considering retirement and pension options is essential.

Leaving one or more pensions in the UK is not good financial planning for retirement and breaks several financial planning rules by leaving a hugely important asset at under the control of third parties: -

• The pensions are for the most part in the control of employers who cannot guarantee to pay benefits many years down the line and who are underfunding their schemes
• The benefits are paid in Sterling and spending power is reduced by exchange rate fluctuation
• Tax planning opportunities are eroded because most UK pension reliefs are only available to UK residents
• Pension investors have to buy an annuity or alternative secured pension, and in most cases, their pension dies with them however much is left in the fund

That’s where a QROPS pension comes in. Forget the initials, which stand for Qualifying Recognised Overseas Pension Scheme, because a QROPS is just a retirement scheme for people with UK pension rights who no longer live in the country.

The rules for managing and investing with a QROPS are set out by HM Revenue and Customs, who supervise the hundreds of schemes available in 48 countries worldwide.

A QROPS pension eliminates the problems of taking a UK pension overseas.

With a QROPS transfer, an investor suddenly has a retirement strategy that offers:

• Fund control - either by transferring to a self managed QROPS or a managed fund
• Financial control - benefits are paid without deducting tax in any major currency
• Flexible tax and investment options
• No annuity or ASP - Remaining QROPS funds can be passed on to family or loved ones, often without the worry of inheritance tax, when the pension holder dies.

Transferring a pension to a QROPS scheme is straightforward, but individuals need the help of an independent financial adviser as QROPS providers do not deal directly with investors.

QROPS Adviser is the leading QROPS advisory and can help with switching pensions from the UK to any international scheme.

The government is proposing tax relief on pension contributions should be withdrawn for high earners from April 2011.

Meanwhile, anti-avoidance measures to stop anyone earning £130,000 or more a year take advantage of the changes.

The current rules allow pension investors to make contributions at the same levels as before without paying any additional tax.

Pension providers have felt the rules were unclear when a pension investor switched their pension to another fund. Some interpreted the guidance as stating the transfer value could include accrued pension relief on contributions while others were not sure.

The new rules come in to force on March 19 and apply retrospectively to April 22, 2009.

They allow anyone leaving one pension scheme and joining another within three months, subject to meeting some technical conditions, to keep any relief on the contributions in their fund.

Pension firms welcomed the clarification of this point, which they describe as small but important.

One of the issues they feared was that transfers to a QROPS could leave pension providers open to penalties if the rules were misinterpreted.

Many high net worth individuals are looking at switching their pension funds from the UK to a QROPS pension to avoid restrictions on pension investments.

QROPS are seen by many as a much more flexible investment and tax option than a UK pension, providing the investor meets all the conditions for opening a QROPS scheme.

The plea by pension providers to HM Revenue and Customs for clarification about anti-avoidance rules shows how complicated pension transfers can be.

QROPS Adviser is a leading financial firm that handles hundreds of transfers from UK pension funds to QROPS pensions a month.

The company has a back-office of highly skilled cross-border tax and pension technicians who are conversant with QROPS rules in many jurisdictions worldwide.

Taking advice from a firm like QROPS Adviser is crucial to a successful transfer because QROPS providers will only allow a transfer if an independent financial adviser has recommended the investment

QROPS pensions can eliminate this problem for expat couples - even if they are not married.

Half of all married men buy a single life annuity at retirement that could leave their wives without any private pension income, according to a survey by YouGov for Standard Life.

Women are likely to live at least nine years longer than their husbands in retirement, says the Office of National Statistics, but the Standard Life survey revealed just over one-in-three women plan for funding long-term retirement in comparison to half of men.

The survey also disclosed women are less likely to have a personal pension.

Married couples are discouraged from buying joint life annuities because the rates of return are generally less than a single life plan.

Expat married couples have an option that can resolve issues of a poor paying annuity and the husband’s pension fund dying with him leaving the wife at risk of a much-reduced retirement income.

QROPS pensions offer expats enhanced benefits

Transferring a UK pension fund to a QROPS pension wipes out both problems at a stroke.

An offshore QROPS pension removes the pension saver’s obligation to buy an annuity and allows any remaining fund to pass to family and loved ones on the pension holder’s death.

These are just two of the enhanced benefits a QROPS pension offers expats retiring permanently outside the UK.

QROPS Adviser can explain offshore pension options to expats. 

Contact one of our independent, professional consultants for a pension review that will show you how a QROPS pension can boost your retirement income.

QROPS Adviser is a long-established firm with a successful background in completing QROPS transfers for hundreds of clients worldwide.

As a financial firm of international standing, QROPS Adviser consultants can help with selecting the right QROPS pension on the HMRC QROPS list that is best suited to your financial circumstances.

QROPS pensions are available to expats leaving the UK for most countries - including the popular retirement destinations of France, Spain, Portugal and Italy.

RSM Tenon Financial Services Limited was found to have broken FSA rules between November 2007 and August 2008 relating to advice about Lehman Brothers structured investment products.

The FSA also criticised the firm for failing to put effective risk management structures in place to stop unsuitable sales by advisers dealing with pension switching.

As a result of the FSA ruling Tenon will conduct two reviews supervised by the FSA and an independent watchdog:

• A check of pension switching business between April 6, 2006 and December 1, 2009, to assess the suitability of recommendations made to customers, and if necessary, the firm will implement a customer redress programme.
• A review of all Lehman-backed structure products sales between November 1, 2007 and December 1, 2009, and instruct a skilled person to review its current sales and compliance processes relating to the sale of all investment products, assessing their appropriateness and the suitability of recommendations made to customer.

According to the firm’s web site RSM Tenon is regarded as one of the most progressive and entrepreneurial professional services firms in the UK.

Tenon is the UK’s seventh largest accounting firm with a fee income of £250 million, employing nearly 3,000 people in over 50 offices across the UK.

RSM International is the sixth largest global accounting network with over 730 offices in more than 70 countries, and employing more than 30,000 people worldwide.

Announcing the action against Tenon, the FSA said that financial firms must give compliant advice to clients and that the FSA would step in and enforce consumer rights where appropriate.

Although QROPS transfers were not mentioned by the FSA, the notable date for the start of the pension review is A-Day for pensions, when HM Revenue and Customs first established QROPS.

About 66% of private sector employees do not put money in to a company pension, according to the latest research for 2009 from the Office of National Statistics.

This contrasts with 80% of workers in the public sector.

This is no real surprise as another big company hits the headlines with pension problems. This time, it’s the turn of doctor and dentist reception favourite Reader’s Digest. The company has entered administration with a £125 million pension deficit - and about 1,000 pensioners are worrying about whether the company will continue funding their payments.

The basic thread running through pension news is that anyone saving in to a company pension cannot ever have 100% certainty that the pension will pay out in full.

No matter how good the defined benefits, how reliable the employer may seem or how much money is laid away, there’s no guarantee that the investor will see their hard earned cash during their retirement.

If the investor retires to the UK, they are really at the mercy of the employer and their integrity about funding the scheme.

Expats have options. They can leave their pension arrangements as they are and take the calculated risk that the pension will continue to pay or they can transfer the fund in to an offshore pension called a QROPS.

Without delving too deep in to the jargon, a QROPS pension is an arrangement for an offshore provider to look after retirement investments under special rules laid down by HM Revenue and Customs.

The benefit of a QROPS is the investor rather than a company or employer controls any retirement fund. In many cases, a company scheme may pay better benefits than a QROPS - but that’s only if the company paying them is still around and willing and able to make the payments when they are due.

QROPS Adviser has a reputation as the leading QROPS experts with a proven record of successful QROPS pension transfers.

The firm will benchmark current pension performance and future benefits for comparison against a QROPS and give independent, reliable and unbiased recommendations on whether to transfer.

A discussion document is expected in the summer, following an announcement that the EC is wants to assess whether pensions are safeguarded enough as strains are put on the system by a growing number of retirees and the banking crisis.

The review will start with a green paper from the EC’s employment and social affairs directorate, according to an announcement from the body.

The EC wants responses to proposals to update the European pension framework to ensure adequate and sustainable pensions are delivered.

The EC spokesman did not mention whether the consultation will have any impact on QROPS schemes, but they are bound to play a part as 18 of the 30 European Union nations provide QROPS pensions with another five closely tied jurisdictions like the Guernsey, Iceland and The Isle of Man in the market as well.

Other continuing EC social and economic policy reviews are also likely to be considered as part of the consultation.

Any changes to the pensions framework that fundamentally alter QROPS affect British expats and international workers who have returned home from the UK after building up pension rights.

Many of the 3,500 or so QROPS pension transfers a year go to expats living in the favourite destinations of France, Spain, Cyprus and Portugal - but although the expats live in these countries, they are more likely to base their QROPS in tax friendly jurisdictions outside the EU.

Although QROPS pensions are an important financial tool for British expats that hold about £0.5 billion in funds, they are not a big factor in the billions tied up in pension funds across Europe.

The results of the EC pension consultation are not likely to be known until at least summer 2011.

Meanwhile, QROPS Adviser has the latest up-to-date QROPS pension information for anyone seeking a pension transfer out of the UK. Qualified tax and financial advisers can help with transfer to any of the 48 worldwide jurisdictions on the QROPS list.

The quirkiness of tax law means that no rules actually spelt what is tax avoidance - which is legal - and tax evasion - which is not legal.

The problem comes when taxpayers and their entourage of accountants and advisers try and manipulate the grey area between avoidance and evasion.

QROPS pensions and their tax benefits for investors are perfectly legal while a provider meets HM Revenue and Customs regulations.

QROPS pensions have three main areas of conflict with the taxman:

QROPS tax free lump sums

The rules say at least 70% of the pension must be retained to pay pension benefits to the QROPS investor after retirement. Reversing the figure gives the 30% tax-free lump sum paid, for instance, by Isle of Man QROPS.

Most QROPS schemes pay a 25% tax-free lump sum on retirement, although some offer more if the investor meets certain conditions.

Investments that can be put in a QROPS

Most QROPS have wide-ranging self managed and managed investment options that offer opportunities to put money in currencies, commodities and assets they are unavailable to a UK pension holder.

HMRC does not encourage a QROPS pension investing in assets directly or indirectly giving a benefit to the pension holder, and sometimes this can cause conflict with the taxman.

Country of residence for QROPS pension holder

QROPS are designed for expats and international workers who have left the UK permanently to live or retire. Failing to break all ties with the UK when moving abroad can lead to problems with HMRC.

Setting up a QROPS pension is not as straightforward as starting a UK pension.

That’s why QROPS Adviser has highly qualified consultants and administrators who are fully conversant with the intricacies of starting a QROPS in many different countries where pension laws and tax rules may mean someone inadvertently flouts regulations.

Scrolling through the thousands of web sites, blogs and downloads available about QROPS pensions, it’s plain to see that much is misinformation from interested parties.

On one side, an endless list of UK pension providers and investment advisers speak against QROPS because many have a vested interests - they can see that as expats become more financially savvy, business is moving out of the UK to QROPS schemes and at the same time investment and life business is going with it.

On the other, lots of dubious QROPS ‘advice’ is offered by rogue firms who claim to have QROPS solutions that make promises that they can’t deliver - at an often over-inflated price to the investor.

With this in mind, anyone looking for a QROPS pension transfer should consider a few key points:

Quality advice

Select a financial firm with a strong record of successful QROPS transfers, like QROPS Adviser. We handle hundreds of cases a month.

Look for a strictly regulated firm

Don’t go with fly-by-night advisers who have no regulation, look for a firm like QROPS Adviser that has a professional administration centre and qualified consultants who can give expert financial and tax advice

Make sure the firm keeps in touch

Good customer service is important so clients can tabs on their QROPS set up and transfer of funds. QROPS Adviser has a secure online tracker that logs every development so clients are updated online or via their mobile phone

Confirm the firm’s experience

With almost 1,500 QROPS products available in 40 countries, any financial firm needs to have the resources to give timely and accurate cross-border tax advice. Clients also need to know the recommended products suit their financial needs and only providers on HM Revenue and Customs QROPS list are put forward for consideration.

Fair and transparent fees and costs

Some stories about extortionate fees charged by rogue advisers are shocking. Any financial firm should give a straightforward breakdown of any fees and costs associated with a QROPS transfer otherwise clients cannot make informed decisions about their retirement planning. QROPS Adviser has a policy of keeping clients informed every step of the way about the negatives as well as the positives of any QROPS transfer.

You don’t have to choose QROPS Adviser to deal with your QROPS pension transfer, but if you don’t, you owe it to yourself to make sure the standards of advice and customer service are not compromised by someone offering a deal that sounds too good to be true.

Trust us on this - if the “deal” or “offer”  is out there, we’d have it or something better and if we don’t then it probably is too good to be true.

A QROPs, is a Qualifying Recognised Overseas Pension Scheme, which is a pension designed for to make managing and accessing a pension easier for expats and international workers with UK pension rights.

The choice of schemes is huge - with almost 1,500 QROPS schemes across 40 countries on the HM Revenue and Customs list.

Because QROPS pensions do not have to be opened in the same place where the investor lives, a number of financial centres with British ties are popular like the Isle of Man, Guernsey and New Zealand. New schemes are set to open in Malta and Gibraltar.

QROPS pension transfers give pension benefits to investors from day one, including:

• Flexible investment options in major currencies, commodities, funds and markets that are unavailable to a UK pension investor. QROPS can also be self-managed like a SIPP or SaSS.
• Pension benefits paid gross in a currency of choice, that lets the investor live in a low income tax country with pension payments hedged against currency exchange rate fluctuation.
• No need to buy an annuity or alternatively secured pension (ASP) that lets the investor pass their pension savings on to family and loved ones instead of handing their wealth to an annuity firm on their death

Just like a pension transfer in the UK, switching funds from an onshore pension to a QROPS may not suit everyone.

This is not a problem with a QROPS scheme but simply a financial decision because the transfer value calculated by the transferring pension provider and the costs involved in the switch may mean the fund will perform no better than where it is now.

Any adviser will also need to check that any pension transfer does not reduce or eliminate any enhanced retirement benefits.

QROPS Adviser handles hundreds of QROPS transfers every month and has a first class international reputation as a financial firm with a track record of completing successful switches from UK pensions to QROPS.

With a network of professional consultants, QROPS Adviser can put together the right QROPS package to suit individual financial circumstances.

To find out more about how a QROPS pension can boost your pension contact QROPS Adviser

A QROPS - a Qualifying Recognised Overseas Pension Scheme - is an offshore shelter designed to help expats take their pensions with them when they move abroad.

The schemes have tax advantages and other benefits that are not available to UK residents.

High net worth individuals are investigating how a QROPS could help them in the wake of the recent Robert Gaines-Cooper tax case in London.  The entrepreneur and multimillionaire was ordered to pay £30 million in tax after the court declared he was still a UK resident despite claiming he had lived in the Seychelles for many years.

The decision was based on evidence from HM Revenue and Customs that he had not broken all personal ties with the UK despite spending less than 91 days a year here because he still had a home in Oxfordshire.

QROPS pensions have several possible advantages:

• If a QROPS provider agrees, UK pension funds and assets can be transferred in to the offshore scheme before an individual leaves the country, according to the government’s pension advisery service.
• Some QROPS providers in certain countries allow more than a 25% tax-free cash lump sum drawdown on retirement
• Guernsey QROPS allow scheme members to take out large loans against a QROPS pension

The same rules about non-residency apply to QROPS as individuals - at some stage the scheme member has to cut all personal ties with the UK, like disposing of any home or other residential property.

QROPS pensions are not only for the extremely wealthy. All the benefits apply to any expat transferring UK pension funds in to the offshore scheme.

The tax issues can be tricky, as pension advisers have to consider rules in the UK, the country where the QROPS is established and the country where the scheme holder lives and how they interact with each other.

QROPS Adviser is a financial firm with a good reputation for successful QROPS transfers. One of their specialist consultants can help expats and international workers with UK pension rights find the right QROPS pension that suits their circumstances.

The firm handles hundreds of QROPS transfer each month and has a team of tax and investment specialists on hand to deal with any individual with complex financial affairs.

For anyone with an Isle of Man QROPS pension, this double whammy means income tax on payments out of a QROPS fund rise from 18% to 20%.

For Isle of Man non-residents with a pension based on the island, the £2,120 tax-free personal allowance is scrapped from April 6, 2010.

The measures were included in a moneysaving budget Treasury Minister Allan Bell blamed on the continuing effects of the world financial crisis and a decision by the UK Treasury to reduce the amount paid to the island from a ‘common purse’ tax take from VAT.

Although the QROPS pension tax changes will not cause undue hardship for many wealthier investors, the island’s pension providers may find problems in attracting new business at the rate they have over recent years.

The Isle of Man is one of the popular destinations for expats to transfer offshore pension funds to a QROPS scheme, but the tax changes make the island’s QROPS less attractive than those in other tax jurisdictions.

Other QROPS pensions may be better than the Isle of Man

Nevertheless, some of these rival QROPS jurisdictions have yet to set their 2010-11 budget.

Attractions of the Isle of Man QROPS to British expats included close ties between the UK and the island, a common language, stable government and a flourishing economy.

Other QROPS providers offering these advantages plus QROPS schemes without the new tax disadvantages include Guernsey and QROPS list new arrivals Gibraltar, where the first QROPS is due to launch in April 2010.

QROPS Adviser suggests that if you already have an Isle of Man QROPS or were intending to transfer funds to a new scheme from a UK pension, then consider the alternatives.

Several years experience successfully transferring hundreds of QROPS to tax jurisdictions all over the world have shown us that the market is in a state of flux during March and April due to budget announcements.

QROPS Adviser has researchers and tax advisers keeping an eye on QROPS pension changes as they happen, so you can always rely on the latest financial advice that ensures your QROPS transfer is to the best provider you can get.

The firm expects to start accepting pension transfers from the UK in April.

“It appears that common sense has prevailed, and we are pleased to see that this issue appears to have been resolved,” said London & Colonial product development manager Adam Wrench.

Although HM Revenue and Customs nor Gibraltar authorities have confirmed the row is over, Wrench indicated “reliable market sources” say a settlement has been thrashed out.

Wrench said his firm is just waiting for the official announcement to open the doors to client pension transfers.

This announcement will involve a law change in Gibraltar scrapping a 0% tax rate for anyone over 60, to bring Gibraltar pension rules in line with those required by HMRC to initiate QROPS transfers.

QROPS Adviser revealed agreement was close in January 2010.

Gibraltar already has QROPS status but self-imposed a ban on taking pension transfer last year pending discussions to ensure the country’s pension rules lined up with HMRC regulations.

HMRC wrote to the Gibraltar pension trustees in September asking for clarification on pension rules, inferring they did not meet QROPS status qualification.

Both sides disagreed over the 0% tax rate, but Gibraltar backed down to avoid losing QROPS status.

“After a lot of frustration last year, with the inevitable missed business opportunities, it would appear we have some good news at last,” said Wrench.

Gibraltar is expected to attract a high level of QROPS business due to close historical ties with the UK, English as a first language and a reputation as a stable and trustworthy offshore financial centre.

QROPS Adviser will have access to the London & Colonial scheme when it opens, along with 1,400 or so other QROPS pensions worldwide.  Formal details of the Gibraltar QROPS have not been revealed, but are expected soon to allow transfer preparations to start.

The providers feel phoney advisers are making fees and commissions from QROPS pension transfers that leave investors facing up to 55% tax charges on the total fund because the switch beaches QROPS rules.

They are also concerned that Guernsey providers are losing out because funds are transferred in, then moved to another offshore destination in an effort to cash in more than 25% of the QROPS fund without paying tax.

Rogue advisers missell QROPS, say providers

To stop the rogue advisers, the pension providers have asked the Guernsey government to update pension laws.

In 2008, after action by HM Revenue and Customs, onward QROPS transfers from Guernsey can only go to QROPS providers who limit their tax free cash draw down to 25% of the fund.

Now, they want new rules that change this cash limit to £30,000 and that increase the requirements to starting a new QROPS for 25% to 30% of the fund.

QROPS investors should be cautious of some offers

Investors should be cautious of any scheme offering to transfer small sums - for example, a fund of £30,000 as opposed to £300,000 - and those offering to sanction any transfers from defined benefit schemes.

With allegations of exorbitant fees and commissions and QROPS misselling by unregulated advisers, it makes sense for anyone considering a QROPS transfer to go through a financial firm like QROPS Adviser.

QROPS Adviser has a proven record of successful QROPS transfers and handles hundreds of applications a month worldwide - including many to Guernsey.

With 388,000 Brits leaving the country last year, pensioners are a significant number of expat communities.

Once settled abroad, the next big decision is about pensions, investments and savings, as leaving the UK opens up a wide range of options, like a QROPS offshore pension that can make a huge difference to pension spending power and standards of living.

Taking a pension in to tax exile is not as expensive as everyone thinks. A QROPS is not right for everyone, but in general terms anyone with a pension fund of £100,000 should profit from a QROPS transfer.

With a smaller fund, some transfer might not be financially viable because the returns might struggle to match transfer costs.

How does a QROPS work?

A QROPS pension - or Qualifying Recognised Overseas Pension Scheme - is a trust-based investment wrapper available to anyone with UK pension rights. The intention is to let expats take their UK pension funds with them when they leave this country.

Advantages of a QROPS

QROPS pensions give much more flexibility to investing than a UK pension.

Restrictions on investing in UK based funds and markets in Sterling are lifted. Self managed or managed packages that let pension scheme members put their money in to commodities, funds or markets in most major currencies are the norm.

QROPS pension members have no obligation to buy an annuity or alternatively secured pension, which allows the pension holder to pass the fund on at death rather than lose the money to the annuity firm.

QROPS still pay a 25% tax free lump sum, although in some cases they may be more. Some Isle of Man providers allow a 30% draw down and some New Zealand schemes may allow more, depending on personal financial circumstances.

QROPS pension benefits also pack a spending punch because they are paid gross in the currency the pension holder chooses. This reduces the impact of exchange rate fluctuations and means the pension holder pays income tax, if any, according to the rules of the country where they live rather than the UK.

Disadvantages of a QROPS

Most of the disadvantages come from advisers or pension holders trying to manipulate QROPS rules to their favour.

Providing QROPS advice comes from a reputable, strictly regulated with a track record of completing QROPS transfer, like QROPS Adviser, switching to an offshore pension should not cause any problems.

Retirement planning is almost impossible in the UK with so many firms facing pension deficits, inevitable interest rate and tax rises.

For those lucky enough to have the option, a QROPS removes a lot of these problems.

A QROPS - which stands for qualifying recognised overseas pension scheme - is a special pension for anyone living outside the UK who has built up UK pension rights.

For the right investor, QROPS offshore pensions have five major benefits over a UK-based pension:

Stability

A QROPS is a safe haven for pension funds with a choice of about 40 different countries offering regulated schemes including the Isle of Man, Jersey and Guernsey. New arrivals on the QROPS scene include Gibraltar and Malta.

Flexibility

QROPS investments are available in currencies, markets and commodities closed to most UK pension investors.

Tax savings

QROPS pension benefits are paid without tax deducted and any income tax depends on the country where the investor lives - which does not have to be the same as where the QROPS is taken out.

Retirement benefits

Unlike a UK pension, QROPS savers have no obligation to buy a poor performing annuity or alternatively secured pension (ASP) with their fund.

Spending power

Most QROPS providers allow benefit payments in any major currency, which means fewer problems with exchange rate fluctuations and bank charges.

Anyone who wants to consolidate UK pension funds with a QROPS transfer has to go through an independent financial adviser, because QROPS providers insist clients are recommended to a scheme that fits their personal financial profile.

QROPS Adviser is a leading financial firm with many years experience helping expats with pension solutions. The firm has a successful track record of helping with hundreds of QROPS transfers every month.

Pension savers can also have confidence that while working with QROPS Adviser, they will deal with regulated, independent and unbiased advisers who will tailor a bespoke QROPS solution to meet their individual financial circumstances.

One of the big advantages of working with QROPS Adviser is the firm will place a client with the right QROPS provider to suit them out of the 1,400 or so schemes available worldwide.

The UAE was given an Aa2 rating with a stable outlook despite billions of pounds of pent up toxic debts, mainly concentrated in Dubai residential and commercial developments.

The UAE consists of seven states: Abu Dhabi, Dubai, Sharjah, Ajman, Umm al-Quwain, Ras al Khaimah and Fujairah. Abu Dhabi is the capital.

Abu Dhabi oil and gas reserves shore up weaker emirates

Moody’s annual report on Abu Dhabi states the agency stands fully behind the government and considers the UAE to have a high economic strength based on Abu Dhabi’s extensive oil and gas reserves and overseas financial holding.

Oil reserves alone are estimated at 140 billion barrels.

Moody’s also considers the risk of domestic political upheaval low given the country’s long history of internal stability; the volatile regional political environment is of some concern.

Moody’s calls for more fiscal transparency for offshore investors

The main criticism of the UAE economy was the low level of transparency for outside investors looking at financial and business data held by government owned companies.

“Moody’s assesses the UAE’s government financial strength as similar to highly developed economies like Sweden, Australia, or Germany,” said the report.

With low debt, political stability and a strong economic balance sheet, Moody’s feels the UAE present good opportunities for investors that can only improve if the government moves to make financial affairs more open to outsiders.

This would include more details of government assets and creditors plus more public information about internal financial affairs of the emirates. Currently, it would appear the UAE is economically powered by Abu Dhabi - especially as the government has bailed out the Dubai property market fiasco with a $10 billion loan.

Fiscal transparency would allow investors to make informed decisions and avoid future problems like the plummet in Dubai property prices.

Michael Foot, a former Financial Services Authority director, submitted his report that looked at how finance is regulated in the Isle of Man, Channel Islands and British Virgin Islands last year.

Now, he is accused of ignoring alleged regulatory breaches by online QROPS advisory firms in Spain and Asia that have transferred pensions in to QROPS and have ‘hidden’ commission fees of up to 30% of the fund value.

Foot says the scope of his inquiry did not include looking at alleged malpractice.

His critics say they passed him written details of alleged failings by QROPS financial firms and he ignored lack of compliance and the bypassing of rules designed to protect clients.

Others say a lot of misselling evidence is anecdotal.

QROPS Adviser is a financial firm that has successfully managed thousands of QROPS transfers around the world

Dealing with a non-regulated firm does not give QROPS pension transfer clients the same protection.

The important point for QROPS clients to consider is the QROPS provider may well be regulated in the country where the scheme is based, but the financial adviser is an agent of the client not the provider, and the provider’s regulatory protection does not extend to the adviser.

Currently, QROPS Adviser has a special transfers team working on more than a 1,000 transfers from the Singapore QROPS scheme, which was delisted by HM Revenue and Customs in May 2008.

The jurisdiction remains delisted but HMRC refuses to comment about why the action was taken. A trustee have announced they intend to take HMRC to the High Court in London in a bid to regain their listing.

How much tax someone pays HM Revenue and Customs depends on their residence status with the UK, which falls under three categories - ‘resident’, ‘ordinarily resident’ or ‘domiciled’.

Although it’s no laughing matter, a taxpayer can fall under one, all or none of these residence categories at the same time.

To plan a tax strategy, someone must know their residence status and how this affects the tax they pay.

A common misconception is leaving the UK means someone is non-resident for tax.

This is not correct.  To qualify as non-resident for tax, some must be absent from the UK for at least one full tax year, which runs from April 6 one year to April 5 of the following year.

If someone left the UK in March 2010, they would not be considered non-resident until April 6, 2011. 

On top of that, they can only return to the UK for a total of 93 days across the five tax years following their original departure.

Once these non-residence qualifications are met, tax liabilities change as well:

No income tax is paid in the UK on income earned overseas. Instead, income tax is paid in the new country of residence. Tax might be due on any money earned in the UK regardless of where they are resident. This covers rental income from UK property and dividends from shares held in the UK.

Capital gains tax depends entirely on timing. Selling an asset held in the UK, like a buy to let triggers capital gains tax for a UK resident, but a non-UK resident is exempt from capital gains tax.

UK residents moving abroad should keep hold of any assets that would incur capital gains tax on disposal until they are non-resident and can safely sell. They also need to check the capital gains tax situation in the country where they are resident.

Even if a non-resident returns to live in the UK within five tax years of selling an asset, they might receive a tax demand equal to the unpaid capital gains tax.

Inheritance tax is related to domicile. Once domicile is established, tax authorities can test a will to work out if an estate is liable to IHT.

At least 40,000 bets worth £5 billion has been staked on the Euro falling against the value of the US dollar in the short term that has pushed the Euro down to £1.14 from near parity not so long ago.

The bets follow the European Union getting ready to underwrite £26 billion of debts for the Greek government.

Traders are also banking on other European countries like Portugal and Italy looking for financial assistance as well.

Speculators believe these states will be unable to meet their obligations to lenders and have taken up a short position on the currency.

Economist Richard McGuire, of RBC Capital Markets, said: ‘It is almost as if the banking crisis is now being replayed in the sovereign (government debt) space. The market concerns have this almost self-fulfilling quality to them.’

Hundreds of thousands of expats are losing money if they have a pension paid in Sterling that they have to convert to Euros and pay exchange charges to pay their bills while living abroad.

If UK pension funds were transferred in to a QROPS pension that can pay out in local currencies, they could save that money.

QROPS allow fund investment in Sterling, Euros, US Dollars and other currencies that can be paid directly in to an offshore bank account that bypasses exchange rate fluctuations and bank transfer charges.

This leaves the saver with more cash in their pockets than if the pension was paid in Sterling and had to pass through several financial hops to reach wherever they live - with each hop attracting bank charges.

QROPS Adviser is a leading financial firm that handles hundreds of QROPS pension transfers a month that can offer independent and unbiased professional advice on whether a QROPS suits your retirement circumstances.

Providing no annuity or state pension is involved, QROPS Adviser can build a bespoke QROPS plan to match most currency and residence needs.

Many European countries popular with British expats face huge financial problems that are impacting on the value of the Euro.

Greece is in the news as the country is in chaos while the government battles with striking workers in efforts to try and grapple with debts that may need a £26 billion EC bail-out.

Portugal and Italy - two favourite expat destinations  - are also holding out the begging bowl as they have racked up more debt as a percentage of gross domestic product  (GDP) than cash-strapped Britain.

Shocking EC debt figures revealed

The shocking total debt figures are 114.6% for Italy, 112.6% for Greece and 77.4% for Italy. The comparable figure for the UK is 68.6% and 54.6% for Spain, according to EC figures.

In the short term, the Euro is falling as a result of this financial disaster for Europe. That means as long as the Pound does not fall as well, spending power of expats improves.

As the EU moves to bail out the faltering economies, the value of the Euro is expected to rise against the Pound and US Dollar, which will erode spending power. Some economists have suggested Greece and some other countries should quit the Euro to stop dragging the currency down.

EU will underwrite debts, confirms G7

The EU Commission has privately spelled out that Greece would be bailed out if necessary. The country’s debt has rapidly increased and stands at almost 13% of the national economy.

Wolfgang Schaeuble, the German finance minister, argued Greece would have to make financial sacrifices to rein in the deficit.

 ”Greece has to realise that when you break the rules over a long period of time, you have to pay a high price,’ he said.

He was speaking at a meeting of the G7 group of leading economies, who concluded that the EU stands to foot the bill to stop the Greek debt crisis dragging the euro down even further.

An HM Revenue and Customs task force is poring over payment records from NHS trusts, private hospitals and medical insurance firms to find medical professionals cheating the tax system.

Much of the money is squirreled away in office bank accounts, according to the taxman, who also has account details from 300 offshore banks to compare with the medical payment records.

Any medical professional who coughs up unpaid tax before March 31, 2010, will have fines reduced to just 10% of the unpaid tax in an amnesty encouraging them to come forward.

All tax owed must then be paid plus interest and penalties by June 30, 2010.

Anyone who does not come forward, but who is later investigated and found to have avoided tax, may be fined up to 100% of their unpaid tax, with a minimum penalty of at least 30%.

“There is a problem with a significant enough minority for us to provide this opportunity and the support that goes with it,” said an HMRC spokesman.

“We are talking about well-paid people - higher rate taxpayers.”

The HMRC campaign, called the Tax Health Plan (THP), follows efforts to uncover taxable income that has been hidden by UK taxpayers in offshore bank accounts - and the taxman warned that other professions might soon be under investigation.

The THP is part of the recently announced government initiative to make tax avoidance at home or abroad unacceptable by clamping down on banks, financial advisors and accountants as well as taxpayers.

The recent amnesty for offshore bank account tax cheats resulted in 10,000 taxpayers declaring unpaid tax on income in offshore bank accounts.

Many taxpayers believe because the taxman has not caught them out for a year or so, then they have slipped under the radar, but tax evasion is a criminal offence without a time limit. In some high profile cases, inquiries have looked back in to taxpayers’ financial affairs for up to 20 years.

QROPS pensions also come as self-managed, where the investor has a tight control of what happens to the money in the fund, or managed, where a professional fund manager looks after the fund.

Investors can also choose shared investment management with some QROPS providers.

Because QROPS offer more investment choice, anyone managing his or her own fund needs to be careful about balancing risk.

Balancing risk with returns on investment

As the possibility of putting money in to more stock markets, commodities, assets and bonds in major currencies beckons, investors also have to consider how cautious they want to be with their money.

Remember that the money you are investing is your retirement fund. Making shrewd investments with a good return are important, but not at the cost of being unable to fund retirement.

That’s where diversification comes in.

If recent events have taught investors anything, it’s you can have too much of a good thing, so spread the risk.

Take the UK stock market. Pensions have seen £400 billion wiped off their value because of the two most recent crashes in share prices.

QROPS pension fund managers provide a safety net

That’s not a reason not to invest in shares, but more of a warning that shares aren’t the only way to make money with a pension investment.

QROPS pension schemes give a fine level of control, for the hands-on investor, but unless you are an experienced tightrope walker, it’s always better to have a safety net.

In the same way a professional fund manager is there to protect you from yourself as much as any other reason.

At QROPS Adviser, we have a huge track record in successful QROPS pension transfers. Because we look at whole of the market options when we give advice, we can make sure your QROPS pension scheme matches your investment needs.

A QROPS gives flexible investment options, gets rid of the obligation to buy an annuity and puts the pension fund outside the reach of the taxman who wants a share as inheritance tax when the pension holder dies.

About 3,500 people transfer UK pensions in to QROPS schemes but thousands more just don’t bother.

One of the biggest problems for offshore financial advisers is the man in the pub who people want to seem to believe more than a professional.

This is because his ‘advice’ always tops what a professional has to offer.

Many offshore taxpayers who tried to avoid paying tax over recent years are seeing the pigeons coming home to roost after taking similar advice about their tax affairs.

A recent case in the High Court has given HM Revenue and Customs retrospective powers to throw artificial tax avoidance schemes.

Clients believe the man in the pub because he offers them a forlorn hope of keeping their money from the taxman. The problem is, when these tax avoidance schemes are challenged in court, they are almost always overturned, leaving the participants facing massive court bills and back tax including surcharges and penalties that more often than not lead to financial ruin.

Sometimes, these cases take years to filter through the system, and all that time the tax bill is increasing. The current case was seven years in the pipeline and has a tax cost of £100,000 attached.

Inevitably, the man in the pub who gave the advice has left to drink somewhere else, has no indemnity insurance or financial planning qualifications.

That’s why QROPS Adviser financial consultants are the professionals anyone who wants up-to-date and expert advice should listen to.

QROPS Adviser has a huge track record of successful QROPS pension transfers.

Clients also have the security of knowing that because the UK Financial Services Authority regulates the firm, they have an independent watchdog that will look after their interests in the event of any problems.

It’s clear Labour sees high-earners contributing to pensions as fair game for grabbing more cash to pay for spiralling government borrowing to pay for bailing out the banks.

Hot on the heels of the 50% super income tax rate and pension anti-tax avoidance legislation comes the latest move sees about 250,000 people aged 50 and over facing extra tax charges related to the annual allowance.

Currently, the amount accrued to a pension in any given year is multiplied by 10 to see if contributions exceed the annual allowance, which stands at £245,000 with tax due on any excess.

Government wants to raise £3 billion from pension savers

Under some unenacted small print in last year’s budget, the government is looking at linking this multiple to age, with those nearer retirement subject to a higher multiple and liable to more tax.  The government is hoping to raise an extra £3 billion in tax from the proposal - which is out for consultation.

Despite introducing tax simplification legislation in April 2006, the government has systematically added new rules and regulations mostly to close loopholes and raise extra taxes from high earners gaining 40% tax relief on pension contributions.

The government sees high earners as more willing to contribute to pensions to gain extra tax relief than to keep the cash taxed as income.

Another tax blow for medical professionals

Those particularly in the firing line are senior medical professionals nearing retirement, who generally top up their pensions with extra cash, as they get closer to 65 years old.

Because they are in public funded schemes, they do not benefit from independent financial advice like other pension savers with their own personal retirement strategies.

Medical professionals are also the targets of current HMRC tax avoidance action.

For high earners approaching retirement who are planning to return to a home outside the UK to live or retire and for UK pension savers intending to retire abroad, a QROPS scheme may be a solution to increased tax as a QROPS scheme places a pension fund outside the reach of UK tax and is not necessarily subject to the same allowance issues.

QROPS Adviser can help anyone benchmark their current UK pension performance and then assess the benefits of a QROPS transfer.

QROPS Adviser is the world leading QROPS experts with a long huge track record of successful offshore and QROPS pension transfers.

Each QROPS transfer has been with the help of a dedicated team of QROPS Adviser consultants who deal directly with Singapore QROPS clients.

All Singapore QROPS were delisted from the HM Revenue and Customs (HMRC) list of QROPS providers in May 2008 over rumoured allegations of miss selling the pensions.

The Singapore QROPS providers repeatedly denied any allegation of wrongdoing and claim HMRC did not understand how Singapore’s financial and tax rules applied to QROPS.

Nevertheless, the doors remain closed on Singapore as a QROPS centre as HMRC has not overturned the previous delisting decision.

We have worked closely with many schemes around the world to find a solution for Singapore QROPS clients and we are pleased to say this has paid off with transfers out of Singapore in to other QROPS schemes for more than 1,000 QROPS pension holders

These transfers have helped a lot people with big worries over what would happen to their money and how they would fund their retirement.

HMRC has also clamped down on QROPS schemes in Guernsey and Gibraltar within recent months, but neither was delisted after QROPS providers and tax authorities agreed to bring their schemes in line with HMRC guidelines.

Recent figures disclosed about 3,500 transfers are made from UK pension schemes to QROPS each year. Transfers so far total more than £0.5 billion.

Standard Life is one of those firms, but how do they treat your money?

Here are some recent headlines from this month about Standard Life -

Investment failure

Standard Life was fined a record £2.45 million by the Financial Services Authority after losing £100 million of investors’ savings supposed to be held in cash.

Almost 100,000 investors saw an average of just under £1,000 wiped off their pension savings overnight when Standard Life bet on toxic debts.

The FSA said investors were misled about the investment risks of the fund and criticised the firm for failing to investigate customers’ concerns.

The £2.4 billion Pension Sterling Fund was sold as a low risk home for savings for those close to retirement.  Standard Life promised to hold all the money in cash but put almost half in to complicated financial instruments, including toxic mortgages issued by bank Northern Rock. Less than a fifth of the fund was held in cash.

Endowment and pension failures

Nearly every Standard Life endowment maturing this year will fail to pay off the mortgage it was taken out to cover.

The company has admitted a 97% failure rate for mortgage endowments to hit investment targets.

A man who paid £50 a month into a 25-year mortgage endowment maturing today pays out £26,869, compared to £31,066 last year - a 13.5% drop.

Payouts on endowment plans and pensions are also down 13.5% and 5% compared to those maturing last year.

A typical 25-year term, £50-a-month savings endowment pays out £28,139 today - down from £32,534 last year.

A 20-year individual pension plan is £82,301, down from £87,095. The figures are based on a man retiring at age 65, paying £200 per month.

The FTSE 100 rose by almost 20% last year, the company revealed the value of its savings endowments and pensions grew by just 3.8% and 7.9% respectively.

ISA failure

Standard Life’s advertising boasts the company’s instant access ISA offers a market leading 2.65% interest rate to savers while inflation is running at 2.9%. In reality, anyone with savings in a Standard Life ISA is losing at the rate of 0.35%.

Importance of independent advice

A recent survey found that about 66% of people fail to take independent financial advice before giving their money to a.

QROPS Adviser could have helped many of the Pension Sterling Fund investors who are contemplating a retirement overseas or may have already moved from the UK.

Their money would have been much safer and under their control if they had completed a successful QROPS transfer.

Much of the cash was pension funds waiting for transfer to an annuity. A QROPS removes the requirement for a QROPS pension holder to buy an annuity and offers more flexible tax and investment options than a UK pension.

The special allowance is a tax penalty for anyone earning £150,000 or more who inputs more than £20,000 in to a UK pension.

The full details of the tax charge are in a new chapter added to HMRC’s online pensions manual for tax inspectors.

QROPS exempt from special allowance tax charge

QROPS are not affected by special allowance rules because the funds do not attract any UK tax relief.

The problem for many high earners is that the calculation considers total income - not just income from working.

This means a lot of taxpayers who do not earn £150,000 on their payslips are affected by the special allowance rule that reduces pensions.

Total income includes:

• Earnings from employment
• Earnings from self-employment and partnerships
• Most pensions income
• Interest on most savings
• Income from shares
• Rental income
• Income received from a trust.

Earnings from employment include the cash value of company cars, private health, cheap loans and other benefits included on a P11d return.

QROPS transfer can wipe out special allowance tax charge

The allowance was announced by Chancellor Alistair Darling in last year’s budget and is an anti-avoidance rule to stop high earners benefitting from top rate tax relief to bolster their pensions.

Any higher rate taxpayers who are living overseas or are planning to retire abroad can wipe out the special allowance charge by transferring their pension funds in to a QROPS.

To find out how the special allowance affects pensions is a six-step process to calculate relevant pension earnings - if the figures top £150,000, the taxpayer is caught in the special allowance rules, if not, the rules do not apply.

QROPS Adviser can help taxpayers thinking about a QROPS pension transfer who want to know the full extent of their special allowance liability. As a leading QROPS transfer specialist, we can also advise on the most suitable QROPS tailored to individual financial circumstances.

The figures were obtained from the Treasury by AJ Bell, an actuary, under the Freedom of Information Act. Commentators were amazed that nearly half a billion pounds’ worth of assets have so far been moved out of the taxman’s reach in the four years since QROPS were introduced.

However, when you consider that 400,000 Britons left the country in 2008 alone, the figure seems surprisingly low. By definition, anyone who takes the plunge to realise their dream and leave their homeland must have a spirit of adventure, so the reason for the relatively low take up cannot be that expats have an aversion to new concepts.

Historically, fees could have been a barrier. When QROPS were first introduced, providers were charging between 3 and 5% of funds per annum for the service. Some expats were so glad not to have to pay the much larger amount that the taxman would have wanted, that they happily parted with this amount. Others must have decided that the fund managers’ fees were not a price worth paying. Now that there is more competition in the QROPS marketplace, however, fees have come down and there are funds that are available from reputable providers for as little as £500.

No figures have been made available which show how many of those who moved abroad had final salary pension schemes. The guaranteed income that these arrangements offer can be difficult for an overseas (and, to be fair, an alternative domestic) fund to match, even considering the fact that UK tax may continue to be payable when the member moves abroad.

But with some 9 out of 10 final salary pension schemes closed to new members according to the Association of Consulting Actuaries, defined benefit benefits are going the way of the dodo. The near extinction of them in the next few years has to mean an expansion in the number of expats with regular pensions with which QROPS funds can compete on a level playing field. Bearing in mind that HMRC have approved over one thousand QROPS from all over the world, there has to be something for everyone out there.

This must be depressing reading if you are an IFA. Especially if your customers include the half of the 2035 people that ICM polled who would rather not bother with your services at all.

Ironically the pension mis-selling scandals of the 1990s seem to have both proved the need for good financial advice, and put the public off seeking it.

The survey does not report whether the respondents were questioned about IFAs being paid commission, or whether they appreciated that there must be a built in cost to the financial product to cover this.

So how can financial advisers turn this situation around, and win back the trust and respect of their customers?

The Financial Services Authority must be concerned about these results. After all, part of its mission is to help consumers get a fair deal, and to promote confidence in our financial services industry.  Perhaps clients feel that financial advice has become much of a box ticking exercise, with forms being filled in to show that the adviser has gone through the motions to satisfy the regulator, rather than cutting to the chase and telling it like it is about the investment opportunities they are discussing. A plain speaking adviser who knows his stuff will always be valued by clients.

On another note, the Equality and Human Rights Commission has added its voice to the growing debate about scrapping the default retirement age, claiming that the country will suffer if we do not hang on to older workers. As Deputy Chairman of the EHRC, Baroness Margaret Prosser explained the theory behind the Commission’s Working Better Initiative.

“Britain has experienced a skills exodus during the recession, and as the economy recovers we face a very real threat of not having enough workers - a problem that is further exacerbated by the skills lost by many older workers being forced to retire at 65.

“Keeping older Britons healthy and in the workforce also benefits the economy more broadly by decreasing welfare costs and increasing the spending power of older Britons.”

The government has its own review into this issue coming out this year, and will have to tread a careful path between assisting older people to continue to earn their living, and giving employers the flexibility to manage their workforce as they see fit.

Swindler Warren Templeton was jailed for two years for fraud and forgery after a trial at Bordeaux heard he posed as a financial adviser and persuaded several elderly victims to part with large sums of money.

Templeton then cashed the cheques in a French bank and kept the proceeds.

Now, his victims are suing Société Générale (SocGen) for alleged negligence over the case.

They say the bank should not have cashed the cheques and should have realised what Templeton was doing and reported him to the police.

SocGen has offered an out-of-court settlement that covers about a third of the losses, but says it is legal in France to put a cheque made out to the bank in the personal account of another customer.

Fraud involving expats handing over their savings on the promise of earning better rates of return than offered elsewhere is not unusual.

Expats can guard themselves against losing their money by taking some simple precautions:

• If the adviser is offering investment returns that sound too good to be true, then they generally are and ask yourself why;
• Ask for documents showing registration details and contact the regulatory body to confirm they are true. Any UK adviser must be regulated by the Financial Services Authority;
• Never hand over any money if you are not absolutely sure that the investment scheme and adviser are genuine and trustworthy;

Swindlers are not called confidence tricksters without a reason.  If they did not gain a victim’s trust, the scam would not work.

One of Templeton’s victims, Steve Coleman, 55, retired with his wife to the Dordogne after running a soft furnishings business in Kent, told The Times: “We met him through friends at a time when we were looking for someone who could help us to invest our money. He said he had interesting projects.

“We started in a small way and as we seemed to be getting a good return, he persuaded us to give him gradually more and more.”

Currently set at 18%, the relatively low rate of CGT doesn’t seem to sit right alongside income tax rates of up to 50%. The discrepancy is particularly odd when you consider that many people can lawfully structure their affairs to choose whether they receive capital or income. Most crude avoidance schemes have been shut down, but structuring the pay deal of a high earner so that they are remunerated in shares is still permitted and commonplace.

 ”In so far as there is a difference [between capital and income], it is by no means clear why one should be taxed more heavily than the other,” said Nigel Lawson when he was Chancellor of the Exchequer in 1988. Subsequent governments have treated capital and income differently, supposedly because lower CGT rates are thought to encourage entrepreneurialism.

So what will entrepreneurs make of the change? The rumblings coming from the business world are predictably horrified. In 2007/8 there was a glut of business sales after Mr Darling pared down the reliefs available and at that time. This time around, there is likely to be a flood of second homes and buy-to-let properties to the market this spring, to beat the new rates.

Speculation is rife about what the new rate will be. In the bleakness of the current economic climate, taxing the better off is not just a dry issue, but is a political hot potato. The government has said that those with the “broadest shoulders” should bear the burden of the recession, but setting the rate as high as 50% would surely empty the country.  25% is the figure that has been promulgated by commentators and financial advisers alike.  

It is likely that many Brits who are undecided about emigration will sit tight until firm plans are introduced. But when you consider our high tax rates, inflexible pension arrangements and poor weather, a retirement abroad sounds very attractive indeed.

London and Colonial, a specialist firm that offers SIPPS to UK and European customers, said there had been a 154% increase in pension pots transferred to QROPS since tax rules were changed on alternative secured pensions (ASPs) in April 2007.

Adam Wrench, London and Colonial’s product development manager, said: “It is no surprise to read that investors are turning to QROPS rather than ASPs when they reach 75 years old. The 82% tax rate levied on death on an ASP is an immense disincentive to use the schemes.

“People do not want to give the tax man the vast proportion of the wealth for which they have saved all their lives, they want as much as possible to go to their dependants. So investors and their advisers are sensibly seeking out alternatives.”

Pension savers are switching to QROPS because the scheme gets rid of two of the major problems for retirees - no annuity or alternative secured pension needs to be bought with the fund after tax-free drawdown and the QROPS structure generally places the fund outside of inheritance tax rules.

These two factors mean that the fund should pay a better investment return than an annuity and when the scheme member dies, the remaining money can be passed on to family and loved ones without additional taxation.

QROPS adviser is an experienced independent financial firm that has a track record in completing successful pension transfers to QROPS.  Our objective is to match the client with the right QROPS scheme to match their personal financial circumstances.

Not every QROPS plan may suit every pension investor’s financial aims, which is why QROPS Adviser consultants are specialists with access to cross-border tax information and the whole of the QROPS market offered by 1,400 providers worldwide.

Another SIPP provider, AJ Bell, has released figures showing about 3,500 UK pensions are transferred to QROPS every year and that the schemes are saving investors about £1 million a day in tax. The data was received from the government in response to a Freedom of Information Act inquiry.

Marketing literature had referred to the Sterling Pension Fund as being invested in cash, when in fact most of the fund was invested in floating rate notes in July 2007. The risk profile of these two investments is clearly different, and the FSA held that the members may not have put money into the funds had they been given correct information.

Members of the Standard Life marketing team had expressed concerns about the accuracy of the material, but the FSA investigation found that their opinions were ignored. Standard Life’s actions went against the FSA’s principle that investors should be educated about the choices they make.

There were 98,000 customers of the fund on 23^rd December 2008.

Commenting on the decision, Margaret Cole, FSA director of enforcement and financial crime concluded:

“It is critical that consumers are given an accurate understanding of the nature of investment products and the risks involved. Without this information, consumers are unable to make informed decisions about whether investments are suitable for their individual investment strategy. Throughout 2010 and beyond, the FSA will continue to take strong action when a firm’s financial promotions fall short of the requirement to be ‘clear, fair and not misleading’ and customers have not been treated fairly.”

The fund had suffered unexpected losses of 4.8% (around £100m) as of 14 January 2009. In an attempt to restore investors to the position they would have been in had the marketing material been correct, Standard Life injected £102.7million into the fund and carried out an investigation into whether members of the scheme required further compensation.

The FSA took this payment, and Standard Life’s full cooperation with their own investigation into account when deciding on the figure that they would impose as a fine - the FSA had originally intended to impose a £3.5million penalty.  The discount came as a surprise to many, given that the staff at Standard Life who initially raised objections to the marketing material in 2007were ignored.

A spokesman from Standard Life has confirmed that no one will lose their job as a result of this decision, claiming that “the FSA has identified that there were flaws in both our systems and controls however they have not identified any particular individuals. No heads are going to roll on the back of this fine from the FSA.”

But financial institutions all over the City must be reading and rereading their marketing material following the announcement of this fine.

Speaking at a bowls club earlier this week, he explained the details of his planned £20bn spending spree.

“You would provide to all pensioners the existing basic state pension together with the amount of the pension credit which a number of pensioners now have to claim for and, of course, a quarter of them don’t do it. That would be a living pension, which would be the basic pension together with the current level of the pension credit.”

Older people do not claim pension credits for a combination of reasons. Some find the forms too difficult; some are unaware that they are entitled to payments; others simply feel too proud to ask the government for money. It is unlikely that the baby boomer generation who are about to retire will feel a similar reticence about coming forward.

Mr Wyn Jones intends to roll the scheme out to the over 80s first, gradually extending the extra payments to younger pensioners.

Of course, the plans have been derided as being “half-baked” by the other parties. Welsh Liberal Democrat leader Kirsty Williams thinks that the proposed scheme would jeopardise other services, claiming that a government “simply cannot fund huge pension increases for millions of people, without endangering the front line services upon which many older people depend.” Labour and the Tories were similarly dismissive, claiming that such proposals were “fantasy politics” that could not be delivered.

But whilst this proposal has not attracted cross party support, it is widely accepted that older people are struggling financially on what is currently available. And given that this demographic group are statistically the most likely to turn out on election day, their votes are going to be hotly contested over the coming weeks, as polling day looms.

Campaign groups Help the Aged and Age Concern regularly make representations on the issue, and took the recent Plaid Cymru plans as “an acknowledgement that the state pension is too low.”

However, no one has come up with a palatable method of financing the state pension in the coming age of austerity. Plaid Cymru are framing the debate as one of priorities. Is the London government  prepared to drop Trident renewal and I.D. cards in favour of looking after vulnerable members of society?

Between April, 6 2006 and April 5, 2008 - the latest date that pension figures are available for - the taxman confirm 7,300 pension investors transferred their funds out of the UK in to a QROPS.

The transfers added up to about £0.5 billion in retirement savings.

QROPS transfers were way out in front of the offshore pension transfer race, with the ‘alternatively secured pension’ (ASP) only picking up about 2,000 transfers in the same period.

These statistics are the first solid figures issued about QROPS transfers since their inception in April 2006.

The QROPS data was in response to a freedom of information query from SIPP and SaSS provider AJ Bell.

“The introduction of this tax penalty in April 2007 resulted in a 154% increase in the amount transferred to QROPS versus the previous year,’ said Andy Bell, chief executive at AJ Bell.

“This is only one of the steps being taken to escape the 82% tax charge on the death of an ASP. The few who can afford to, simply move offshore or pay the fees associated with the available onshore structures.

“The current government are losing around £1m each day to overseas pension schemes yet seem ignorant of the need for immediate reform.

“This is proof that penal tax charges only serve to encourage distortive behaviour at a significant cost to the Exchequer. This is only one of the steps being taken to escape this tax charge. The government now accepts that buying an annuity with a pension is not compulsory.”

The figures show that between 3,000 and 5,000 UK pension investors are looking to transfer their funds offshore and that many opt for a QROPS scheme every year.

To set off a transfer, QROPS providers require prospective clients are referred to them by a regulated and independent IFA like QROPS Adviser.

The QROPS Adviser service benchmarks a pension clients current fund performance and then selects an offshore pension that matches the client’s financial and retirement objectives with a list of recommended products from 1,400 or so QROPS schemes on the market.

The lowest age for drawing a UK pension is 50 - but from April 6 this jumps up five years to 55 years old.

Hundreds of thousands of retirement savers need to decide what to do while the window of opportunity is open - and the decision needs to be made quickly as the deadline may be April 5, but making financial arrangements and taking advice can eat in to that time.

Pensions dilemma for savers in their 50s

For UK pension savers, the decision is straightforward - leave the cash where it is or take the 25% tax-free lump sum and reinvest where the saver has control over the money.

For expats and international workers, leaving the money in a UK pension is generally a poor financial decision as a QROPS often provides a better solution.

A QROPS takes away the issues of investment return, funding an annuity and exchange rate fluctuation eating in to spending power.

Remove retirement uncertainty with a QROPS

If you are an expat or international worker with UK pension rights affected by the change in pension retirement ages, then contact QROPS Adviser to discuss your options when taking your pension offshore.

Most pension investors are taking their money out of UK pensions because of the uncertainty over the UK economy when the longer their money is left rolling up in the pension means that they would have a bigger lump sum to draw down.

QROPS Adviser can show offshore pension investors how to remove that uncertainty and grow their retirement savings in to a bigger nest egg at the same time by a pension transfer out of the UK in to a QROPS pension.

Nevertheless, the clock is ticking and April 5 will soon come and pass, so if you are wondering what to do about your retirement savings, you need to take action … and fast if you want to draw down that tax-free money.

Bill Gross, manager of the Pimco Total Return fund supported UK and US government investments but has changed his mind in the fund’s latest investment outlook.

“If 2008 was the year of financial crisis and 2009 the year of healing via monetary and fiscal stimulus packages, then 2010 appears likely to be the year of “exit strategies,” during which investors should consider economic fundamentals and asset markets that will soon be priced in a world less dominated by the government sector,” said Gross.

“If, in 2009, PIMCO recommended shaking hands with the government, we now ponder “which” government, and caution that the days of carefree check writing leading to debt issuance without limit or interest rate consequences may be numbered for all countries.”

Investment should go to more fiscally responsible countries

Investors should look towards putting their money in countries where governments have been more fiscally responsible, like Germany and France, where financial leaders have repeatedly criticised the economic path followed by the US and USA.

“The shifting of private investment dollars to more fiscally responsible government bond markets may make for a very real outcome in 2010 and beyond. Additionally, if exit strategies proceed as planned, all US and UK asset markets may suffer from the absence of the near $2 trillion of government checks written in 2009,” he said

“It seems no coincidence that stocks, high yield bonds, and other risk assets have thrived since early March, just as this “juice” was being squeezed into financial markets. If so, then most “carry” trades in credit, duration, and currency space may be at risk in the first half of 2010 as the markets readjust to the absence of their sugar daddy.”

PIMCO speaks for thousands of institutional and municipal investors worldwide and holds more than $950 billion of funds.

Quality standards assessor Investor In Customers (IIC) claims client relationships are not at the heart of many SIPP provider’s services in a 23-page sector report.

“Advisers are concerned about administration standards,” said the report. “They are often poor and the adviser community is challenging SIPP providers to raise standards.

“While the administration concerns pick up issues like poor documentation that fail to engage with clients, and some of the well-publicised issues around cash and deposits, it is as much to do with the attitudes of the servicing staff.”

Neil Craig, managing director of IIC, said the survey had been carried out on the back of a recent Financial Standards Authority (FSA) report on small SIPP providers.

Advisors have worries about safety of client money in small SIPPS

He said the IIC finding reinforced those of the FSA, who wrote to more than 60 small SIPP providers at the end of last year warning them to tighten up their administration and show more transparency about hidden charges and conditions.

Mr Craig said: “It may well be that many of those problems have been brought about by the failure of those businesses to engage with their customers effectively and understand their needs, all aspects of customer relationships that IIC explores.”

Meanwhile, research by a SIPP provider found a number of advisers were concerned by provider risk management procedures and safety of clients’ funds.

John Moret, marketing director at Suffolk Life, said: “Investing in a SIPP is an important decision, and one that should have considerable longevity.

“It is therefore crucial that advisers and their clients have confidence in their SIPP provider, and advisers need reassuring that they are recommending a provider who will act with transparency, integrity and due care.”

To transfer you SIPP over to a QROPS, contact one of our advisers today.

The Pension Simplification initiative that was unveiled in 2006 was far from simple. So when the scheme alluded to a new rule that private employers must contribute to a national pension fund on behalf of their employees, small businesses held their breath to see what the detail of the plans would involve. They feared that the administrative costs and red tape involved would have a severe impact on their profitability.

The Forum of Private Business commissioned a survey on the impact of the proposals in 2006, the results of which revealed the strength of feeling among the small business community. 70% of those questioned feared the new scheme, with 64% of respondents claiming that compulsory contributions would stop them taking on any new employees at all. 42% claimed that the proposals would hamper investment into their businesses. So did Ms Cooper listen to them?

She has provided for a gentle introduction to the scheme for SMEs. Businesses with fewer than 50 employees have until 2016 to comply with the rules. And the minimum employer’s contribution will be staggered, starting at 1% and rising to 3% over the next 10 years.

This has provided the business community with some comfort. Joanne Segars, Chief Executive of the National Association of Pension Funds appreciates the “more pragmatic approach they have now taken.”

However, the CBI is concerned that the rules may still be too complex. Their Director of Employment Policy Katja Hall said that the government “needs to ensure it does not make the system too onerous for companies who are already doing more than the law will require, or it could encourage them to cut contributions to the legal minimum.”

On another note, it was reported earlier this week that Harriet Harman planned to abolish the default retirement age, in favour of allowing older workers to continue their employment for as long as they felt able. A couple of days later, business leaders were treated to a letter that proved that the left hand had not told the right hand what it was up to. Peter Mandelson, head of the Department for Business Innovation and Skills denied that the government had any firm plans to tinker with retirement policy. He did however concede that a review of the subject is forthcoming.

HM Revenue and Customs work hard to try and maintain consistency in more than 1,000 QROPS plans offered across 40 countries by policing how pension providers are applying the small print in the rules.

In theory, the terms and conditions of a QROPS should be the same wherever you choose to open the plan.

That’s where the ‘qualifying’ term comes from in the name - a QROPS is only a QROPS if the plan meets the rules laid down by HMRC.

Matching strategy to fund performance is crucial

The real question is which QROPS provider’s plan best meets your personal retirement strategy, not how a QROPS can save you tax or how much cash can be drawn down.

Any QROPS provider will ensure someone opening a scheme has ‘best advice’ from someone like a QROPS Adviser consultant.

Our advisers are fully conversant with QROPS worldwide and tailor a scheme to match your financial objectives.

Besides all the usual financial planning safeguards, a QROPS Adviser consultant will make sure that you consider several factors that affect your fund:

• Tax on fund growth in the country where your scheme is opened
• Tax on income in the country where you intend to retire
• How currency fluctuations between your fund and where you live impact on your spending power
• Fund performance and management comparisons between different QROPS providers

QROPS Adviser tailors a QROPS plan to suit you

These are just a few of the points that can make a big financial difference when you retire - so yes, a QROPS can save a British expat or international worker with UK pension rights tax.

Other benefits include no obligation to buy an annuity and passing on your fund without inheritance tax when you die.

Just remember these are the hooks to get you in the door.

What you really need is what QROPS Adviser provides - full whole-of-the-market knowledge to pick the right QROPS for you.

For instance, one fund manager may outperform rivals in emerging market investments while another may be ahead on commodities.

Every QROPS plan should save you tax, but not many advisers will have the depth of knowledge to make sure you sign up for the right plan.

A-Day - April 6, 2006 - was aimed at simplifying pensions by changing rules and regulations.

New pension products like stakeholder schemes; SIPPS and QROPS were introduced to make retirement planning easier for UK taxpayers and expats.

In fact savers can almost pick any letter and come up with a scheme to match - let’s not forget ISAs and OIECS for instance.

The latest member to join the financial alphabet gang is a NEST - National Employment Savings Trust - a government-sponsored scheme to help workers build a pension pot that is due to start in 2012.

In fact, financial products seem to be designed by a Countdown contestant - “I’ll have three consonants and a vowel….”

Sorting out a pension is a nightmare

The reality is pensions are more complicated now than they were ever before and the Financial Services Authority (FSA) and HM Revenue and Customs (HMRC) are forever chasing their own tails fire fighting schemes that challenge the spirit of the schemes.

Add in the extra issues of international tax planning and fluctuating currency exchange rates for expats, and the whole sector becomes a nightmare.

Deputy Labour leader Harriet Harman has floated the idea of letting people work until they are 80 years old and other politicians are talking of raising the current retirement age to 70 or 75 years old in the near future.

Contact Qrops Adviser for specialist independent pension advice

Planning for retirement does not only mean the goalposts are constantly moving but the return on investment is blunted by low interest rates and the boom-bust economy.

One way of negotiating the pension maze is discussing your financial plans with a Qrops Adviser.

Ask Qrops Adviser about the pension providers they will discuss with you - a bank is likely to have a tie-in with just one pension company and some independent advisors are in networks that have a limited number of pension choices as well.

After talks between Treasury officials and Gibraltar Chief Minister Peter Caruana, the self-governing British territory, QROPS Adviser understands a behind-the-scenes agreement has been made between the two countries.

The result is that sometime during 2010, Gibraltar will amend tax law relating to 0% income tax on pensions for the over 60’s in the territory in line with HMRC Qualifying Recognised Overseas Pension Schemes (QROPS) rules.

Tax change is a climb down for pension funds

An official involved in the talks has been quoted as saying: “An agreement has been reached that resolves the issue, to the satisfaction of the industry in Gibraltar and the government in Gibraltar, as well as the UK Treasury,”

No further details are available and neither side is making any official comment at this stage.

However, a tax law amendment in Gibraltar is a climb down for pension administrators who have spent months in negotiation with HMRC and threatened to take legal action against the UK if the taxman refused to recognize the country’s tax rules.

QROPS pensions vital in retirement planning toolkit

The row about taxation had been rumbling on for some months, with

Gibraltar’s Association of Pension Fund Administrators  (APFA) stopping transfers from UK pension funds to QROPS in September.

APFA said the argument is over a 0% income tax charge on pension income for the over 60s.

HMRC said that pension income from QROPS schemes must be taxed and that a 0% rate is not a tax.

APFA argued that 0% is a tax - similar to zero rate VAT in the UK and 0% corporation tax on the Isle of Man.

Retaining QROPS status is important for Gibraltar as the territory attempts to build an offshore finance centre to rival the Channel Islands and the Isle of Man.

Without offering QROPS pension schemes, Gibraltar would be missing a big component from the offshore financial advice toolkit for retirement planning.

She claims changing retirement laws is necessary to challenge the idea that workers were past it when they reached 65 years old.

Of course, this proposal has nothing to do with the pension-funding crisis by allowing people to contribute more for longer.

Ms Harman has announced a “fast-track” government review of the retirement.

Under her proposals, workers would not have to work beyond 65, but would have the option to do so. Employees would have a legal right to a request to work part-time or from home.

If approved, the change would apply retrospectively, covering anyone who has signed a contract saying they will retire at 65. Currently, 1.4 million people still working who have reached state pension age - that is 60 for women and 65 for men.

This move is one more nail in the coffin for UK pensions - and one of the best ways of taking control of your own retirement is looking at a QROPS pension if you are an expat or overseas worker with UK pension rights.

Talk to QROPS Adviser to find out if this is a suitable option for you.

Ms Harman said: “People are remaining active and healthy well into their older years. But there is no legal backing for you at the moment if you want to stay at work, so what we are proposing is a massive public policy change. The retirement age is arbitrary. It bears no relation to people’s ability. Think of people running their own business: they don’t shut up shop suddenly when they reach the age of 65.”

Many business leaders believe that a “cut-off” point for retirement should remain and are wary of further flexibility in employee rights. Some businesses, like the Nationwide Building Society, let people work until the age of 75.

Keith Frost, of the Age and Employment Network, said that the default retirement age for workers should be scrapped. “It should be about what they contribute, not about the fact that they’ve just had a significant birthday, which makes them surplus to requirements,” he said.

HM Revenue and Customs remains tight-lipped about possible action that may see hundreds of schemes removed from the QROPS register - reducing the available products from about 1,700 down to about 350 schemes.

An HMRC spokesman said tax experts were ‘looking carefully’ at the operation of transfers to QROPS and would act to counter any abuse of scheme rules.

HMRC would not confirm whether ‘clarification’ documents are nearing release to advise providers what actions constitute abuse that may lead to substantial fines and penalties for them and their clients.

These penalties can rise to as much as 55% of any unauthorised transfer or withdrawal of pension funds.

A QROPS - Qualifying Recognised Overseas Pension Scheme - is a special pension arrangement that allows expats or international workers with UK pension rights to transfer their UK pension funds overseas if they move permanently out=side the UK.

HMRC has already acted to halt perceived abuses -

• Singapore providers were removed from the QROPS list in 2007
• Tax officials in the Channel Islands had to make changes to trust legislation to stop UK pension transfers in to a QROPS. The trust then collapsed and clients withdrew the pension cash without tax before they were allowed to draw benefits under the plan rules.
• Prospective Gibraltar QROPS providers are embroiled in a continuing row over tax on pension benefits and have frozen transfers in from UK pensions.

Industry rumours claim HMRC is drowning in a flood of inquiries from providers who claim that QROPS legislation is poorly written and ambiguous, leaving them and advisors open to possible penalties despite trying to give best advice.

These rumours highlight the importance of arranging any overseas pension transfer through a regulated, independent expert, like QROPS Advisor. The importance of regulations means anyone who has taken advice by a regulated advisor usually has an independent watchdog to protect his or her investments.

Now billions of pounds is being sucked in to the pensions black hole of most major UK employers, now is a good time to review whether that best advice still stands good if you are retiring abroad or an international worker.

A quick look around some of the major UK companies shows that some of their pension deficits are bigger than their market value - take British Airways as an example.

The company’s market value is £2.2 billion but the pension shortfall is £3.7 billion.

If British Airways crashes, then the government’s Pension Protection Fund takes on the liability, but the risk is benefits may not be maintained at the same rate.

Company pensions have been sandbagged by holes in the rules. In times when the economy was doing well, employers were allowed to suspend contributions, but when the economy worsened, the missed contributions could not be made up because of lack of cash and reduced contributions from working members who lost their jobs.

Just as there is no guarantee of a job for life any more, there is no guarantee that an occupational pension will pay out at the level expected.

For scheme members in the UK, they look forward to crossing their fingers and hoping all goes well. Those overseas or international workers returning home have another option - taking control of their own retirement funds with a QROPS.

Comparing company pension benefits and performance with switching the fund in to a QROPS can show some surprising advantages.

The company scheme may have enhanced guarantees, but when these are weighed against tax savings and other QROPS flexibilities like having no need to buy an annuity, the plus and minus sides of ledger are pretty much equal.

QROPS Advisor can compare your occupational benefits with those from a QROPS tailored to your needs. Considering a switch could remove a lot of stress over funding retirement and put you in control of your finances.

The pension detectives work for the Pension Tracing Service, part of the UK government’s Pension Service.

The service has a database of more than 200,000 pension schemes - all you have to do is tell them as much as you can about the schemes you belonged to in the past and they will do the detective work.

The database service is free, and you should receive a list of the current contact details of the pension trustees.

Next, you contact them and ask for your fund status and transfer value so you can give this information to QROPS Advisor so they can include any pension entitlement you might have in your QROPS scheme.

Many people contribute in to several pension schemes for a short time during their working life and do not consider consolidating all the funds in to their QROPS as an option.

It makes sense to switch as much money as you can in to your QROPS, and if you already have some small amounts across several schemes, consolidation may well save you charges and give better fund performance.

The more information you can give the pension detectives the better. They will want to know if your pensions are personal or company schemes.

For personal pensions, find out:

• The scheme name
• The address where the scheme was based
• Any bank, building society or insurance company involved with the pension

For company pensions - also called occupational pensions or works schemes - find out:

• Has your former employer traded under a different name or ceased trading?
• The type of business you worked for
• When you belonged to the scheme

Contacting us to organise an investigation.

The odds are that:

• A huge proportion of the advice is out of date
• Much is inaccurate although probably well meaning
• Many sites are sales pitches
• A percentage is downright misleading

So how does someone looking for QROPS advice find reliable information on the web?

Step 1 - Get your own act together

For an advisor to give you relevant advice that suits your personal financial needs, you must start a folder with details of your savings, investments and retirement funds.

Step 2  - Find the right advisor

QROPS are specialist retirement and investment plans that need tailoring to your needs by independent financial advisors who have knowledge of the QROPS market.

The key questions are:

• Are you an independent financial advisor?
• Do you have access to every QROPS product worldwide as a ‘whole of the market‘ advisor? Currently about 1,500 providers offer the schemes in dozens of different countries.
• Do you have knowledge or access to cross-border tax advice relating to income tax, capital gains and inheritance tax?
• Does the Financial Services Authority regulate you to give advice to UK nationals or international workers in the UK?

The answers to each question must be ‘Yes’. QROPS Adviser cover tick all the above!

Step 3- Benchmark your current financial standing

Using the information above and discussing your financial goals and attitude to investment risk, QROPS adviser can find the right QROPS scheme to suit you.

Step 4 - Don’t get strangled in red tape

QROPS Adviser will be working on your behalf to make the administration of setting up your QROPS go without a hitch.

British expats or international workers who have built up pensions in the UK should make their resolution finding out about transferring their retirement funds in to a Qualifying Recognised Overseas Pension Scheme (QROPS).

Despite QROPS opening for business in 2006, many people who plan to retire abroad don’t know they could boost their pensions by consolidating their funds out of the UK system.

Not only can a QROPS put a pension fund outside the reach of the UK tax man, but also out of the hands of struggling company pension schemes. Switching to a QROPS can give you control over your own future, rather than leaving your money at the mercy of others.

Key QROPS benefits include eliminating the need to buy an annuity, as has a more flexible drawdown scheme and any remaining funds can pass to heirs on death clear of any UK inheritance tax.

A QROPS gives access to thousands of funds in any currency and share portfolios in international equities, as well as fixed-interest and index-linked securities, like OEICs, unit trusts, offshore funds, investment trusts, and commercial property.

For the best advice use QROPS Adviser who is part of a UK regulated independent financial advisor firm, QROPS Adviser can confirm previous experience in thousands of successful transfers, knowledge of cross border taxation and who can demonstrate a ‘whole of the market’ approach and not just recommendation of a narrow selection of QROPS firms.

This way, anyone planning a transfer can ensure they receive advice tailored to their personal financial circumstances and are not steered towards a less suitable product.

Once the switch between a UK pension and a QROPS is made, the QROPS is managed in the country where the scheme is based - and another advantage is the pension holder can live anywhere else except for the UK.

Investigating how a QROPS can change your retirement should be a resolution that you keep -  even if you let the others, like losing some weight or drinking less, slip.

In 2010, 12,000 people will be aged 100 years old or older. In 10 years, this number will double to 22,000 and by 2050, will hit 280,000.

Yes that really is 280,000 and not a misprint!

Don’t forget that an increasing number of centenarians also mean a corresponding increase in the number of pensions.

In 2010, the number is about 12 million. By 2050, this rises to 16 million.

An older society offers challenges

Department of Work and Pensions Minister Lord McKenzie said: “It is clear that in the coming years an older society offers great opportunities as well as challenges.

“Opportunities for those in retirement to continue working, learning and contributing to society, but challenges around how best to support this group. Over the last few years we have built the foundations that will allow us to respond to these challenges.

“The biggest changes to pensions for a generation will mean that millions of people will be saving for their retirement, many for the first time. While our changes to the state pension will make it fairer and sustainable for the long term.

“Along with other proposals to deal with an ageing society - in particular our vision for a new care and support system - we are already working to meet the challenges and aspirations of an older population, both now and in the years to come.”

Tough decisions about funding retirement

For individuals, some decision has to be made about whether relying on State aid is enough  - and if it’s not what are the alternatives?

One set of pension and tax rules applies to those who intend to remain in the UK with ISAs, and personal pensions.

Another set of options is available to those who retire abroad - including low tax investments in bonds and QROPS pension schemes.

The clear message is no one lives forever - but it might just seem like it as the 21^st century progresses.

Top of the list are property, tax and finance.

The three go hand-in-hand and need sorting out before you make a move if things are to run smoothly.

Property

You probably already have some idea of where you want to live and whether you are buying or renting a home.

You also have to consider what to do with your UK property, if you own any.

Selling your home before you go is probably necessary to have a cash pot to rent or buy at the other end.

If you have investment property and need to sell that as well, then do not sell until you become non-resident. UK residents pay capital gains tax, but non-UK residents do not.

Tax

Besides capital gains in the UK, you have to consider whether you pay any similar tax on your UK property disposals in the country you now call home.

Other key taxes are income tax on your pension and investments and inheritance tax on your estate.

Finances

You have no choice about taking your State pension, as is wherever you live. Other pensions are a different matter.

Many expats or international workers with a UK pension take the benefits in Sterling that cuts their spending power overseas because of currency fluctuation between the Pound and other major currencies. Keeping a personal or employer pension in the UK also means having to buy an annuity that dies with the holder.

One solution that eases the financial problems Brits and international workers with UK pensions have is a QROPS.

This is a special offshore pension scheme that has similar rules to a UK personal pension but eliminates some of the downside -

• Benefits are paid without income tax deducted in any major currency, so you can live in a low tax country and increase your spending power because the money you receive is not affected by exchange rate changes.
• Most UK pension funds that have not yet purchased an annuity can be transferred in to a QROPS scheme, so you retirement savings can be consolidated and maximised.
• QROPS holders do not have to buy an annuity and in most cases, the fund is exempt from inheritance tax when the policyholder dies, so is passed in full to the beneficiaries.

Just think of how much more relaxing your retirement will be without the stress of worrying about living on a fixed income and paying taxes in the UK when they are lower where you live.

Not only is time not the essence, but they also face two other pressing issues -

• Income is often low so finding the cash for savings or investments is difficult, especially if paying back a student loan
• The twists and turns of fortune generally mean that few of us end up in the career or live in the place where we started out or planned to reach

Many young, single, well-qualified international workers end up in the UK either because they have qualified at a British university or because their job skills command better salaries in the UK than elsewhere.

Setting up as a freelance or contractor is often the trading option for international workers in the UK and among the set up procedures is the question of a pension.

For non-UK workers domiciled in another country, all the time spent living and working in the UK is time building up pension rights.

If a salary leaves cash to spare, then it’s sensible to consider saving.

One of the best options is a QROPS, short for a qualifying recognised offshore pension scheme. The scheme lives outside the UK where the fund can grow with little or no tax impact while the pension holder can stay in the UK or live or work in any other country.

As long as the intention is to retire outside the UK, then an international worker can start and contribute to a QROPS.

The advantages are that a little put aside often over a long period will build a reasonable pension fund in a low tax country - like Guernsey or the Isle of Man.

The trade off is contributions do not receive any UK tax relief, but the pension benefits can be taken in a country with low tax.

Other more flexible investment options and no obligation to buy an annuity are also important considerations.

A judge at Worcester Crown Court jailed Peter Roope for to seven years, reduced to four years and eight months because of his early plea; Gareth Matthews was sentenced to six years, reduced to four years because of his plea.

Three other defendants, Charles Frisby, Douglas Miller and John Roope, were found guilty of conspiracy to defraud.

The jury was unable to reach a verdict on a sixth defendant, David Usher.

Frisby, who was based in Yorkshire and helped to set up the scam business, drafting business documents and marketing literature, was sentenced to four years and six months. He worked with Miller, of Nottinghamshire, who produced the group’s website and literature and was given a sentence of three years and six months.

John Roope, the twin brother of Peter Roope, who lived in Australia and promoted the group in Southeast Asia along with Matthews, was sentenced to two years.

The men, who operated under the name Prudential Commercial Investments, conned overseas independent financial advisers (IFAs) into persuading their clients to invest money in commercial property loans.

The victims were told their funds would be channelled into a lending scheme for commercial property buyers in Britain and that they would reap high returns.

But the fraudsters instead diverted the money into offshore bank accounts and used it for their personal benefit. In total, £1.93m was taken from 56 investors.
 
The fraudsters did not target consumers directly, but instead used slick sales material to target IFAs operating in the expat investment sector and then relied on them to pull in business from their established client base.

The fraudsters also offered IFAs commission of between 4% and 6%, and told them it had a five-year trading track record, worked with well-known and reputable service providers and had a £12.4m portfolio.

For those living and retiring in the UK, choices are limited - most advisors would suggest stashing cash in an ISA every year up to the limit and then going for some sort of pension scheme.

This is OK if you are staying in the UK, but expats and international workers lose all the tax benefits of these retirement investments.

The alternative is transferring pension funds offshore in to a scheme called a QROPS (Qualifying Recognised Overseas Pension Scheme.).

Someone with UK pension rights retiring abroad pick up a lot more tax benefits and investment advantages from a QROPS rather than a UK pension.

A QROPS is not necessarily the right investment for everyone overseas with UK pension rights.

Retirement planning across borders is even more complicated than retirement planning in the UK and the pool of knowledgeable and competent advisors shrinks considerably.

QROPS planning has to take in to account tax and other regulations in three places - the UK, the country where the QROPS is based and the country where the expat or international worker lives.

Considering the current state of the UK economy, the return on investments and annuities and the pensions black hole, if you are considering retiring abroad then adding a QROPS to your action list is a ‘must do’.

Not only does retirement planning overseas have to take in to account investment return, but also currency exchange fluctuation and inheritance tax planning.

Many QROPS investors find they are significantly financially better off than moving abroad with a UK pension.

Issues that limit a UK pension and cause avoidance issues with companies plugging tax saving schemes like having to invest in an annuity and not being able to pass a pension fund on to family or loved ones are eliminated.

Currency and investment flexibility also covers of investing only in Sterling as a QROPS pays out gross benefits in many major currencies.

Anyone who is a QROPS, SIPPS, SASS or other pension saver who celebrates their 50^th birthday on or before April 5, 2010 hits that golden barrier that is the youngest age when a pension can be drawn.

But from April 6, 2010, the bar is lifted another five years to 55-years-old and your pension cash must remain untouched until then unless the pension has a specific clause allowing earlier retirement.

Think QROPS to avoid annuity trap

Expats or international workers with UK pension rights need specialist advice about whether to transfer any UK funds in to a QROPS to avoid the annuity trap.

Current annuity rates in the UK are a typical 3% - 4%, but a QROPS offshore pension removes the obligation of buying an annuity and accesses more flexible investment opportunities.

Time is running out to debate these important financial decisions with an independent financial advisor and to set the process in motion to make best use of retirement funds.

Transferring a pension from the UK to a QROPS can take 12 - 16 weeks from start to finish, and that means if savers do not spring in to action now, they may miss out on the chance to cash in.

Pension firms confirm rush for funds

Even if your 50^th birthday is only a day or two before April 6, 2010, you can still prepare your retirement plans now to drawdown 25% of your pension fund tax-free.

Several pension providers in the UK are reporting a rush from investors in their early 50’s to access funds.

Standard Life head of pensions policy John Lawson said: ‘There has been an increase in the number of people in their early 50s accessing their pension.’

In the past year, Scottish Life reports a 20% in investors aged less than 55 drawing their pension.

About 20% of expats claim a Sterling pension and are suffering a drop in buying power due to the weakening of the Pound against the Euro, says a survey by Moneycorp, a currency exchange company.

More than one-in-four Brits living in Spain (28%) and over a third in Germany (33%) rely on their pensions as a core source of income. 

Expats rely on pensions as key income source

Yet the research reveals that nearly a quarter (22%) do not monitor the currency markets to avoid losing out money when making overseas payments.

The currency exchange problem also affects many expats living in the US and Canada. Those in other favourite destinations like Australia and New Zealand are currently finding life easier as the Pound is steadier against the Australian and New Zealand dollars.

David Kerns, Head of Private Clients at Moneycorp said: “Our research findings are not surprising as a high number of Brits living overseas rely on their pension as a key source of income, as well as sterling income from house lettings in the UK and their savings.”

QROPS pension switch solution

Many of these expats and international workers could wipe out the problem by switching their personal pensions paid in Sterling to an offshore pension called a QROPS that can pay out gross pension benefits in any major currency.

Pensioners receiving a UK State pension or annuity do not have the QROPS option, but the solution is available to most others paying in to a pension or with cash ready to buy in to annuity.

The poll shows many expats are ready to give up their life abroad to gain more from their pension - but with a QROPS they can have the best of both worlds - a pension hedged against currency fluctuation and they can stay in their home overseas.

A QROPS also has many tax advantages and investment flexibility for as a pension for international workers.

The Government’s ‘scorched earth’ pensions policy will discourage those with a high income to look for alternative investments as new rules make pensions less attractive than other options.

Patrick Power, associate director, Financial Planning in HSBC Private Bank (UK) Specialist Tax Group, says: “The proposed new rules add yet another layer of complication to pension funding and the need for advice has never been greater.”

“We believe higher income individuals should at the very least make use of the special annual allowance, much in the same way that they should fund their annual ISA allowance and manage their capital gains tax allowance,” said Power. “Making pension contributions above the special annual allowance should not be ruled out.”

Pension changes take effect from April 6, 2011 and immediate forestalling measures were introduced in the Chancellor’s recent pre-Budget Report to prevent tax avoidance.

Who is affected by the new rules?

Those most affected are the wealthy with a ‘relevant income’ of more than £180,000 a year, who will no longer receive any higher rate income tax relief on pension contributions.

Those with a relevant income between £150,000 and £180,000 will lose 1% relief for every £1,000 of income above £150,000. These taxpayers currently receive 40% tax relief on pension contributions compared with the standard rate of 20%.

‘Relevant income’ includes unearned income such as dividends and interest, as well as earned income.

For those with relevant incomes of £130,000 or more, the Pre Budget Report of 9 December 2009 has further added the value of employer pension contributions to the ‘relevant income’ calculation.

Recent research shows that 500 wealthy directors and partners left the UK in the past year, and these numbers could rise following the new pension rules announcements as the wealth of many directors lays in their pensions rather than property and assets.

The estimate is more than 400,000 high earners are caught in the pensions and 50% super tax trap.

Pensioner John Petrie, 66, was one of almost 100,000 investors who lost money in the company’s £2.4 billion Pension Sterling Fund.

In January, the fund lost 5% of value that led to Standard Life compensating fund members with £100 million in February.

In November, the fund dropped another 0.5% but refused to pay compensation.

Mr Petrie took Standard Life to the small claims court in Milton Keynes, and at yesterday’s hearing the firm was ordered to pay more compensation, court fees and interest.

Judge Hickman pointed out that the marketing literature stating that the investment was 100% in cash without any ‘explicit mention’ of asset-backed securities until November 25, 2008.

He said: ‘I regret to say that I can accordingly place no reliance on what Standard Life tell me about what they made publicly known, and when, save where it is corroborated by contemporaneous documentary evidence.’

‘If Standard Life had made it clear that nearly half the fund was actually made up of asset-backed securities, what would have been the likely reaction of the average investor or indeed the average financial journalist?

‘I bear in mind that this was more than a year after the run on Northern Rock and the start of the U.S. sub-prime crisis.’

Judge Hickman concluded by criticising the firm for attempting to ‘frighten’ Mr Petrie with ‘hints of adverse orders for legal costs should he lose’.

‘Even if Mr Petrie’s case had failed, it was plainly arguable and one which it was reasonable for him to advance, and for large organisations to attempt to bully litigants in this way is unattractive,’ he said.

A Standard Life spokesman said: ‘While Standard Life was disappointed in the verdict, we have decided not to appeal and will abide by the court judgment, and have borne all costs in this case. We have no further comment to make.’

A small claims court ruling does not set a legal precedent. However, others can cite the case in similar actions against Standard Life that could cost up to another £10 million in compensation.

Sunday Times Rich List compiler Philip Beresford has analysed data from Companies House that shows more and more limited liability companies and partnerships are moving offshore.

The main beneficiaries are Jersey, Guernsey and the Isle of Man.

About 6,725 British businesses are based in the Channel Islands and 615 in the British Virgin Islands, and the number has increased by 500 in a year, says Beresford.

The main factors affecting the moves abroad are:

• Impending 50% tax for high earners from next April
• Increased National Insurance Contributions
• New restrictions on pension contributions

The tax advantages for companies and international workers are much lower taxes  - for instance Jersey has no capital gains tax, capital transfer tax or VAT.

Workers earning £90,000 may be hit by super tax

Guernsey-based Clydesdale Bank International believes that the number of wealthy people leaving from the UK could become an exodus when the reality of the 50% tax rate bites.

Clydesdale has calculated that not only are high earners picking up £150,000 an year in the tax net but also when taxable benefits like cars or loans are factored in, the 50% rate could affect taxpayers with a salary of £90,000.

“We have already started to see and hear of intermediaries as well as individuals looking to transfer capital to institutions, or work with structures here in Guernsey,” said James Blower, managing director of Clydesdale Bank International. “The knowledge that people earning less than the £150,000 threshold may also be liable for the full 50% tax rate could lead to even further enquiries. It may ultimately also mean a wider range of earners doing business in Guernsey.”

Income that will be subject to the 50% tax can come from various sources, such as salary, taxable profit from a trade, state or private pension, bank interest, share dividends, rental profit, and redundancy payments.

The rules are that if you leave after two years you are entitled to your contributions back - or if you have more than three months with the scheme, you can transfer them to another pension fund.

But - most schemes will close your account with the fund if the transfer is not made within six months of leaving the company.

So what if your contributions have been by salary sacrifice?

In this case, you have not made any contributions at all because salary sacrifice is paid in to your pension by your employer not you.

The net result of salary sacrifice is often that you accept a reduced income in favour of a payment in to your pension, which saves you and your employer national insurance contributions - but if you leave and request a return or transfer of the contributions, you will find that the cash belongs to the employer and not you and the repayment goes to them.

This is a salary sacrifice pitfall that most pension scheme members do not realise is awaiting them if they change jobs quickly.

What sounds like an excellent tax break at the outset actually adds up to a lesser salary for the time you are with the employer and no pension savings.

Expats and international workers should take independent tax and pension advice on salary sacrifice schemes. This pension pitfall can rob many well-intentioned pension savers of significant cash.

The six-month transfer rule is beneficial to employers, who can act to get their cash back, but employees unaware of the rules are in a much poorer position.

An alternative is to discuss a QROPS scheme with your pension advisor before agreeing a salary sacrifice if you are intending to become an expat or are an international worker leaving the UK.

Running the figures may show alternatives like taking the rather than accepting the lesser salary in lieu of pension contributions or other benefits is the better option.

For the first time, the Office Of National Statistics has compiled a picture of household wealth looking at asset values as an indicator of how well off people are rather than income.

If this is a case of history repeating itself, William the Conqueror’s famous original Doomsday Book was a census of the nation’s wealth for taxation.

The survey - compiled over the two years from 2006 -2008  - does not take in to account the affects of recession.

Nevertheless, the figures show that Britain’s estimated £9,000 billion of household wealth is mainly made up from property and pensions - each making up 20% each of the total.

They also show the wealthiest 10% own 44% of the assets, while the poorest 50% own just 9% of them.

The distribution of assets presents a completely different picture from the distribution of income.

The survey shows that as people age, the source of wealth changes.

The poor tend to spend and do not save, so have any wealth they have tied up in cars, electronic goods and household goods.

The middle aged have more valuable homes and the rich have cash in pensions.

Business holdings and future earnings, like the state pension are excluded from the calculations.

The surveys also showed those with a degree are more likely to end up wealthier than their peers who do not go to university.

Unsurprisingly, wealth is also split across the regions, with higher property prices in the southeast increasing the wealth of those who live there. The self-employed are also more likely to be well off than their employed counterparts.

Interestingly, as these figures have come available, the government has looked at taxing the pensions of the wealthy with new measures in the Chancellor Alastair Darling’s pre-Budget Report earlier this week.

The figures show the government is narrowing in their major tax initiatives on the top 400,00 or so earners who can afford to input more cash in to their pensions to increase their wealth.

The new rules only apply to those earning £130,000 or more - introducing another threshold into the higher rate income/pension equation.

Anyone earning over  £100,000 a year loses their personal tax allowance and then those earning more than £150,000 will pay 50% tax - both from the start of the next tax year.

Effective from now, anyone earning more than £130,000 is out of the salary sacrifice net - the change is expected to catch 150,000 earners.

‘Salary sacrifice’ is an agreement between an employer and employee to adjust salary in favour of increased pension contributions. The employee making the sacrifice gets tax and national insurance relief on the pension payments in return for making the sacrifice of taking less pay.

During his Pre-Budget Report speech, Darling said: “Under existing rules the highest earners benefit disproportionately from tax relief on pensions and at the moment a quarter of all the money spent on pension tax relief goes to the top 1.5% of earners.

“To make this fairer I announced in the Budget we would reduce pensions tax relief for people with incomes over £150,000.

“I want to do this as fairly as possible regardless if they receive pay as current salary or as a future pension benefit and prevent avoidance so I have decided to include employer pension contributions in the definition of income for this tax measure.

“But to provide certainty we will introduce a floor so that irrespective of the size of the employer pension contributions no one with an income below £130,000 will be affected.”

Skandia head of tax planning Colin Jelley said: “All the planning seems likely to focus around both the new £130,000 threshold as well as the previously announced £150,000. This added complexity will increase the need for those affected to get appropriate advice.”

As Jelley said, tax and pension planning for those earning more than £100,000 is becoming increasingly complex as the government zeroes on a relatively small sector to fund the tax shortfalls created by the recession.

The issue here is whether the move will actually raise any tax revenue as those earning over the £100,000 are those most easily able to pay for advice to restrict the tax they pay and whether the revenue raised will off set tax and national insurance lost by benefits paid to the increasing tally of the unemployed - and of course, the revenue the government is losing from their wage packets.

Tens of thousands of pensioners with cash stashed in special funds or bank accounts aimed at protecting them from low interest rates and vagaries of the stock market are watching their pensions drain away with the arrival of every account statement.

Standard Life has told 23,500 savers with £912 million in the company’s pension managed cash fund that the fund’s 1% annual administration charge is higher than the interest return.

SIPP losses to keep piling up until 2012

Standard Life is the UK’s largest SIPP provider and has warned savers to expect more losses until the end of 2011.

Other big losers, according to analysts Trustnet, are savers with Windsor Life, Nationwide’s deposit pension fund, Aviva and Woolwich.

One SIPP, run by James Hay, an Abbey Group company, pays interest of 0.00001% - just 1/100,000th of 1% - while charging an annual administration fee of £455. According to the MoneyMail, James Hay has stated no fund warning will be sent to savers.

Threadneedle UK Money Securities is staking up massive losses and acts for several pension firms - Axa savers using it have lost 12.4%, Legal and General 13.1% and Skandia 15.6%. The differing losses are because some pension firms charge more than others.

QROPS solution for non-UK pensioners

Many pensioners facing these losses are living outside the UK and can take a simple step to save money by transferring their funds in to an offshore pension called a QROPS.

QROPS allow more flexible investments in a low tax country and QROP holders have no requirement to buy an annuity, leaving a pension fund as an asset to pass down through an estate outside the grasp of the taxman for inheritance tax.

The Financial Services Authority has warned SIPP providers offering accelerated drawdown schemes face an inquiry if the products are suspected of being marketed, sold or used inappropriately.   

The warning revolves around an annuity avoidance plan that exploits a tax loophole.

UK pension rules say that pension holders must buy an annuity before they are aged 75 or pay a tax charge of 82% on their pension fund.

However, if a pension scheme member makes unauthorised withdrawals from the pension scheme, the tax penalty is 40% and the risk of a surcharge up to 15% - a total tax charge of 55%.

An unauthorised withdrawal is taking cash from a pension fund over and above what the scheme rules lays out as payable benefits.

An accelerated scheme allows unauthorised withdrawals of up to 25% of the fund value per year to empty the fund of cash before the deadline for buying an annuity - the pension firm deducts tax at source and hands the cash to HM Revenue and Customs and the scheme member can spend or reinvest the money he or she receives how they want.

This way, a pension scheme member can pass money from a pension to his family - and probably avoids inheritance tax with the help of intelligent estate planning.

The alternative is buying an annuity that dies with the pension scheme member.

The advantage is obvious with simplified math - if you have a pension pot of £1 million and draw the cash through an accelerated scheme, you lose £550,000 in tax. If you keep the cash in the pension fund and don’t buy an annuity, you lose £820,000.

In the first scenario, you keep £450,00 and in the second, £180,000

Only UK residents need to consider such schemes to avoid an annuity. Anyone with UK pension rights living overseas can transfer their pension in to a QROPS that gives the scheme member no obligation to buy an annuity and places the pension fund outside of his or her estate for inheritance tax purposes.

So here’s the inside information direct from HM Revenue and Customs on how to save tax on your pension benefits if you are a higher rate tax payer:

Who qualifies?

Any UK non-resident with UK pension rights who lives on the Isle of Man, Guernsey or Jersey.  Non-resident excludes anyone with dual nationality with the UK.

How do they make a tax saving?

The background is the UK and these three tax havens have negotiated new tax treaties during 2009 that mean anyone living on the islands paying UK tax at 40% and receiving UK pension benefits can apply to have their pensions paid without UK tax deducted rather than with tax deducted at 40% at source.

For Isle of Man, the option has been available since April 6, 2009, and for Jersey and Guernsey starts from April 6, 2010.

This means that expat retirees in these countries can opt to pay tax where they live instead of in the UK.

How much can they save?

From April 6, 2010, anyone earning over £150,000 loses their personal tax allowance and pays income tax at 50%.  If anyone in this position opted to take their pension gross instead of net of tax from the UK, their income tax would be:

• § Isle of Man - 18% - saving 22% taxes this year and up to 32% next
• § Jersey and Guernsey - 20% - saving between 20% and 30% income tax next year

What the taxman says

An HMRC spokesman told QROPS Advisor: “This is accurate. The UK will only exempt the pension payment from tax if the individual is resident in Jersey, Guernsey or the Isle of Man and also not resident in the UK for tax purposes, which means dual residents will not benefit.”

A QROPS is an even better tax saving solution

If you are UK non resident anywhere in the world including Jersey, Guernsey and the Isle of Man, and have UK pension rights but have not yet bought an annuity with your pension, you gain even more tax advantages by transferring your UK pension to a QROPs.

A QROPS negates any obligation to buy an annuity and allows your fund to be passed on when you die without inheritance tax problems.

A QROPS also pays benefits gross in many major currencies, so scheme members do not have to account for exchange control fluctuations.

In many cases, when the UK and overseas governments ratify the agreement, the TIEA amends arrangements over double taxation and means non-UK residents with UK pensions can apply to HM Revenue and Customs to have their pensions paid without the deduction of tax.

This can lead to substantial tax savings for 40% taxpayers who are looking at paying 50% tax from next April, if their new home is in a country that has lower rates of income tax.

The information has come to light in a statement from the Jersey financial authorities as a TIEA signed in July came in to force at the end of November.

So far, HMRC or any UK government spokesman has not mentioned the change that means reduces the pension tax take from expats.

Other TIEA agreements in force cover UK expats living in:

• Guernsey
• Isle of Man
• Bermuda
• Gibraltar
• Montserrat
• British Virgin Islands
• Netherland Antilles
• Aruba

The agreements are not necessarily the same for each country, so residents will have to check the treaty between their place of residence and the UK with local tax authorities and HMRC.

Alternatively, for more flexible benefits and other advantages, while reviewing expats reviewing their tax status should also consider transferring their cash in to a QROPS offshore pension scheme.

Jersey Comptroller of Income Tax Malcolm Campbell has confirmed that from April 6, 2010, UK pension holders can have their pension benefits paid gross instead of net of tax.

He said: “This arrangement could mean significant savings in terms of tax paid for some Jersey residents, who could have been paying 40% tax to HMRC on their pension and who may in future be subject to tax at 50%. The arrangement means that, subject to a claim being made and accepted by HMRC, Jersey residents will only be paying tax in Jersey, at a maximum rate of 20%, on their UK pension.

“The arrangement also affects residents of the UK who have been paying Jersey tax on their Jersey pensions. Under this arrangement UK residents will be able to apply to the comptroller to stop having Jersey tax deducted from their Jersey pensions and only pay tax in the United Kingdom.”

Following HM Revenue and Custom’s updated guidance highlighting investments policy for QROPS, several QROPS advisors seem to have landed clients with tax bills of up to 70% of the value of residential property holdings.

The problem arises from the QROPS advisor’s understanding of HMRC rules.

In several cases, it is believed a number of QROPS providers have had investment strategies written off by barristers who have advised that the rules allowed the funds to invest in residential property.

Now, HMRC has confirmed this is an incorrect interpretation of the rules.

Anyone considering investing in residential property via their QROPS should take advice from a UK regulated, independent financial advisor before opening their QROPS scheme or investing in the property.

If the QROPS advisor is regulated in the UK that means the individual or firm is governed by the rules of the Financial Services Authority and subject to a code of conduct and complaints procedure over the quality and accuracy of the advice.

Anyone with a QROPS holding residential property needs to review their tax status urgently to try and mitigate any penalties.

Residential property includes timeshares and fractional ownership properties that give the owners rights to stay for several weeks in the year.

Most large QROPS providers are believed not to have allowed residential property investments, but several QROPS schemes are known to promote it as a permissible asset.     

‘This really highlights the fact that any obvious manipulation of the clearly defined QROPS Provisions from HMRC can certainly be fraught with problems with often severe consequences. Independent and qualified QROPS advice is becoming more essential than ever’

Lots of advisors fail to explain these rules clearly.

Actually, QROPS Provider have open-ended responsibilities to report certain transactions after the five-tax-year period.

This means that scheme members who break QROPS rules can be subject to an unauthorised withdrawal charge from their fund - and the penalties are 40% tax on the withdrawal plus the taxman can impose up to a 15% surcharge as well.

No time limit on QROPS reporting

The two main problem areas for QROPS unauthorised withdrawals are:

• Transferring QROPS assets to another investment vehicle or trying to drawdown the whole fund as cash
• Investing in ‘taxable property’ after the five tax years are completed

Under either of these circumstances, the QROPS manager is obliged to report an unauthorised withdrawal to HMRC after the five-year period - and HMRC has placed no time limits on the reporting period.

These rules have come about because scheme members try and flout the QROPS investment rules by cashing in their scheme without paying any tax on the pension fund or try to buy assets with QROPS funds for their own benefit.

Investments that cause QROPS problems

Many QROPS investors do not realise that if they try to transfer QROPS fund on to another investment scheme, the fund manager can only agree to put the pension funds in another QROPS and must inform HMRC of the transfer.

This property would include any residential property, timeshare or fractional ownership investment that the scheme member was allowed to use.

Other investments that the scheme member may benefit from would be art, antiques, fine wines, classic cars or a yacht. This is not an exhaustive list but example of the most common investments that give a benefit to the pension holder.

The island will open for QROPS business once the Maltese Financial Services Authority has processed applications for retirement schemes under the state’s Special Funds (Regulation) Act to check the arrangements for the scheme meet HMRC rules.

Once the pension scheme has met the qualifying criteria of a QROPS and is recognised by the MFSA, the fund administrators can notify HMRC they meet QROPS rules and then file notification to HMRC for addition to the QROPS provider database.

Malta waits for transfer ‘green light’

When the schemes are added to QROPS database, UK pension funds will have the green light to initiate transfers to Maltese pension schemes.

A MFSA spokesman said: “This is a significant development for Malta indicating the strong reputation of the Maltese financial services industry coupled with the fact that Malta is an English speaking country, had already generated a lot of interest in this area.”

The spokesman added Maltese pension schemes were included in more than 50 of the country’s 50 double taxation agreements and were also recognised in all countries in the European Economic Area (EEA).

HRMC said schemes would be assessed on a case-by-case basis.

Gibraltar awaiting QROPS decision

Meanwhile, Gibraltar is still waiting for a decision from HMRC about status as a QROPS providing country in a disagreement about taxing QROPS benefits for the over 60s.

Gibraltar pension providers voluntarily stopped accepting QROPS transfer earlier this year in a bid to sort out the disagreement without causing tax problems for investors.

A new QROPS database list is due for publication this week, and HMRC is currently deciding whether Gibraltar should be included.

One Gibraltar life and pensions firm is trying to pressurise HMRC in to allowing Gibraltar to remain a QROPS jurisdiction by threatening legal action after taking advice from barristers.

Isle of Man based Zurich Life International is stopping life insurance sales to all but a handful of countries from Friday (December 4) following a ‘strategic business review’.

From the deadline, Zurich will only accept policy applications from customers who have permanent addresses in:

• Bahrain
• Jersey
• Guernsey
• Hong Kong
• Isle of Man
• Qatar
• Singapore
• Taiwan
• United Arab Emirates
• UK

All applications from these countries have to be introduced by a regulated intermediary qualified to give insurance advice.

Zurich will not accept any further business from any US or Japanese nationals regardless of their country of residence. Earlier this year, Zurich stopped writing business in many countries in the Far East, EC and Australia.

Regulation blamed for business decision

Zurich has written to advisors stating: “Zurich believes that the increasing complexity of regulation elsewhere requires resource which is no longer in proportion to the benefits derived from accepting business from these countries.”

Existing business written with Zurich is unaffected by the change of policy.

Zurich has reported a dramatic rise in protection sales so far this year, with business up by over 70% year on year at the end of August. 

A Zurich spokesperson said: “We are hopeful of achieving an 80% increase on total business written in 2008. A majority of our protection business is generated in the Middle East but we are working with our distributors to promote more protection sales in Hong Kong and Singapore.  

Zurich International Solutions employs almost 600 people in offices in the Isle of Man, Channel Islands, Hong Kong, London, Swindon, Luxembourg, the Middle East and Zurich.

The company’s head office in the Isle of Man employs around 350 people.

Zurich’s primary business is providing insurance-based solutions for expatriates and international investors, as well as employers looking for group benefits schemes for their international employees.

The company has more than 100,000 customers and assets under management exceeding US$4 billion.

The current offshore amnesty was due to end on Monday (November 30) and anyone earning interest on offshore cash that they have failed to disclose to HM Revenue and Customs faces tax penalties.

Now, the deadline is extended to January 4, 2010 with any outstanding tax payments due by March 12.

HMRC has details of 100,000 offshore accounts

HMRC had threatened preferential terms will not continue after that date.

An HMRC spokesman said: “The reason we have extended the deadline is to allow more time for banks to write to their customers. This is what they have told us they need.”

The New Disclosure Opportunity amnesty started on September 1, and under the amnesty, individuals with offshore accounts must pay all outstanding taxes and duties, interest and penalties plus a 10% penalty of the unpaid amount.

Account holders who do not come forward may be liable for 100% of the tax due as a penalty and could face a criminal investigation for tax evasion.

HMRC is seeking details of 100,000 accounts with around 20,000 having hidden assets. Over 300 banks and financial companies have handed over details about their customers’ accounts.

Amnesty take up may be disappointing

The Daily Telegraph reports that about 20 institutions are still refusing to co operate with HMRC demands for customer details and are appealing against having to surrender the information.

Figures from the TUC suggest that the UK economy loses £4 billion in uncollected tax a year through offshore tax havens.

The NDO is the second similar amnesty offered in the UK, but HMRC says that it will be the last.

The initial disclosure regime, which closed in 2007, raised £400m for the Treasury after 45,000 savers came forward.

However this time, it is rumoured the take up has been small - for example perhaps just 27 people with assets in Liechtenstein, that is part of another tax amnesty.

Many taxes are based on residence - like income tax and capital gains tax.

So if you leave the UK and live overseas the income you earn is subject to the tax rules of that nation.

Don’t ignore the domicile rules

Then there’s the ‘five year rule’ over CGT that generally means after five tax years absent from the UK, a taxpayer becomes non-resident and falls outside of the UK’s CGT rules.

Again, you become liable for CGT  - if it’s applicable - in the country where you live.

Most people have a false belief that this also applies to inheritance tax. But there’s a twist. IHT is based on domicile not residence and domicile is proved if:

• You are UK born
• Your father was UK born
• You have a British passport
• Keep a home or a burial plot in the UK

IF HM Revenue and Customs can prove one or more of the above and you have an estate overseas in excess of the IHT threshold, they can pursue your estate for 40% tax on the excess over the threshold - and often do.

QROPS can help minimise IHT

So even if you feel you have put your roots down overseas, unless you take in to account the effect of domicile on UK and foreign taxes, fleeing the country to save tax could come to nothing when you die.

Expert estate planning advice is clearly needed by wealthy expats whose estate will exceed the IHT threshold - currently standing at £325,000.

This is where a QROPS can help - because the fund in your offshore pension scheme is regarded as outside of your estate and as such is exempt from IHT.

Make sure your estate planning advice covers UK inheritance taxes as well as those in the country where you plan to settle.

Already hit by the new proposed super tax rate of 50% , now, a misunderstanding between the opposition and government has left the way open for the government to implement the ‘anti-forestalling’ tax on one-off pension contributions of 20% to stop high earners maximising pension contributions before April 2011.

The Tories withdrew proposed amendments to anti-forestalling in the Finance Bill believing the government would change the clause.

The Treasury has backtracked leaving those affected little time to assess their level of contributions for the current tax year.

Stephen Timms, financial secretary to the Treasury said the current measures were necessary to ensure ‘fiscal neutrality’.

He added that the extra tax revenues from high earners making annual pension contributions could offset some of the revenue it expected to lose as more people move to maximise their contributions up to £20,000 over the next few years.

The late rejection of the measures by the Treasury has given industry groups little or no time to propose an alternative before the Finance Bill is drafted.

Pressure groups representing insurers, pension funds and other financial groups, argue that self-employed people, who tend to make one-off annual contributions to their pension schemes once they have established their incomings, will be caught out by government plans to base the contributions history of a scheme member on monthly or quarterly contributions.

They wanted the government to amend the Finance Bill to allow the contributions history for self-employed people to be based on the highest two years contributions out of the last three years.

“Stephen Timms was making the point that the key issue was to maintain a fiscal neutrality,” said the chairman of the Association of Member Directed Pension Schemes, Robert Graves.

He added that the groups were frustrated at being told the government’s stance so late in the consultation process.

The bank has calculated the cost of retirement in the UK is about £400,000 and many Brits look to move abroad to cut the cost and have a higher standard of living.

Almost 90% (88%) of British expats already retire abroad - with France (18%) and Spain (12%) the most popular places in the sun.

Expats want to stay close to family and friends

The stumbling point for most retirees is staying close to families and friends in the UK that leads to 57% of Brits staying in Europe. 

Funding retirement comes from savings (27%), the state pension (23%) and private pensions (20%), says the ALIL study.

Property is also a key factor with 6% of expats relying on rental income entirely, another 6% planning to sell buy-to-let property and 2% looking to equity release.  Equity release may soon not be an option as yet another provider - The Prudential - pulled out of the market today.

Retirement destinations are chosen because they provide a better lifestyle (21%), better weather (20%) and a lower cost of living (14%).

Low cost flights part of the plan

Lynette Byrne, head of marketing at Alliance & Leicester International, said: “It is interesting to see that many UK expats have settled in their new home, with 88% of UK expats intending to retire abroad. 

“However, while some Expats might prefer life outside the UK, they are still very attached to friends and family thus settling in European destinations that are only a low cost flight away.

“This research really highlights the international nature of society today and raises some interesting questions as to how people are going to manage their finances and protect their savings against interest rate fluctuations.”

The Association of British Insurers and Association of Member Directed Pension Schemes have put together a joint ‘good practise’ guide for SIPPs providers that includes clearly laying out fund charges.

A SIPP is a self-invested pension plan - but the plan providers seem to be penalising investors who take out a SIPP to manage their own retirement funds.

This part of the guidelines has already exposed that many SIPP firms are forcing investors to put cash in to their own funds and penalising them if they prefer to use fund managers outside the scheme.

AEGON is channelling £416 million of SIPP investors’ cash every year in to the company’s own funds as a condition of holding an AEGON SIPP. The company has 138,600 SIPP plans contributing an average £3,000 a year to the insurance company’s coffers.

An AEGON spokesman said: “Regular premiums can only be paid into the insured element of our plan. The SIPPs market is made up largely of lump sum investments so that is what we currently support.”

Suffolk Life and Rowanmoor also penalise SIPP investors who choose unaffiliated investment managers. Suffolk Life charges up to £75 while Rowanmoor charges £50.

Suffolk Life marketing director John Moret says: “We have a data feed with a number of investment managers. Without this everything is paper-based which means extra cost and risk.”

John Moret has been outspoken in the press recently over the HMRC liquidation of Freedom SIPPs and the ability of small SIPP firms to manage their businesses.

Rowanmoor head of technical services Robert Graves says: “We charge £50 for investing with non-preferred investment partners to cover the additional work involved.” 

LV= has banked at least £18m by requiring all SIPPs investors to have a minimum £3,000 invested with the firm. LV= has over 6,000 SiPPs and £100 a year if clients choose to use an investment manager other than its five affiliates.

LV= head of pensions Ray Chinn said: “Because we are an insurance company, there has to be a contract of insurance within our plans and the £3,000 forms that contract. We are not quite as free as true SIPPs providers but it allows us to be more flexible in other areas such as not charging VAT on our SIPPs fees.”

ABI acting director general Maggie Craig said: “With SiPPs becoming an increasingly important part of the pensions landscape, it is vital that advisers and consumers fully understand what these contracts do, who they are appropriate for and how much they cost.

“This guidance will help to ensure that the product is understood better by customers and advisers and that it is targeted at those for whom it is an appropriate long-term savings vehicle.”

The technicality is causing a huge uproar in the offshore pensions sector and stopping transfers from UK pensions in to Gibraltar schemes as the firms have voluntarily put a stop on cash switches until the matter is sorted.

Both sides could easily put an end to the matter by agreeing to disagree and saving face - either by Gibraltar changing their tax stance or HMRC accepting a zero rate is still a tax.

After all, HMRC imposes a zero rate VAT tax in the UK - but the taxman obviously fears ruling in favour of Gibraltar will lead to other infringements of their QROPS rules.

Rather than report the hype, here are the facts behind the row:

At the root of the row is money. Pension providers in Gibraltar want to set themselves up as a rival financial centre to Guernsey and the Isle of Man by attracting fund transfers from people with UK pension rights.

People who can transfer their funds include British expats living permanently abroad and foreign workers who have built UK pension rights but live abroad.

The attractions of a QROPS for these groups are the pension scheme has tax advantages and other benefits that are not allowed for UK pensions.

People in these groups can transfer their pension funds in to a QROPS - a Qualifying Recognised Offshore Pension Scheme - providing the scheme meets some special rules.

These rules include one stating that a QROPS pension must be recognised for tax - which means them benefits should be liable to tax.

The QROPS in Gibraltar are subject to a 0% income tax rate for the over 60s.

• HMRC claims this means the Gibraltar QROPS flout the rules because they are not subject to tax because of the 0% rate.
• The Gibraltar pension providers claim their QROPS benefits are taxed but ay a zero rate.

Both sides have spent six months writing letters to each other arguing their point without making any process.

Now, the Gibraltar pension firms are piling the pressure on HMRC by threatening legal action if the taxman pulls the plug on QROPS transfers.

A decision is expected from HMRC by the end of the month.

Several QROPS providers on the Rock have voluntarily suspended transfers in to their schemes while negotiating with HM Revenue and Customs over the taxman’s interpretation that Gibraltar’s 0% rate of income tax for the over 60’s as a contravention of QROPS rules.

A QROPS - Qualifying Recognised Overseas Pension Scheme - is an offshore pension with tax benefits and flexible investment advantages for people with UK pension rights who now permanently live abroad.

London & Colonial Assurance, a pensions and investment company that does not market a QROPS, is threatening legal action against HMRC and claims two barristers have confirmed HMRC stance is wrong and doubt the EU would back the UK claim.

HMRC is expected to confirm whether Gibraltar will stay on the QROPS list of tax jurisdictions by the end of the month.

Meanwhile, the taxman has made no comment about Gibraltar and refers anyone considering a QROPS transfer to a Gibraltar fund to take independent financial advice.

London & Colonial has just launched a new Gibraltar based SIPP, widely seen as a workaround to take up the slack if Gibraltar is not allowed to offer QROPS schemes.

Currently, Gibraltar providers are on the list of schemes that have notified HMRC that their QROPS meet guidelines - but to join the list a scheme merely has to file notification the QROPS meets the guidelines and HMRC does not verify or approve any notification.

London & Colonial chief executive Ken Wrench said: “It is frustrating that on this matter HMRC will not meet with anybody or explain let alone discuss their objectives.

“One wonders if there is some hidden agenda. Whatever tax is or is not paid by Gibraltar residents will make no difference to the tax paid to HMRC by QROPS members who are UK resident.  If it is simply their interpretation of the letter of the regulations then it is about time either that they agree that a favourable interpretation is acceptable or that the regulations were changed.”

The speech is expected to include details of the Financial Services Bill aimed to give the Financial Services Authority more power over organisations outside its remit - like hedge funds.

The Fiscal responsibility Bill is also on the Queen’s script - that is legislation designed to tackle the UK’s debt problems.

None of the proposed legislation appears to say anything new about QROPS or offshore pension schemes.

Critics point out that few of the bills listed in the speech are likely to become law as Parliament has about 70 days of business before the next election, which is nowhere near enough time to enact all the expected proposed legislation.

Since the start of the recession the FSA has accrued more and more powers and now might have the authority to stop “reckless” payments and to cancel salary packages that might reward undue risk-taking.

Reports have also suggested responsibility for “financial stability” in the UK economy will be transferred from the Bank of England to the FSA.

However, the bill will also include the FSA’s new regulations covering banks, which were unveiled in August.

Under the code - due to take effect from January - bonuses should not be guaranteed for more than a year.

The allegation against Gordon Brown is the government is using the Queens’s Speech to put forward an election manifesto, knowing that the Parliament will not have time to properly debate the issues.

But, the government is hoping this will draw the Conservatives on policy by forcing David Cameron in to making a stand now on financial policy.

So what should investors make of the speech? Good advice would be to take it with a pinch of salt but bear in mind that the recession aftershock is going to be with us for a good while yet - at least until the next government has had time to enact new policies.

This probably means the economy will tread water.

For expats, the answer is simple - if you have investments, savings or pension rights in the UK, talk to your financial advisor about moving them sooner rather than later.

That means reviewing your current retirement strategy and seeing if a QROPS is a more tax-effective and flexible retirement plan  - which it probably is.

The problem is selecting the right advisor to suit your personal financial circumstances.

UK retirement options are not necessarily the best for clients who have connections with another country or who might retire to another country.

Warning bells should go off if your advisor does not cover whether you have any connection with another country - like:

• You are a non-UK national
• Holding a UK and overseas passport
• You are married to a partner from another country
• You have the right to live in another country
• Intending to move permanently to another country

If you highlight one or more of these points, your advisor should discuss a QROPS (Qualifying Recognised Overseas Pension Scheme) as part of your retirement and inheritance tax planning as a QROPS is a cornerstone for both for anyone moving abroad who has UK pension rights.

Even if you and your advisor consider a QROPS is not the best option for you, the product should still form part of the discussion.

To protect yourself, take independent advice from a UK regulated professional with knowledge of QROPS.

UK regulation is important because Financial Service Authority guidelines to advisors say they must ‘know their client’ to give best advice.

Asking about any overseas connections and considering how this affects tax and financial advice is an intrinsic part of this getting to know you process.

A specialist advisor is best because they have experience and contacts in the market because they deal with QROPS every day, when a high street advisor may only come across offshore pension schemes every now and then.

The trouble is residency laws are complex and sometimes people think they have left the UK when really they are still resident, so all the cost and time spent carefully planning tax advantages go to waste.

An ongoing case in British courts between a British Airways pilot and HM Revenue and Customs highlights the point.

Lyle Dicker Grace is a British Airways long-haul pilot. He is South African by birth but lived in the UK for 10 years until 1997 when he moved back to Cape Town.

The issue is that the rule-of-thumb over non-residency is being absent from the UK for the next five tax years but Mr Grace continued to fly out of Gatwick and had a second home near the airport where he stayed while in the UK.

HMRC argue that the house available for his use in the UK means he has not broken all residency ties and makes him a UK resident for tax.

The argument has gone backwards and forwards on appeals between Mr Grace and HMRC for the past couple of years - with the latest ruling by the Court of Appeal.

The court agreed with a decision by High Court Judge Lewison that Mr Grace was UK resident for tax and that the tax commissioner made a mistake when ruling he wasn’t in 2008.

However, it also ruled that Lewison should not have simply reversed the tax commissioner’s decision but should have referred the matter back to her for re-determination. (Grace v Commissioners for HM Revenue and Customs, EWCA Civ 1082).

The moral of Mr Grace’s story is that if he had sold his house and stayed in a hotel when he returned the UK, HMRC would not have investigated his case, as they would have considered he had severed all ties with this country and was no longer resident for tax.

Certainly anyone leaving the UK permanently should take solid professional tax advice because so many small and seemingly irrelevant factors can make a huge difference to tax status.

The trouble is SIPPs are not a well-engineered pension product but a mismatch of bits of this and bits of that which can seriously damage your retirement prospects.

The SIPP market is in a state of flux.

• One company, Freedom SIPP, has just folded for not paying tax bills.
• Interest returns on cash savings held in the plan are minimal because fund managers are raking in commission and hidden charges, according to a survey by savings bank Investec.
• Some assets in a SIPP may hot have any financial protection - especially if the SIPP is managed by a trust

If you have a SIPP, now would seem a good as time as any to lift the bonnet and see how well the pension is performing.

The basics that should be in place are online functionality for showing fund assets and current market values. Managing the SIPP should be easy online - like transferring funds and paying in cash.

One criticism of SIPPs is transparent fee scales and add-on charges for extra services for changing funds, paying in additional contributions and other basics that should be included in the price. Average annual fees for a SIPP are around the £500 mark - if you are paying more perhaps you should ask why.

One of the problems with SIPPs is trustees and managers try to keep costs down by cutting customer service that results in long telephone waits to find out information, no continuity in dealing with issues as different customer advisors answer the calls and delays in implementing decisions.

If you have a SIPP and suffer from any of these problems, then perhaps you should consider voting with your feet and looking at the options.

Certainly if you are living or retiring overseas a QROPS is an alternative scheme that has more tax benefits than a SIPPs and rids the investor of the requirement to invest in an annuity.

If you need help rating your SIPP, financial data group defaqto (link: http://www.defaqto.com/star-ratings/sipps) have already done the hard work and given star ratings to a wide range of plans.

One in four (26%) SiPP and SSAS schemes only pick up interest at bank base rate of 0.5% and many others are offered less than 1%, according to research by Investec.

Fund managers are refusing to let investors move their cash because banks pay a commission for the fund placing money on deposit with them, says Investec.

‘We do an annual survey of returns paid for cash on deposit in SIPPs and our research confirms Investec’s findings - most SIPP providers pay less than 1%,’ says Geordie Clarke, of Money Management magazine.

The magazine is publishing a comprehensive survey of SIPP returns for cash on deposit in the edition for January 2010.

‘The problem is that most SIPP managers do not allow investors to choose their deposit taker.  Our last survey revealed that only Mattioli Woods gave investors any choice.  Many providers are very cagey about disclosing what they pay and will only say that it is linked to base rate,’ he said.

Independent experts feel this is a matter the Financial Services Authority should investigate - and advise SIPP and SSAS investors to check out the small print of their pension schedule if they cannot control their own money or move to another scheme - like a QROPS if you qualify as a UK non-resident.

So how much money are SIPP and SSAS investors losing in this time of low interest rates on savings?

For instance, Investec pays 2.5% gross on balances of £100,000 with a minimum investment of £25,000. Higher rates are available through some offshore banking arrangements with a QROPS - and most QROPS schemes do not pay tax on their gains.

If you have a SIPP or SSAS and believe you are in charge of your own financial destiny - ring up the fund manager and tell him you want to move any cash you have on deposit to another account and listen to the resounding ‘no’.

If you have a SIPP or SSAS and now live overseas, you are entitled to move to a QROPS and benefit from the massive amounts of features.

Some simple financial moves can save expats a fortune when moving abroad - but they are often forgotten in the hustle and bustle of moving to a new country.

So here are some simple tips on how to save cash when moving overseas:

• Don’t forget to file a P85 tax form with HM Revenue and Customs as soon as you leave the UK - this is a declaration of residence for tax purposes and means you can save tax on savings earlier
• Open an offshore bank account as soon as possible to limit currency fluctuations eroding your spending power on income and savings
• Look in to transferring any UK pensions in to a QROPS scheme - this gives tremendous additional investments opportunities and tax benefits to expats.

With a QROPS, your pension can grow in a low rate tax jurisdiction like the Isle of Man or Channel Islands while you can move wherever you like in the world outside the UK

• If you can afford to, leave your state pension paying in to a UK bank account as spending money when you return home, so the spending power is maintained and as another hedge against currency fluctuations.

The currencies to consider hedging Sterling against when moving abroad are the Euro, US Dollar and Australian Dollar.

Government statistics show the most popular places for expats to move to are France (16%), Spain (10%), USA (8%) and Australia.

Figures show emigration trends among particular age groups.

Australia is the most popular place to live for the 16 to 35,yeards old age group (33%).

Pensioners favour Canada (12%) as their ideal overseas destination, just ahead of Australia, New Zealand and Spain - all at 10%.

According to Halifax International, 4% of British expats own overseas homes with about a quarter (27%) saying they want to buy or move abroad. Nearly a third (32%) of Britons considering the move are aged below 35 years old and more than two-fifths (41%) of those who have made the move said they have no intention of returning home.

An estimated 5.5 million Britons live abroad according to research, with 400,000 leaving the UK in the last year alone.

About 70% of people consider themselves as ethical or fairly green or ethical but only 8% of investors have green investments, according to a government survey.

To encourage more investors to take up an ethical strategy, this week is National Ethical Investment Week aimed at getting people to think more about how they invest ahead of the upcoming Copenhagen Summit on climate change.

British expats or anyone that has worked here that has UK pension rights can take the chance to review their green credentials if they transfer their UK pensions in to a QROPS.

The objective is making money and reducing your carbon footprint from ensuring the funds in a QROPS are helping the planet. This is a big challenge for advisors, but with the broader range of investments, currencies and opportunities available with a QROPS, everyone has a responsibility to do what they can to make an ethical choice about how to invest their money.

The principle is simple; you work out your carbon output for a year using the online calculator at http://carboncalculator.direct.gov.uk/index.html 

Next you can choose between two popular carbon offset schemes -

Buying in to a tropical rainforest by investing in a hardwood stand that ‘breathes in’ the same amount or more of carbon you output.  The advantage here is that as the stand matures, you can harvest the timber and sell it on while replanting, so your forest investment is sustainable timber.

As an example, an investment of £12,000 would more than offset a family’s carbon output and could produce a six-figure return in 10 -15 years.

The second option is carbon offset trading, which is similar to buying and selling stocks and shares. Your QROPS fund buys excess carbon offsets from individuals or organisations that have more ethical investments than they need to set off their own carbon outputs and then sell them on to other s who need to buy in more.

Other ethical investment choices are available - like green funds and directly buying shares in companies involved in reducing carbon output.

Current rules say migrants must have skills that are in demand - like doctors or engineers.

New rules have dropped this criterion to allow expats with significant cash to gain immediate residency under two categories:

• Emigrants with £4 million to invest over three years with no business or age restrictions who spend a minimum of 73 days a year in New Zealand
• Emigrants with £658,000 to invest over three years with three years of business experience and are less than 65-years-old who spend 146 days a year minimum in New Zealand.

Expats on an investor visa will have opportunities to invest in a wide range of bonds, equities and managed funds.

For expats with UK pension rights, New Zealand also has providers with QROPS offshore pension schemes that give tax advantages.

Announcing the investor visa, immigration minister Dr Jonathan Coleman, said:  “The last government’s business migration policies have not attracted investment. Since 2007, there have only been 23 migrants bought to New Zealand through Labour’s business migration policy.”

“Business migration needs to be urgently addressed, and stakeholders’ feedback has been extremely positive regarding this new package,” said Dr Coleman.

This failure to attract emigrants has been blamed on the previous policy setting the investment qualification bar to high - at £1 million - £8.75 million.

UK Immigration New Zealand regional manager Andrew Lockhart said: “It provides opportunities for people to invest in New Zealand and brings skills they might have in terms of investment into the country.”

Immigration New Zealand said new Zealand is more than a ‘large farm’ but also has strong technology and media sectors - with the added benefit of free trade agreements with Australia, Singapore and China that make New Zealand a gateway to Asia for business.

New Zealand is seen as a nation emerging from recession with a tiny 0.1% GDP growth in the last quarter.

Fixed incomes are under a two-pronged attack - poor returns as dividends and interest rates are cut and those earning £150,000 a year or more facing 50% income tax.

Many are looking to increase their spending power by retiring abroad and taking their pensions and investments with them to benefit from paying lower taxes.

Investment advisors have stacks of wealth planning strategies  - but the real answer is seeking a tailored plan that suits your personal needs from a UK regulated independent financial advisor.

Many people see avoiding income tax on savings and investments, as the primary way of increasing income, but this is not necessarily the only way.

Looking at the value of assets as capital gains is also an excellent way of tax planning.

For many people retiring abroad, a QROPS is seen as the financial solution because of the income tax benefits. But many advisors and expats forget to consider that after leaving the country permanently, they can sell their assets held here without incurring any capital gains tax - although they need to watch the tax issues in the country where they are now resident.

Another tax advantage of a QROPS is avoiding inheritance tax. The nature of the investment excludes any assets held in a QROPS outside your estate for IHT purposes.

Certainly income tax on the fund growth and your withdrawals from the QROPS are important - but don’t forget the other benefits of being an expat with a QROPS as assets in the UK can be sold without triggering CGT and converted in to cash that is then outside the realms of IHT when invested via QROPS.

This is why a one-scheme-fits-all advisor is not suitable for investors with complex financial affairs. For such complicated tax and financial; issues, you need a ‘whole of the market’ advisor who can draw up a bespoke plan.

The US Pension Benefit Guaranty Corp has tied in with the Pensions regulator, that oversees UK defined benefits pension schemes, and the Pension Protection Fund, that pays compensation to pensioners if an employer’s scheme goes bust.

Under the agreement, the each regulator has access to data, intelligence, and other records except confidential financial information relating to companies running pension schemes.

Pension Protection Fund chairman Lawrence Churchill said the agreement “sends a clear signal that there is a high level of co-operation between the various national institutions charged with protecting retirement incomes in an era when many sponsoring employers have a global presence.”

The object of the pact is to monitor multinational company pension funds so regulators in the US and UK do not have to pay out compensation to pensions if company assets have been transferred leading to a shortfall in funds.

A second aim is stopping tax avoidance as the UK regulators and US regulator have the benefit of tax information sharing treaties with numerous countries - for instance, the US regulator has recently signed such a treaty with Swiss tax authorities to share information and intelligence that will now be available to UK regulators.

Governments are sending a clear message to companies and individuals that the days of tax evasion are numbered and that the system is progressively tightening to capture tax cheats.

“We are not trying to make a treaty,” said PBGC Acting Director Vincent Snowbarger. “We’re trying to layout our understanding of the kind of information that we both feel comfortable in providing one another.”

Snowbarger said the agencies want to be “cautious about how much we are perceived to have locked ourselves into some kind of agreement that would be objectionable” to US other agencies and what businesses might perceive this as being.

Other US agencies, such as the Commodity Futures Trading Commission and Securities and Exchange Commission, have also linked with other international regulators.

The problem is every time pension payouts stop in a bank they incur charges - like transfer fees and currency exchange costs.

If the retirees had shifted their money in to a QROPS that can pay out in local currencies, they could save money.

Currency exchange firm HiFX reckon that pensioners living abroad drawing the state pension pay about £300 in bank charges and have lost 30% of their purchasing power in France, Spain and Italy against the Euro due to currency fluctuations.

This means their pension is worth £50 less now than in July.

The state pension is an example - but most many expats retiring to a place in the sun have private pensions as well and the same currency fluctuations and bank charges are devaluing their spending power too.

If you are considering retiring overseas, then take advice now from a UK regulated independent financial advisor with experience in QROPS - a short name for Qualifying Recognised Overseas Pension Schemes.

The advantage of a QROPS is funds can be invested in Euros, US Dollars and many other currencies and can be paid directly in to an offshore bank account,

That eliminates a lot of the fees that eat in to the pension payments and leaves the saver with more cash in their pockets than if the pension was left in the UK and had to pass through several financial hops to reach wherever they live - with each hop attracting a bank charge.

Little can be done to help save fees on the state pension if this is an important part of your monthly finances, as a state pension cannot be transferred in to a QROPS.

If it is not a vital part of your income and you regularly spend time in the UK visiting family and friends although your permanent home is now abroad, you could consider leaving the state pension cash in a UK bank account for spending when you come home.

Leaving the money in the UK if you don’t need it makes sense, as your pension will not incur charges moving between banks nor on currency exchange.

Dave Hartnett, permanent secretary for tax at HMRC has posted a two-minute video on YouTube (Link: http://www.youtube.com/watch?v=a7qb8Y8RvE0) urging tax dodgers to face up to their responsibilities.

This is the latest move in the HMRC strategy to track down UK residents with offshore bank accounts that pay interest on savings that is not declared on tax returns.

HMRC agrees having money offshore is not illegal - but earning interest and not paying tax on what is received is and is costing the government about  £0.5 billion a year in lost tax.

“For some people, offshore bank accounts and tax havens typically conjure up images of exotic and far away places, well out of the reach of the taxman at home,” Mr Hartnett says in the video.

“Well, life’s just not like that any more. The taxman now has more powers and more information.”

UK taxpayers with money in offshore accounts run by 300 UK and foreign banks are offered the chance to confess to hiding taxable income by November 30, 2009.

Hartnett says in the video that the warning is “not a hollow threat” and that taxpayers who fail to come forward and are found to have undeclared tax liabilities will face a fine of at between 30% and 100% of any unpaid tax plus they will still have to pay the tax due.

Taxpayers who come forward before the deadline will have their penalty capped at 10% of the unpaid tax, or 20% if they failed to declare during the first disclosure campaign that ended in 2007.

Many of these will have UK pension rights and may have pension funds languishing back in Britain.

If you are considering moving to the other side of the world, then think about what to do about your pension as well.

The problem is that once you have migrated to Australia, if you have a large UK pension fund, it may exceed the annual pension capped limit to Australia.

Most people looking to move to Australia should take professional, independent QROPS advice before they leave the UK to see if they need to find a home for their pension offshore to both countries.

Transferring a pension to Australia has several different solutions that are often dependent on the amount of money available to transfer from UK pension funds.

Often the best bet is to transfer the UK pension funds in to a QROPS based in the Channel Islands or Isle of Man.

Sometimes a staggered transfer over a number of pension years is a good way of avoiding the cap problem.

Lots of other confusion exists about transfers to Australian pension providers - one of the main myths is the transfer has to be completed within six months of permanent arrival in the country otherwise the fund will be taxed at 50%, which is not true.

The fact is the Australian tax authorities could charge tax against any growth in the fund in that period, but the tax rate is certainly nowhere near 50% and often leaving the fund in UK Sterling is advantageous to switching to another currency at the wrong time.

If you are considering emigrating to Australia and want to know how to manage your UK pension, you need an n experienced and qualified advisor to give the best advice.

That’s why checking out your options with a regulated UK advisor is imperative to make sure you take the right steps at the right time to protect your pension investments.

Anyone can Google ‘QROPS’ and come back with 78,000 search responses in 0.27 seconds.

Now the problem is sorting the relevant information about a QROPS - a Qualifying Recognised Overseas Pension Scheme - from the irrelevant.

Out on the web are a huge number of experts offering good, bad and ugly advice - but how does someone without any financial training tell the difference?

The questions you need to ask yourself before acting on financial advice are:

• Does the Financial Services Authority regulate your advisor in the UK?
• Is your advisor qualified and experienced in arranging QROPS transfers?
• Can the advisor give whole of the market advice or are they tied to products offered by a limited number of providers?

Satisfactory answers to these three questions at least ensure you are dealing with an advisor that should have a level of knowledge to give ‘best advice’ about a QROPS.

Next, you need to look at who is managing your money. With most QROPS, come three options:

• DIY fund management
• Working with fund manager to make joint decisions
• Letting your fund manager make all the investment decisions

Trust and performance are the issues here. If you have substantial investments in complex financial products, you probably don’t have the time or inclination to manage the funds yourself.

So you need to have confidence in the fund manager’s track judgement - but making this decision is not easy as people move jobs and financial companies consolidate after the recession.

Age is also a consideration. An older fund manager probably has been through recession before and has a set of tried and tested skills to rely on, but is that approach now dated and unlikely to pump up the profits on your investments. On the other hand, a younger fund manager may have different attitudes towards investing in a downturn.

How to manage funds has no real answer. The truth is no one can predict the future and all you can do is make sensible investment decisions based on … well, if we knew the answer, we’d all be rich!

Many people who have worked hard and contributed to company pensions all their lives are unsure of how much money they will have to live on.

Add to that the debate about how retirement ages may change in the future and the concept of a rosy retirement is not quite what most people have worked towards.

One way to sidestep all this pension grief if you are considering moving abroad permanently is transferring your pension to a QROPS. A QROPS is a specialised financial product that has many tax advantages for retirees living overseas who have UK pension rights.

If you have already purchased an annuity or are drawing down from an employer’s final salary scheme, then the QROPS door is closed.

For everyone else, the door is open, including those who are taking benefits from a pension as a drawdown or unsecured pension.

Consolidating all your UK pension funds in to a QROPS allows the investor to put their retirement savings outside the UK pension systems, immediately removing the uncertainty surrounding your pension in this country.

Your UK state pension has to stay outside the scheme, but you can move your other funds offshore to a more tax friendly environment and have no restriction where you live outside the UK - so your pension can be based in a good investment jurisdiction while you can live where you please.

Rather than ask your pension scheme provider about a QROPS transfer, approach a regulated and experienced independent financial advisor as many small scheme trustees and administrators have given wrong advice to pension holders in the past about their ability to transfer to a QROPS.

A QROPS is a highly specialist financial product and to protect your money and your retirement plans, always make sure the advisor can give ‘whole of the market’ advice and has a track-record in successfully completing QROPS transfers.

Another QROPS bonus is investments and payments inside a QROPS can be in many currencies, so your living standards overseas are not dependent on the fluctuation of the Pound against other major currencies that removes another uncertainty for many who want to retire abroad but have a tight budget.

As anyone who has had a brush with the French equivalent of HM Revenue and Customs knows, the tax system is devilishly complex.

This is a throwback to the 19^th century and how the laws in both countries developed down different routes.

One of the main issues is a hugely different interpretation of how your estate is handled once you pass on and how the assets you have built up are taxed.

The good news is with the help of an independent financial advisor with expatriate experience and estate planning, you can minimise your inheritance tax in both countries.

In France, on your death all your assets are totalled - that’s property, belongings and investments and tax paid on the whole amount.

In France, one of the key tax saving products is Assurance Vie - which translates in to something similar to an investment bond in UK financial services.

If you arrange Assurance Vie before you leave the UK, as a non-French resident the advantages are:

• No CSG tax on French Assurance Vie investments
• No IHT on any assets wrapped in the Assurance Vie

Another tax advantage is that Assurance Vie has no caps on assets or savings held in the policy.

The tax rules apply to expatriates intending to move to France permanently and to UK residents who own and let out property in France.

If you are considering retiring to France, the policy has to be started before you are aged 70 years to benefit from the tax advantages.

The tax saving benefits of Assurance Vie are advantageous if your inheritors are not direct related - because it wipes out tax that can be charged at up to 60% of the amount transferred on your death.

As with all financial advice, make sure you speak to a UK regulated independent financial advisor who has experience in dealing with the affairs of expats to ensure you receive the best advice and have some come-back, on the advisor if your financial plans go wrong.

QROPS - a qualifying recognised overseas pension scheme - is regarded as an excellent investment strategy for savers with UK pension rights who permanently live overseas and do not plan to return to the UK.

Points to watch when your IFA recommends a QROPS is that he or she have experience in advising on the products - and ask for evidence or references if you are not sure.

Charges are another area to keep an eye. Many of the largest QROPS advisors have their fees subsidised by the providers themselves, so their services come at little or no cost to an investor.

Check out the ongoing management fees and charges - in most cases if you want to change funds or methods of investment once the QROPS is up and running, many providers allow this free-of-charge, but this is another area where unscrupulous IFAs can take a chance to earn more cash unnecessarily.

None of these problems should arise if you consult a UK Financial Services Authority regulated independent financial advisor who can tailor the best QROPS scheme for you from across the whole of the market.

After all, it doesn’t make sense not to take the best advice and swim with the sharks when sums involved in a QROPS are generally quite significant.

Many retired people receive income from several different sources and are entitled to extra allowances that makes working out how much tax they pay more complicated than working out the amount for younger people, said the NAO.

This means up to 1.5 million pensioners have on average overpaid £171 each - that adds up to a massive £250m million more in the tax office bank accounts than should be there.

Yet another 500,000 had underpaid tax by £100 million because of failures in HMRC systems and differences between HMRC calculations and those of employers and pension providers.

Amyas Morse, head of the National Audit Office, said: “Older people want to pay the right amount of tax but too many pay more than they need to because they do not claim allowances to which they are entitled and because of errors.

“By providing a more coherent service, HMRC could make substantial savings as the number of enquiries from older people about their tax affairs would reduce. A win-win situation for all.”

If all older people claimed age-related allowances to which they are entitled, their average income would go up by 4% each, the NAO indicated.

New HMRC IT systems have been installed to reduce the errors, but the NAO warned that with an aging population, if HMRC does not get on top of the problem, it would only get worse.

The NAO also discovered that older people are less likely to contact their tax office than anyone else and about a third do not understand income tax or allowances they can claim.

The costs of dealing with tax inquiries from older people are £36 million just on staff - and these inquiries cost twice as much to deal with than other inquiries as they are more complicated to deal with.

The global economy is in a state of flux as the larger economic powers pressurise former tax havens in to lifting their curtain of secrecy for wealthy individuals, companies and financial organisations.

Countries that were popular a year ago are now looking at little rocky as long-term homes for your money - like the Cayman Islands, British Virgin Islands and other Caribbean financial hotspots.

HM Revenue and Customs has drawn a line - tax evasion anywhere will not be tolerated and action will be taken against those involved.

HMRC also hints that a continuous review of QROPS tax jurisdictions rolls on.

Last year, the QROPS status of providers in Singapore was withdrawn due to tax irregularities and the rock of Gibraltar does not look so solid at the moment.

Talks continue between HMRC and the local QROPS providers and tax authorities about income tax band irregularities that have led providers based there to hold off transferring any funds in to QROPS schemes.

QROPS provider representatives in Gibraltar were confident that the issue would be sorted out by the end of September - now we are pushing the end of October and still no news.

So where do you go to keep your money safe and secure?

The most popular QROPS countries are currently Guernsey, the Isle of Man, Jersey and New Zealand.

Of course, they all have a British connection in common that makes UK investors feel a little more confident, but then so do Singapore and Gibraltar.

A low tax environment comes high on that list when looking for a home for a QROPS - Guernsey compares well with the Isle of Man with 0% inheritance tax and 0% income tax comparing favourably with the Isle of Man’s 7.5% IHT and 18% income tax rates.

Making a decision with the whole of the world to choose from can be daunting, so perhaps the first and most important step in stetting up your QROPS is selecting an independent, professional QROPS advisor who can cut their way through the sales pitch to tailor a product that matches your needs.

Unlike a UK pension, QROPS investors can invest in almost any tradable paper or commodity in any currency - but often widening the choice increases the risk of putting cash in the wrong place.

Like all investment advice, the first good tip is don’t put all your eggs in one basket, because if you drop it the likelihood is they’ll smash and you’ll be left with nothing.

During a recession, investors are inevitably looking for a safe haven giving prospects of reasonable growth.

Emerging markets - like the BRIC economies of Brazil, Russia, India and China are generally the first stop for most investors.  Each of the BRICS has its own financial problems, and is looking at how to create a second global currency to untie the knots between their economies and the US dollar.

China has special problems - the economy has slowed in the recession but the economy relies on exports and until the US and European economies recover, some doubts exist about just how long the economy can keep expanding with the bubble bursting.

Brazil is an interesting market - a massive oil and gas field has just been discovered offshore that makes the oil-dependent economy of neighbouring Venezuela suddenly look like a tiddler in a big pond full of sharks despite being a top 10 world oil producer.

Single commodity reliance has problems - as the oil-rich nations of the Middle East have discovered.

Eastern Europe’s new boys in the European Union are also having problems. Lack of infrastructure and a state-control mentality have held some economies like the Baltic States back.

Then there’s debt and currencies.  Possibly many investors would rather stack their cash under the bed than buy in to economies and currencies in trillions of debt.

The advantage of a QROPS is you can hire a fund manager to keep up with global investments for you.  With a QROPS, the investment possibilities may be endless but perhaps keeping your money safe is better than being sorry after making a rash investment decision.

The banks have actually done quite well in the war so far -

• Billions of pounds of cash poured in to the banks to bail them out of debt problems are on deposit at the Bank of England earning interest
• The fat cats are still hoping for their bonus pay outs with figures like £5 million going to some top earners at the Royal Bank of Scotland - part taxpayer owned and the bank that chalked up the biggest UK trading loss ever.
• Quietly and slowly over the past year, margins have widened - the difference between the cost of borrowed money and the cost banks charge for lending the same cash out -so despite low interest rates, mortgages and loans cost more.

The coup de grace is tax losses. The Royal Bank of Scotland and other bailed out banks have racked up so much in tax losses that they will have to make billions in profits before they start contributing corporation tax in to Government coffers.

The reason is that businesses can carry forward losses indefinitely as long as they are set off against the first available profits.

So, if a business like the Royal Bank of Scotland loses £24 billion and is bailed out by the taxpayer, the cash going in is not income but investment, so is not taxable.

Nevertheless, the bank still continues trading and earns money. If at the end of the trading year, that’s a loss of a billion, the amount is added to the loss made last year and carried forward to the next trading year.

At the end of the next trading year, the bank makes a £5 billion profit but pays no tax because the profit is deducted from the loss - £25 billion less £5 billion means £20 billion is still carried forward to set off against the next profit.

So the bank has made £5 billion thanks to the government propping up their finances - but the taxpayer is down the amount paid in plus £1.5 billion in corporation tax due on the £5 billion profit.

Now, the banks are fighting to undermine government proposals to hit the banks with a windfall tax - a one-off payment to help the rest of us who are shelling out tax to pay for the money that kept the banks in business.

This just goes to show that bankers are robber barons chasing profits and are continuing to manipulate the economy in their own interests.

The U Party, formed by former National Association of Pension Funds chairman Robin Ellison intends to have a team of pension experts working to make pensions a policy issue for the major parties in next year’s election.

The party’s manifesto for pensions is a brief single paragraph on a web site and states pensions are unaffordable over the middle term, and over the next fifty years the retirement/pension age will have to rise to 75 so that everyone can have around 15 years in retirement, rather than 30/40 years.

The state pension system is so complicated that few understand it or can plan around it - and the private pension system is in process of being legislated out of existence. The U Party is campaigning for a simplification and improvement of the system, says the manifesto.

‘”The goals are to raise awareness amongst the public of the incoherence of pension strategy of each of the three main parties and to suggest a solution for each of them to adopt,” said Ellison, who is currently listed as the party’s only candidate.

Ellison said that the party has three main policies:

• To overhaul the state pensions system into one coherent pension instead of a state pension and a second state pension.
• Deregulate the private pensions system so that regulations covers 50 pages rather than 50,000 pages.
• Change the tax structure for pensions.

Ellison, who is now head of strategic development for pensions at Pinsent Masons, said that he hoped to build support for the party among other key figures in the pensions industry.

He added that he hoped other parties would adopt the U Party’s policies by ‘osmosis’ and expected the party to fold after the election next year.

Freedom SIPP was wound up in the High Court following a petition from HM Revenue and Customs allegedly over unpaid VAT - but sources at HMRC and the Financial Services Authority have also hinted at other tax issues.

Of course, one problem company does not mean all small SIPP providers are not running perfectly proper businesses.

Nevertheless, the recent FSA review of 60 small SIPP providers showed many failed regulatory procedures.

Now, an FSA spokesman says: “We do not currently have plans to review the rules but we are aware of interest in this area. Europe is considering guarantee schemes more widely and we may make changes as a result of these developments.”

Other industry watchdogs and SIPP providers are also putting pressure on for rule changes.

The Financial Services Consumer Panel, which monitors the Financial Services Authority, is calling for an urgent review of how investors’ cash is protected in a SIPPS.

Chairman Adam Phillips said: “More and more people are taking out SIPPs yet they don’t receive proper protection. This problem is only going to get bigger and needs to be addressed urgently.”

More than 80,000 people have £22 billion in SIPPs.

Many do not understand they receive little protection if the firm running the SIPP goes bust or suffers from fraud.

Only insurance companies funds held in a SIPP have full Financial Services Compensation Scheme protection. They get 100% cover for the first £2,000 and 90% cover for the rest.

SIPP investors with non-insurance funds are only covered up to £48.000 for any money held in shares, unit trusts and property and any money held in cash is only covered up to £50,000 per bank - including subsidiaries operating under the same banking licence.

Now, the firm’s 350 SIPP pension investors need to transfer their money to another scheme.

They are also waiting anxiously for HMRC to tell them whether the scheme has automatically been de-registered that attracts a 40% charge on the fund’s assets - thought to be a payment of about £66 million in tax.

Freedom SIPP terms and conditions state that the fund members are liable for the tax.

Freedom clients have been free to transfer assets but claim the company has put obstacles in the way - and they now have to find homes for their pension funds.

The Financial Services Authority said: “The Freedom SIPP has today been wound up in the High Court on a petition issued by HMRC for non payment of tax. The FSA supported this action in line with its statutory objective to protect consumers. The FSA believes it is in the best interest of Freedom SIPP scheme members for the Freedom SIPP to be placed in the hands of a liquidator.

“Following the winding up the FSA will continue to liaise with HMRC and the liquidator. Members will still be able to request a transfer of their investments to another SIPP scheme.”

Freedom SIPP has been closed to new business since September 2008.

The FSA has issued supervisory notices preventing the release of funds without consent from members.

Scheme members have received letters advising them to seek financial and legal advice following the issue of the winding up order.

The investors have a more or less straightforward choice - either transfer their funds to another UK pension provider or, if they live abroad, to a QROPS scheme.

HMRC refuses to comment on the 40% deregistration tax charge on the Freedom fund assets

“Our legal obligation to maintain customer confidentiality means we are unable to offer comment on the tax affairs of named individuals or organisations under any circumstances,” said an HMRC representative.

They heard the recession was an opening giving governments the opportunity to bring in tougher financial regulation under the excuse of preventing a future recession by allowing an unregulated world economy.

The speaker was Roger Bootle, economic adviser to Deloitte, a specialist adviser to the House of Commons Treasury Committee and an Honorary Fellow of the Institute of Actuaries.

Financial regulation threatens offshore centres

‘There are moves towards a re-regulation of the financial sector which I suspect will go too far,” he said.

‘The French and Germans are particularly concerned about this regulation of the financial sector and will push the Isle of Man and other offshore financial centres to be brought within some sort of net.

‘’I would be concerned and prepare for the worst and make representations very, very strongly.”

Bootle did offer some hope for the island’s economy by adding that the he ‘guessed the Isle of Man would have a pretty good case’ in showing the international economic community that it was a well regulated financial centre.

“But if I were advising the Isle of Man Government I would be suggesting there was a severe danger, probably greater now than there’s been at any time in the last 20 or 30 years,” he said.

Global corporation tax rate under discussion

Other offshore financial centres further away from Europe - like the Cayman Islands - have experienced severe economic problems as OECD governments have clamped down on banks and financial companies they claim are aiding tax evasion.

Several OECD countries have also put forward the suggestion of a global corporation tax rate that would particularly affect the Isle of Man, which has a zero rate tax for companies.

The action follows governments investing in the banks to stop them failing, which has given unprecedented access to the banking system as many countries now have taxpayer representatives sitting on their boards of directors.

The confusion lies with SIPP providers taking the view that the financial advisers recommending the product have responsibility for making sure the SIPP was suitable for the customer - but the FSA says this is a misinterpretation and the provider must take on this responsibility.

This misconception was revealed by an FSA investigation in to 60 small SIPP providers and was stated in a letter to all the SIPPS providers involved sent out last month.

Now some SIPP experts are predicting consolidation in the market because many of the smaller providers do not have the resources to manage their service to FSA standards.

Suffolk Life marketing director John Moret explained what is happening in an interview with trade publication Money Marketing.

He said: “There will of course always be a place for the true bespoke SIPP but I believe the regulatory overhead is becoming so great that many of the smaller operators will struggle to meet the FSA’s requirements.

“I also believe that the three prerequisites for succeeding as a SIPP operator are experienced management, a scalable IT platform and access to capital or financial strength. I think many of the small providers would fall down on one or more of these criteria and I think this is borne out by the comments in the FSA’s review.

“I remain convinced this will lead to consolidation of providers over time. One can debate whether this is a good thing. However the messages in the FSA’s paper are very clear and SIPP operators ignore them at their peril.”

 ”Fifty of the 70-odd SIPP operators around are running SIPP portfolios of less than 2,000 contracts. I have always regarded that as the rough threshold indicator for long-term viability of a SIPP provider.

“Many smaller SIPP providers started out as SSAS administrators or trustees and there is a world of difference between running a small number of SSAS’ - which are not subject to the same FSA regulatory over head as SIPPs - and a SIPP portfolio. This is where the problems lie.”

Whatever your financial goals or aims, seeking professional highly regulated advice as early as possible from Qrops Adviser, is the first step in securing the best possible life in retirement. Contact us via the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

Annuities are also a likely casualty of interest rates, as they are expected to stay pretty much the same until 2011 and are unlikely to climb above 2% until after 2014, said the Centre for Economics and Business Research.

The CEBR based their forecasts on the assumption that UK economic growth will stay in low gear for the next few years. This will curb inflation and wages that will allow the Bank of England keep interest rates down.

Pension holders living in Euro currency areas receiving payments from an annuity in sterling will find their buying power significantly reduced if the pound falls against the Euro.

CEBR expects the pound to fall to $1.40 and possibly below €1.00, depending on how money markets react to the long-term sustainability of the euro.

One way anyone living abroad with UK pension rights can protect their retirement income against currency fluctuation is by transferring their UK pension funds in to a QROPS - an overseas pension wrapper that allows plan holders to invest and withdraw from their overseas pension in any currency.

Also, a QROPS negates the pension holder’s obligation to buy an annuity, which is a legal obligation for a UK pension.

Low interest rates and possible currency issues mean annuities are not attractive investments for retirees.

‘Our forecasts show low levels of labour cost inflation which should keep the consumer price index low enough to prevent the Bank’s Monetary Policy Committee from having to raise rates until the economy is recovering, ‘ said Charles Davis, senior economist at the CEBR.

The forecasts consider the incoming government that wins next year’s general election will need to take make decisions about £100 billion in tax rises and spending cuts to correct the fiscal deficit,  said the CEBR.

Whatever your financial goals or aims, seeking professional highly regulated advice as early as possible from Qrops Adviser, is the first step in securing the best possible life in retirement. Contact us via the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

HM revenue and Customs also plans to speed up the review process of offshore investments by taking direct action rather than waiting for other regulators to hand over information, said Permanent Secretary for Tax Dave Hartnett.

He threatened that HMRC is at the vanguard of a global assault on tax evasion and will continue to pursue taxpayers who do not pay their dues - and revealed that the days of shielding assets in tax havens was at an end.

“What the UK taxman does today may well be followed by other tax authorities tomorrow,” he said at a meeting in Madrid.

“The world has begun to change. There may well be a place for offshore financial centres but it will be different. There is considerable political will to end banking secrecy and to establish tax transparency as the standard. Such centres will be able to continue only if they are fully transparent.”

Hartnett sees the exchange of tax information on request - which is the basis of the current Organisation for Economic Cooperation and Development (OECD) initiative - as the first step.

“I see automatic exchange of information as the benchmark. That is the position which I would like to reach as standard,” he said.

The Isle of Man has already to share tax data and Hartnett hopes that more jurisdictions will adopt automatic exchange as the basis of agreements between states as a mature approach for international financial centres to adopt.

Tax advisers are warning clients that the HMRC‘s tough stance is not just rhetoric but investors who fail to admit to their offshore liabilities are chased to the courts.

“Anyone who has not disclosed all their offshore income should look at their position rationally: it makes good financial sense to come clean now which, for the vast majority, means taking advantage of the New Disclosure Opportunity,” said John Cassidy, tax partner at PKF.

French banking conglomerate BNP Paribas will leave Nassau, Bahamas by the end of the year and will uproot branches in other countries that do meet OECD regulations on tax transparency, according to CEO Baudouin Prot.

Recently the world’s third largest insurance broker, Willis Group Holdings, announced that it was transferring its headquarters from Bermuda to Ireland, citing economic factors.

About 10 non-insurance related companies are also planning to leave Bermuda due to tax-related reasons.

Many Caribbean countries are facing economic hardships now the cash from banks and financial companies is drying up.

Another territory with big financial problems is The Cayman Islands - 10,000 financial institutions set up shop on the islands by 2008. At the top of the hedge fund boom, more than CI$3.4 trillion was flowing through the islands en route to London, New York and other financial centres.

Today, the story is much different, as the island’s government has had to borrow £38 million to payroll the civil service and spending after revenues from finance collapsed by 40% in a year and look to still be spiralling downwards.

In 2008, the islands had the 12^th largest GDP per head in the world.

“I am baffled, bemused and bothered that people call the Cayman Islands a secretive tax haven,” said Tony Travers, director of the Cayman Islands Financial Services Association. “We are simply tax neutral. It is unfair that when you see an article about tax havens it’s always illustrated by a palm tree, never a Swiss Alp.”

Critics in richer countries find the suggestion that the Cayman Islands already has an open and transparent financial process astonishing.

Travers feels that the no one should breach financial secrecy by accessing company records and accounts held on the islands.

“It is a legitimate right to commercial privacy,” he said. “We give companies protection but are always ready to pass on information to the authorities if they suspect criminal activity.”

The Financial Services Authority investigated a number of small SIPP providers last year and found that investors had received poor advice about charges, and how their pension products actually worked from independent financial advisers.

As a result, the FSA has order more than 60 small SIPP providers to tighten up their customer service and advice to customers.

The SIPP providers claim this is unfair because they do not sell their products direct to investors but via independent financial advisers, who they claim are responsible for the standards of advice.

One company, Suffolk Life has criticised the FSA demand that SIPP providers should take more responsibility for the suitability of advice claiming they are unworkable and will lead to extra costs.

Speaking at the Institute of Financial Planner’s annual conference, Suffolk Life marketing director John Moret said: “Taken to its logical conclusion these recommendations would appear to imply that a SIPP operator is expected to determine whether the advice given by an adviser is suitable.

“This seems to be a significant shift in responsibilities which would potentially put a SIPP operator in a difficult if not impossible position not least because a SIPP operator is rarely in position of all the facts.

“Many advisers would take exception to an operator acting in this way. I doubt that it is workable and it inevitably will lead to extra costs being incurred by the operator.”

The FSA recently published a ‘best advice’ paper for small SIPP providers suggested providers should routinely record and review the type and size of investments recommended by advisers, identify unusually small or large transactions and more unusual investments and request copies of suitability reports.

Moret added that the measures seemed out of line with the expectations of providers of other packaged products.

Shadow Chancellor George Osborne is proposing to increase state retirement age from 2016, 10 years earlier than the Labour government plans.

This will affect about 2.5 million people - aged between 48 and 57 - who will have to work at least a year longer than they were expecting before they can retire with a state pension.

Labour plans to raise the state retirement age for men from 65 to 66 in 2026. After that, the retirement age will continue rising to 67 in 2036 and 68 in 2046.  For women, the state retirement age rises from 60 to 65 between 2010 and 2020.

Osborne wants to speed up the process by changing the age thresholds at least 10 years earlier than Labour. Everyone over 30 will have to work at least a year longer to receive their state pension.

The Tories say they can save £13 billion a year with the move.

Mr Osborne is expected to tell the Tory party conference: “This is another one of those trade-offs any honest government has to confront. All parties accept that to afford that with an ageing population, the state pension will have to rise.

“The women’s pension age is already set to start rising next year to 65, and then in 2026 the pension age for men and women will go up to 66. Most experts now think that is too far off.

“Our aim will be to bring forward the date when pension age rises. We will ensure that no increase will happen until the second half of the next decade, in the Parliament after next.

“No one who is a pensioner today, or approaching retirement soon, will be affected. But this is how we can afford increasing the basic state pension for all.”

Lord Turner, who is now the head of the Financial Services Authority, reviewed the state pension process in 2005 and considered the state retirement age should rise to 70 years old by 2030.  He said in July: “If I was redoing my report I would be more radical, arguing for an even faster increase in the state pension age.”

Whatever your financial goals or aims, seeking professional highly regulated advice as early as possible from Qrops Adviser, is the first step in securing the best possible life in retirement. Contact us via the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

Tax on unearned income rises 1% to 19% and the annual 400 Euro income tax rebate is abolished; meaning the average pension pay out will face extra tax.

The Spanish government is trying to spin the income tax increases by targeting the rich - but many UK expats are caught in the tax net.

“Those with the most should make the biggest contribution,” said finance minister Elena Salgado.

The increase in unearned income tax is expected to raise 800 million Euros a year, only a small amount of the cash needed to plug the country’s budget deficit.

Living costs will rise as VAT goes up 2% to 18%, with the secondary banding for restaurants and hotels up 1% to 8%. VAT on food at 4% remains the same.

Other taxes to increase include those on capital gains and interest on savings.

Spain is one of the most popular retirement destinations from the UK, because of a better climate and the cost of living was cheaper in the UK.

Now, Spain is the first of many countries introducing tough budgets to cope with bailing out the banks in the recession.

Prime Minister Gordon Brown and Chancellor Alistair Darling have already warned that the UK faces some tough spending choices and many financial observers feel that taxes must rise as well.

UK VAT returns to 17.5% at the end of the year and the controversial 50% income tax rate for those earning more than £150,000 comes in from April.

Generally, the UK pre budget report is announced in November - but the big issue for the government is whether the measures will actually be put in to place due to the forthcoming 2010 General Election.

Whatever your financial goals or aims, seeking professional highly regulated advice as early as possible from Qrops Adviser, is the first step in securing the best possible life in retirement. Contact us via the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

Both companies are tight-lipped, but the City speculation is that Barclays will take-over soon in a deal worth £200 - £300 million.

Standard Life employs 300 staff in Edinburgh and in 2008 made a profit of £9.5 million.

Barclays is one of the few banks to refuse government aid during the recession and stands outside of any public ownership. The bank is looking at potential targets like Standard Life in the UK and other banks in Europe to pick up on the cheap while they struggle with financial problems.

Recently, Andrew Tully, head of pensions policy at Standard Life, said: “Some of the small SIPP providers are struggling to meet regulatory requirements and we are likely to see some consolidation between providers as a result.”

The Financial Services Authority has recognised this particular problem, and issued a paper this month outlining its dissatisfaction with the way some small SIPP providers treat investors.

Other issues facing SIPP providers are compensation levels for investors if the funds collapse or are victims of fraudsters like the Madoff Ponzi scheme.

An estimated 80,000 people with £22 billion of pension savings could find that their life savings are at risk because the Financial Services Compensation Scheme (FSCS) provides them with less protection than conventional retirement funds if they suffer fraud or insolvency.

Many investors rely on shares, unit trusts, property, bonds and cash to build retirement savings. Only the first £50,000 of cash deposits covered under current compensation rules, and for investments, only up to £48,000 can be reclaimed - which would generate a meagre pension at current annuity rates.

Standard Life, for example, only 40% of SIPP assets have £50,000 compensation protection in insured funds.

Cash in Standard Life SIPP is 11% of the total; 20% is in mutual funds like unit trusts and 29% is held in property and other bank accounts.

Whatever your financial goals or aims, seeking professional highly regulated advice as early as possible from Qrops Adviser, is the first step in securing the best possible life in retirement. Contact us via the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

At the root of the argument is a demand from the European Union that insurance companies should strengthen their financial reserves by holding more cash on reserve.

The insurance companies retaliated by saying if that’s what the EU wanted, then the money would have to come from cash set aside to fund retirement annuities - the result would be a cut in private pension payments as UK pension holders must buy an annuity with their pension fund before they are aged 75 or face massive tax penalties.

Now, other European insurance companies are weighing in criticise the scheme and the possibility is EU legislators are wilting under the attack and may water down the proposals.

In the UK, the Financial Services Authority was in favour of the scheme based on running computer models of doomsday scenarios for the economy if a recession hits.

UK insurance companies responded the criteria for the meltdown model were too severe and would cause financial hardship to millions.

Anyone with UK pension rights who lives permanently outside the country can avoid the annuity issue simply by transferring their pension funds to a QROPS - offshore pension schemes sanctioned by HM Revenue and Customs that have no requirement for retirees to buy an annuity.

The transfers cover all private pension funds but not the state pension - so investors with SIPP plans can also benefit from the tax advantages of a QROPS.

FSA managing director of retail markets Jon Pain has labelled the solvency rules a “potential time bomb” for the pensions market.

“The directive poses a significant risk for the pensions market. The nub of the issue arises from the question of whether the legislation will allow firms to continue to take into account a liquidity premium in capital provisions for annuity business,” he said.

“In simple terms, if the implementing legislation does not allow for it, annuity providers are likely to have to significantly increase the capital they hold and as a result increase the cost to consumers.”

Whatever your financial goals or aims, seeking professional highly regulated advice as early as possible from Qrops Adviser, is the first step in securing the best possible life in retirement. Contact us via the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

Financial Services Authority inspectors who regularly visit the banks are collecting tax data and information about tax avoidance schemes for clients.

The move follows Chancellor Alistair Darling’s criticism at the Brighton Labour Party conference this week of ‘stupid bankers’ taking the UK financial system to the brink of collapse and then bringing around the begging bowl for a £1.4 trillion bail out.

The FSA announced in July that plans were in the pipeline to penalise banks for giving tax avoidance advice. Part of this review is demanding proof from banks that they are adhering to tax laws.

Failure to comply was highlighted by a recent BBC TV Panorama programme that secretly filmed offshore advisors of UK banks giving misleading tax advise that might be considered as tax evasion by investing money through Hong Kong.

This inquiry is likely to end up costing the banks more in tax, said FSA chairman Adair Turner.

The financial collapse has revealed the internal workings of banks to financial regulators and the public as many of their processes are more transparent because government representatives now sit on their boards of directors.

This public investment has lifted the veil of secrecy that banks traditionally impose on their inner workings and customers can now see that huge profits are made at their expense often without justification - like extending margins on mortgage lending, revealing tax avoidance schemes and risky dealings.

Mean while, the Bank of England and FSA are still considering whether to penalise banks for keeping too much of their bail-out money in their vaults in stead of easing credit for homeowners and businesses that is contributing to the UK’s recovery from recession.

HM revenue and Customs is about to join the anti-banker party by drafting a voluntary code of tax conduct and ethics the banks need to adhere to - and if they don’t sign up, HMRC is threatening more tax investigations.

Whatever your financial goals or aims, seeking professional highly regulated advice as early as possible from Qrops Adviser, is the first step in securing the best possible life in retirement. Contact us via the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

The FSA has told about 60 smaller SIPP providers to clean up their act - with the main problem that the providers see financial advisors as having responsibility for the client, not the SIPP providing firm.

The FSA has written to all the firms, requesting they review their business processes and warned monitoring is ongoing and regulatory action will follow if SIPPs firms continue to flout the rules.

The FSA investigation showed several problems:

• A few SIPP providers do not check advisers who introduce clients are FSA authorised
• Many firms do not meet regulatory standards over systems and controls, training and competence regime, accuracy of illustrations and telling customers of charges.

The FSA review looked at about 60 small SIPP providers at the end of last year.

The review said: “Of particular concern were firms whose systems and controls were weak and inadequate to the extent that they had not identified obvious potential instances of poor advice and/or financial crime.

“We may take enforcement action against SIPP operators who do not safeguard their customers’ interests in this respect.”

Several SIPP firms were accused of not openly disclosing that some interest paid on client bank accounts was retained. The FSA has told firms to review their literature for clients to ensure annuities and income drawdown options are given equal prominence.

Besides the problems with small SIPP providers, a debate continues about whether a SIPP is the right pension product for people with UK pension rights living permanently overseas.

Many advisors argue that a QROPS - qualifying recognised overseas pension scheme - has more advantages than a SIPP for expatriates as the product is more tax-efficient, less sensitive to currency fluctuation and does away with the need to buy an annuity.

A QROPS also has all the advantages of a UK SIPP - for instance the ability to purchase commercial property in the UK and abroad.

Whatever your financial goals or aims, seeking professional highly regulated advice as early as possible from Qrops Adviser, is the first step in securing the best possible life in retirement. Contact us via the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

The Euro price was selected because this is the average price of a property in rural France, where many UK buyers are investing.

The banks’ strategy was exposed in a mystery shopper exercise carried out by foreign exchange broker Foremost Currency Group.

Foremost called four major high street banks and three brokers in a 15-minute window on the same day, so the results were not skewed by currency market fluctuations.

Credit: Foremost Currency Group

The same costs from four brokers, including Foremost averaged:

Credit: Foremost Currency Group

The figure shows an overseas property investor is paying £4,000 more for no extra service or benefits by going to a high street bank for foreign exchange rather than a specialist broker.

Robin McEwen, Foremost Currency Group managing director said: “Overseas property investors know that the quick returns characteristic of the late 90s and the ‘00s are a thing of the past, for the time being at least.

“Investors on tight budgets taking a long term view are returning to the market and financial institutions should be encouraging them to do so. By taking such a large margin on foreign exchange the high street banks are doing exactly the opposite.”

Recently the same banks and other UK banks have been criticised for extending mortgage margins to make more money from borrowers even when interest rates have been at their lowest ever.

Banks are also under fire about bonuses and stockpiling government cash to protect their balance sheets instead of lending to business.

Whatever your financial goals or aims, seeking professional highly regulated advice as early as possible from Qrops Adviser, is the first step in securing the best possible life in retirement. Contact us via the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

With the constant research and monitoring of QROPS Providers, Jurisdictions, Rules and Regulations and development, that we undertake, Qrops Adviser constantly brings the latest and most current details regarding QROPS.

The updated QROPS Guide will outline new developments, things to be aware of and some suggestions on how a QROPS transfer will benefit you.

The guide will be available to download on the QROPS Guide page

The island stands 14^th in the league of international financial centres, with Guernsey one place behind.

Top of the table are the financial giants of London and New York.

Offshore financial centres have faced a lot of criticism from the Organisation of Economic Development (OECD) countries as allowing wealthy individuals, banks and companies to operate behind a curtain of secrecy that contributed to the recession.

Them OECD countries, led by the UK and USA, have enforced many of these former tax havens to step out in to the light and allow transparent tax regulation for the first time.

The British Virgin Islands is the only offshore centre to rise in the ratings - up just one place to 33^rd.

The OECD has put together three lists of financial centres according to their willingness to impose regulation and reveal details of secret bank accounts.

The ‘White list’ centres are higher up the City’s financial centres league table than those on the ‘grey list’ - that include Bahamas and Gibraltar.

Centres on the ‘black list’ include Panama, the Dominican Republic and Turks and Caicos Islands.

The Global Financial Centres Index was first produced for the City of London Corporation in March 2007 and ism published every six months. Financial centres are rated on terms of competitiveness.

TOP TENS: How the leading financial centres stack up in different financial sectors 

Whatever your financial goals or aims, seeking professional highly regulated advice as early as possible from Qrops Adviser, is the first step in securing the best possible life in retirement. Contact us via the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

Countries like Panama, the Dominican Republic and the Turks and Caicos Islands are in the firing line for refusing to reveal details of who is hiding cash in their banking and financial systems.

The G20 leaders, including President Obama and Prime Minister Gordon Brown meet in Pittsburgh today to discuss the global financial crisis.

Darling made a statement prior to the start of the summit calling for the G20 to blacklist countries that fail to share information with financial regulators in other countries.

Failure to comply could result in economic sanctions.

“Just as we have been tackling tax havens, we also need to go after those countries that offer regulatory havens where mainstream regulators here and in America and in Europe can’t get the information they need,” Darling said. “If you don’t comply you get until March next year then you will be blacklisted.”

Brown and Darling will encourage other G20 leaders to back the blacklist when the G20 meets in November.

Besides threatening sanctions against nations that fail to comply, they also want the G20 to offer financial support to tax shelters that drop their status and allow G20 regulators access to their banks and finance houses.

“What we are saying to these companies is, ‘Look, you live in the same world as the rest of us; you enjoy the privileges when you travel that everybody else does,” Darling said. “You can’t shelter behind this veil of secrecy where we can’t get the information we need to understand the risks to which some of our institutions may be exposed.”

Darling wants the Financial Services Authority to have reciprocal access with other regulators so information that might help the government assess financial risk to UK banks and financial institutions.

Darling said he was hopeful the G20 would agree as the “whole climate” of thinking on regulation has changed over since the financial crisis began - especially as many G20 countries now hold large stakes in banks.

Whatever your financial goals or aims, seeking professional highly regulated advice as early as possible from Qrops Adviser, is the first step in securing the best possible life in retirement. Contact us via the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

Offshore investors need to seriously consider the rise of a new world order in currencies, headed by the rise and rise of the Chinese economy.

The BRICS countries - Brazil, Russia, India and China - are set to eclipse the old world order as global industrial powerhouses and having their currencies tied in to the US dollar does not suit their expansionist economies.

Dollar

The dollar is now a ball and chain for many of the world’s leading economies rather than a dream to aspire to.

Current dollar performance, says HSBC, is hardly awe-inspiring:

• The Euro has climbed to $1.48 signalling a new low for the dollar
• Currency traders are switching away from the dollar as other countries pull out of the recession - New Zealand is the latest country to pull free of the downturn with the NZ$ rising to a 13-month high against the US.
• Even in desperate Japan, where the economy is in tatters, the dollar is falling against the yen

China and Asia have reached a point where they cannot hold down their currencies to boost exports because this is holding back their own economies.

The problem was emerging before the recession but was masked by the global financial crisis.  Sooner or later the pressure will return to stress the US and other G10 countries as other nations see their economies motoring ahead.

“The dollar looks awfully like sterling after the First World War,” said David Bloom, HSBC’s currency chief.

“The whole picture of risk-reward for emerging market currencies has changed. It is not so much that they have risen to our standards; it is that we have fallen to theirs. It used to be that sovereign risk was mainly an emerging market issue but the events of the last year have shown that this is no longer the case.”

Whatever your financial goals or aims, seeking professional highly regulated advice as early as possible from Qrops Adviser, is the first step in securing the best possible life in retirement. Contact us via the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

Freedom SIPP (self invested personal pension) is in dispute with HM Revenue and Customs over outstanding VAT payments.

If the court approves the HMRC application, Freedom SIPP will be wound up triggering a 40% tax charge on all assets held by the company - that are mainly client investments.

The company, based in Bury, holds £165 million in investments for 350 clients.

The firm stopped taking new business in September 2008.

The Financial Services Authority also altered the firm’s standing after finding Freedom moved client money between funds without approval and failed to notify customers of charges deducted from their funds.

Act fast to avoid the tax charge

To avoid the tax charge, clients need to transfer their funds away from Freedom to a new SIPPs immediately, or if they have UK pension rights but live overseas, a QROPS.

If another regulated SIPP company took over Freedom as an administrator, clients would also escape tax charges.

HMRC refused to comment on the court case or the consequences of a wind-up.

An FSA spokesman says: “We have made customers of Freedom SIPP aware of this court case and its implications and have urged them to consider their options.”

A statement on the Freedom SIPP web site reads: “During the recent visit by the FSA it was agreed that certain additional administrative procedures needed to be implemented.

“We have volunteered to accept no new members until the changes required have been implemented. We will keep you informed and in the meantime we can assure you that your funds continue to be held as before.

“Freedom SIPP can confirm that we are working hard to ensure that, while the asset requirement persists, member transactions continue unaffected so that members do not suffer any prejudice. We can confirm that all members monies are secure and all standing orders will be actioned.”

Whatever your financial goals or aims, seeking professional highly regulated advice as early as possible from Qrops Adviser, is the first step in securing the best possible life in retirement. Contact us via the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

BBC’s Panorama programme, to be screened tonight, claims the Jersey unit of the bank is channelling client money through China in a tax avoidance scheme

The allegations are with HM Revenue and Customs for consideration of action.

The programme filmed a journalist posing as a client wanting to invest £4 million in an interview with a Lloyds TSB Offshore employee based in Jersey.

The employee explained that if the cash deposits were made in China via Hong Kong, the transaction would fall outside of the European Savings Tax Directive.

The journalist clearly said he did not want to pay tax and the banker said: “It’s of no interest to us whether you tell the taxman or not. It is not our business.”

According to the BBC, other banks bailed out by the taxpayer, including Northern Rock, are also directing wealthy customers tax havens.

HMRC is offering an amnesty to UK taxpayers with offshore savings accounts allowing savers to pay outstanding tax on interest, plus a penalty of 10%, if they come forward by March 2010.

The first amnesty n 2007 raised £450 million by targeting offshore accounts provided by High Street banks.

Tax evaders have been warned that HMRC will have information of their savings from banks and will pursue them for full payment of their tax bills.

Under British law, tax avoidance is legal - avoidance is reducing your tax bill be arranging your financial affairs to take advantage of any allowable tax reductions.

Tax evasion is a crime. Evasion is deliberately arranging your finances by failing to declare your full income that reduces the tax you owe.

Lloyds TSB is 43% owned by the taxpayer after a £17 billion bail out to stop the bank going broke in the recession.

Dave Hartnett, permanent secretary at HMRC, said: “That’s an incredibly irresponsible thing for him to have said. We might interpret that as meaning he was so reckless that he was giving his client a signal that he didn’t have to make a return of income. Were we to find that happening, we would take a dim view.”

Whatever your financial goals or aims, seeking professional highly regulated advice as early as possible from Qrops Adviser, is the first step in securing the best possible life in retirement. Contact us via the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

MW Self Invested Personal Pension Scheme, based in Douglas, Isle of Man, and listed on the HMRC QROPS list of QROPS providers, said the UK company was run independently of the Isle Of Man company but had common ownership, administration and directors

MW SIPP director Dougie Elliot said: ‘The only connection with the Manx companies was common ownership, administration and some directors,’” said Mr Elliott.

“Our main priority has been to protect the interests of the scheme members and ensure a continuity of good service. In view of this the directors who were also on the UK board have resigned from the Manx companies.

“This leaves John Bingham and me as sole directors of the Isle of Man Companies and all assets held by the trustee company are now under our direct control.

“Chris Williams and Philip Moores, who have stepped down from the Isle of Man companies as directors, have built a good reputation and track record over many years, and John Bingham and I believe them to have acted at all times with the highest levels of integrity.

“We look forward to them rejoining the board when this matter is resolved.”

Several people in the UK were arrested and files were seized as a result of the HMRC fraud inquiry, but were released without charge.

MW SIPP said the fraud concerned ‘alleged irregularities in a relatively small number of historic tax reclaims made in relation to SIPPs’.

Customers have had letters explaining the inquiry, said Mr Elliott. He added HMRC had also investigated some independent financial advisors in the UK and that files taken from MW Pensions UK offices had all been returned, except for those relating to the IFAs involved.

Mr Elliott said MW Pensions in the Isle of Man was not connected to the IFAs.

The investigation in the UK, he added, had nothing to do with MW Pensions in the Isle of Man.

Should you have any questions or concerns please do not hesitate to contact us via the contact Qrops Adviser

Guernsey Finance, the island’s finance marketing body, has already held a QROPS seminar in London and plans to host a QROPS debate in the City at the start of October.

Other seminars, events and meetings are planned across the world to raise the profile of the island’s QROPS, banking, funds, trusts and reinsurance sectors.

Peter Niven, Chief Executive of Guernsey Finance, said: “The economic downturn has impacted on the business flows that we have seen coming through our usual pipelines but importantly during this difficult time we have been keeping in close contact with our key introducers to show we are with them through thick and thin.

“Now, in the final few months of the year, we are stepping up our activity to ensure that we are in pole position to capitalise on the slowly emerging global economic recovery.”

QROPS Middle East

In the Middle East, Guernsey will participate at October’s Funds Forum Middle East and December’s Private Banking World Middle East, both in Bahrain. The island will also sponsor STEP Asia the Far East during October- one of the region’s leading financial conferences.

A delegation from the island, including Chief Minister Lyndon Trott, Mr Niven, Channel Islands Stock Exchange chairman Jonathan Hooley, Guernsey Registrar of Companies Mark Whiteley, will visit Hong Kong and China.

As well as meeting senior politicians and regulators, half-day seminars will showcase how Guernsey’s leading position for offshore funds makes it a natural gateway for accessing Europe’s capital markets and how the Island has considerable expertise in the use of companies and trusts for wealth management solutions.

Mr Niven said: “It is crucial for the future of our finance industry that we get the Guernsey brand fully established in the Middle East and the Far East. Having a representative on the ground in China has helped us make considerable progress in that region and the extremely strong programme we have put together for last few months of this year means that we will be entering 2010 with not only the Guernsey name better known but also a greater appreciation of the financial products and services we can offer both companies and individuals in the Middle Eastern and Asian markets.”

Whatever your financial goals or aims, seeking professional highly regulated advice as early as possible from Qrops Adviser, is the first step in securing the best possible life in retirement. Contact us via the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

Offshore finance expert Michael Foot is drafting a report on the government’s options and financial responsibilities towards the economies of overseas territories and crown dependencies.

The Treasury suggests the Government may have to make a provision of tens of millions of pounds to bail out the struggling former tax havens.

The irony is that Britain led a global campaign to close them down as tax avoidance schemes and evasion were siphoning £25 million a year out of the UK.

Presumably the government balanced the debit of tax gained from closing down the tax havens against any credit of aid payments that may go out to sustain their struggling economies.

Recently, the Cayman Islands asked the government for permission to raise £278 million in loans to plug a cash deficit in the economy - claiming no cash was available to pay civil servants.

The request was refused and the island’s government was told to look at raising income and property taxes instead.

Offshore

British dependencies and territories in trouble are thought to include Jersey, Guernsey, the Isle of Man, Bermuda, the Cayman Islands, Gibraltar and the British Virgin Islands - among the world’s most important tax havens.

The Guardian says Foot is concerned that tourism on Caribbean islands is also down and making problems worse.

The Treasury has clearly stated that it is not “the business of bailing out tax havens”; while the Foreign Office said overseas territories are responsible for their own finances.

Meanwhile, Jersey is projecting a £100 million budget deficit.

The Isle of Man is facing issues over the collapse of Icelandic bank, Kaupthing, which had a business on the island and may have to spend hundreds of millions of pounds to compensate savers.

Guernsey faces similar problems over the collapse of a Channel Island subsidiary of another Iceland bank, Landsbanki.

Britain has imposed direct rule and suspended the government of the Caribbean Turks and Caicos islands following allegations of corruption.

Whatever your financial goals or aims, seeking professional highly regulated advice as early as possible from Qrops Adviser, is the first step in securing the best possible life in retirement. Contact us via the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

Countries like Spain, Greece, Italy and Portugal have increasing debts after the recession and expats need to ensure their financial plans are on track as property, interest rates and taxes are quickly changing.

For instance, big investors are showing a lack of confidence in the economies by demanding interest rate premiums for buying Spanish government bonds in comparison to the price of their German equivalents.

The problem is investors buying debt of these Eurozone countries with weaker economies have no national currency to devalue or manipulate to tackle their financial woes and look to be trapped in years of debt stagnation.

Spanish prime minister Jose Luis Rodriquez Zapatero has already told hid country’s parliament that ‘moderate’ tax rises are needed to keep the countries welfare and social infrastructure functioning after a battering from the recession.

The government is looking to raise an extra 15 billion Euros in tax revenues.

The prime minister did not say which taxes are likely to rise - but hinted income tax would remain unchanged.

Tax on savings, investments, capital gains tax and VAT are all expected targets - as is the 400 Euro annual rebate for taxpayers.

This is a shot across the bows for expats living in the Mediterranean countries that need to look hard at their finances to make sure they are not caught with their assets trapped in an economic shambles.

Offshore Investments

Now certainly is a time to pull together offshore investments to make sure they are working tax efficiently. Other countries are considering similar tax strategies as Spain as they struggle to cope with huge black hole deficits from the recession.

For those with rights to UK pension benefits, putting pension investments in to a QROPS safely out of the way of governments looking to hike tax rates is an option well worth considering.

A QROPS scheme allows the investor to live wherever they wish and pay income tax according to that country’s rules on pension income - but the bonus is the QROPS can ‘live’ in another tax jurisdiction with better potential for growth in a lower tax environment.

Whatever your financial goals or aims, seeking professional highly regulated advice as early as possible from Qrops Adviser, is the first step in securing the best possible life in retirement. Contact us via the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

A little known rule in the Finance Act 2005 says that if expats defer drawing their state pensions for at least a year, they can withdraw the amount as a one-off lump sum or enhanced weekly payment at the standard rate.

This rule does not apply to expats whom have already retired and started drawing their pension.

The index-linked gain is because the state pension is deferred and paid at the standard rate, the pension has some inflation linking.

The catch is once the state pension is withdrawn; future pension payments are frozen at the amount of the first payment.

The rule is of significance to hundreds of thousands of expats who live outside Europe in countries with strong Commonwealth links like Canada, Australia, New Zealand and South Africa.

Expat Pension

Currently more than 500,000 British expats who have retired overseas have their pensions frozen at the payment amount when they first draw their state pension.

Their case bidding to force the government to index link all state pensions disregarding where the expat lives is before the European Court of Human Rights and a ruling is expected in March 2010

Of course, any expat planning to defer taking their state pension would need to have other cash to support their lifestyle.

Pension rules say anyone deferring their pension is compensated for the amount foregone by receiving enhanced weekly pension payments once a claim for payment takes effect as part of the Government’s policy of encouraging flexible retirement.

Other special rules apply if the pension was deferred before April 6, 2005.

Normal state pension requirements, like the expat reaching the state pension age and having a sufficient National Insurance Contributions record also apply.

The loophole does not change the way any state pension payments might be liable to income tax.

Anyone drawing their pension will have to wait for the European court ruling to see if their payments will be index linked.

Whatever your financial goals or aims, seeking professional highly regulated advice as early as possible from Qrops Adviser, is the first step in securing the best possible life in retirement. Contact us via the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

Every tax haven has folded under pressure from the world’s leading financial countries led by the UK and USA by signing agreements with one or more OECD countries.

Even ultra-secret Switzerland, Monaco and Liechtenstein have signed up to hand over sensitive financial information about bank holders and assets they had squirreled away where they thought was beyond the reach of the tax man.

Not only are thousands of bank accounts and investment now open to view, but also the financial world is seeing a shift towards transparency in financial transactions.

This shift is knocking the fat cat economies of former tax havens:

• The Cayman Islands, reportedly home to the largest number of hedge funds in the world and the fifth biggest global banking community is going broke.

  The government has come to the UK with a begging bowl for loans to pay civil servants and has been rebuffed because of doubts that the country has the ability to repay what it would owe.

  Venezuela has already handed a US$50 million lifeline and the government wanted £280 million from the UK.

• Offshore investments to Mauritius have dropped 50% as the country diversified away from sugar and textiles to banking and finance.
• Antigua and Barbuda is in serious financial troubles.
• The British Virgin Islands is in turmoil over a corruption inquiry relating

In reality, the days of exploiting grey areas and tax loopholes have gone - especially with so many governments worldwide taking controlling stakes in banks during the recession.

Sensible investors should now consider reviewing their options with a regulated and whole-of-the-market advisor who can offer a range of wealth management strategies that won’t exploit grey areas and attract the attention of tax investigators.

Whatever your financial goals or aims, seeking professional highly regulated advice as early as possible from Qrops Adviser, is the first step in securing the best possible life in retirement. Contact us via the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

Anyone with UK pension rights looking to transfer their funds in to a QROPS must take professional, independent advice from a QROPS expert.

Investors need a QROPS adviser who looks at the whole of the market and has a finger on the pulse of what’s going on behind the scenes.

Many QROPS advisers tailor their advice to a particular provider or jurisdiction, which is all well and good until some unforeseen problem strikes.

With Gibraltar it’s whether the county’s 0% tax rate for the over 60s is really a tax rate - if HM Revenue and Customs decide it is, then Gibraltar QROPS are OK.

If not, they breach the QROPS rules and any movement of cash from a UK pension in to a Gibraltar scheme falls outside the QROPS rules and becomes an unapproved transfer.

Unapproved transfers attract a 40% tax penalty and up to a 15% surcharge on the whole amount of money moved from the UK to the overseas scheme.

HMRC recently put pressure on the Guernsey authorities to close a QROPS loophole involving collapsing trusts that allowed transferees to take 100% of their fund tax-free.

If the Guernsey authorities had not agreed to change their rules alongside HMRC recommendations, the country could have been removed from the list of HMRC ‘approved’ QROPS jurisdictions leaving investors high and dry with the prospect of paying hefty fines and penalties on their savings.

Due to the amounts of money involved in QROPS pension transfers; it would be foolish to consider that some of the people involved in the system as advisers are not abusing the system.

The lesson for investors is do your due diligence before committing pen to paper on any transfer -

• Always use a regulated UK adviser that gives you recourse to a complaints procedure and compensation from the UK Financial Services Authority
• Make sure your adviser looks at the whole of the market to tailor a solution for your financial circumstances rather than squeezing a square peg in to a round hole by only offering limited QROPS solutions
• Choose a firm that has the skills and experience to monitor the QROPS market.

Remember it’s your money at risk and get-rich-quick schemes that sound too good to be true normally are…

To speak to an expert about your situation, fill out the form on the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

STM Group, a leading provider of Gibraltar QROPS pension schemes, has published interim results for the first half of 2009,  with chief executive Tim Revill stating the company’s Gibraltar QROPS business is frozen because HM Revenue and Customs has ‘de-classified’ Gibraltar as a recognised jurisdiction to accept UK pension transfers.

However, HMRC  has refused to comment.

Further clarification about Tim Revill’s comment has been sought from STM Group, but no response has been received from the company either.

The interim results included the statement by Tim Revill that said: “STM Pensions division, based in Gibraltar, from a standing start is making very good progress in the local market.

“However, its premium service, QROPS (the transfer of UK pension funds overseas), for which we had received a high number of instructions during the first half of 2009, has been temporarily frozen, due to a recent de-classification by HMRC of Gibraltar as a recognised jurisdiction.

“The local pensions industry (led by STM) is vigorously contesting this technical matter, but STM Pensions is also taking parallel steps to unblock this valuable client stream. HMRC’s actions could not have been envisaged and their actions will, unfortunately, impact the division’s full year performance.”

This statement is dated September 8 - so comes after the publication of the latest HMRC QROPS provider list on September 4 that includes several Gibraltar QROPS providers - including three entries for the STM GROUP.

Recently, Gibraltar QROPS providers formed a trade organisation to discuss alleged QROPS irregularities with HMRC.

Read a previous story - Gibraltar Qrops Update

Currently Qrops Adviser feel we cannot advise our clients to invest in Gibraltar QROPS because of uncertainty in the market following the statement from STM Group and the refusal of HMRC to confirm the jurisdiction status.

For further information contact Qrops Adviser.

New Zealand has several attractions for offshore investor:

• A stable and corruption free investment and political environment
• Uncomplicated land title system
• No stamp duty
• No capital gains tax
• High rental income returns

Yields on New Zealand commercial property have often showed a better return than many other countries.

For instance, for the same investment cash, the yield in Hong Kong is about 3% but 7% - 10% in New Zealand.

The largest New Zealand commercial investment this year was the sale of the Pernod Ricard building in Auckland for NZ$26.6 million  (£11.25 million). A syndicate of five high net worth European investors put the deal together.

This year, investors from Singapore, Malaya and South Korea are showing interest in other commercial sales.

New Zealand has suffered

New Zealand has suffered from the global recession, and although unemployment is running high, the effects have not reached the levels of many other countries. The Kiwi dollar is showing a trend of appreciation against the Pound and Us Dollar.

Current standings are NZ$1.00 equals £0.42 and US$0.70.

If you are looking to invest in New Zealand directly or via a QROPS, local experts suggest holding off until the NZ$ reaches the US$0.60 mark.

New Zealand Prime Minister John Key has announced that the economy may be over the worst of the recession and is confident of third quarter growth.

“We’ll continue to grow more aggressively as the world recovers,” he said.

Dairy exports, New Zealand’s second-biggest foreign-currency earner, have surged 55% in the last two months alone.

One of Britain’s biggest agricultural and rural property companies, Smiths Gore, is channelling millions of pounds of UK investment funds into Kiwi rural properties.]

“UK farm values have fallen from 2008, but not to the extent they have in New Zealand. This has created an investment disparity which many of our clients have expressed an interest in taking advantage of, said Giles Wordsworth, head of Smiths Gore’s National Farm Agency.

Whatever your financial goals or aims, seeking professional highly regulated advice as early as possible from Qrops Adviser, is the first step in securing the best possible life in retirement. Contact us via the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

Led by the UK and USA, the world’s richest countries are forcing these former tranquil financial backwaters to reveal offshore bank and investment client information so they can chase down unpaid tax.

The big economies feel the tax havens bear blame for the recession because they allowed multinational companies and rich individuals to set up tax avoidance - and in some cases tax evasion - strategies that had so many layers of secrecy that the whole system collapsed like a house of cards.

For years, financial institutions in these tax havens raked in the cash with virtually no questions asked.

Now, HM Revenue and Customs is chasing down expat investors with money stashed in these former havens for billions in unpaid tax and penalties. Tax authorities in other countries are also joining the posse and the tax havens are feeling the pinch:

Tax havens

The Cayman Islands have asked the UK government for a bailout. The islands shelter 80% of the world’s hedge funds and are the fifth largest global banking centre, but their government cannot afford to pay civil servants pensions and salaries.

Britain was asked to give permission for a £278 million loan, but the government replied that there were doubts the Caymans could repay the cash and suggested they considered raising payroll and property taxes.

The UK Foreign Office has suspended the Turks and Caicos government over corruption claims and rescheduled debts.

Jersey has a financial black hole of £80m out of a total income of £590m. A newly introduced sales tax is in place to make up the difference, but the tax may need to be increased soon because the island expects a further £50m shortfall in revenue from the recession.

Antigua and Barbuda is suffering from the collapse of Texas billionaire Sir Allen Stanford’s business empire. He is facing charges in the US relating to a US$7 billion fraud based on financial instruments issued by his bank on the islands. The country is accused of aiding and abetting the fraud and investors are suing the government for $24 billion in damages.

Whatever your financial goals or aims, seeking professional highly regulated advice as early as possible from Qrops Adviser, is the first step in securing the best possible life in retirement. Contact us via the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

It is important to look for strong investor protection principles which are similar to those associated with the UK.

It is important to look for jurisdictions where, after the QROPS member has been non resident for five complete tax years, there is a significant improvement in the investment and benefit options available. For example, where there is no requirement to buy an annuity at any time.

The good news is that there is now no minimum amount required. Normally £150k - £200k is needed to make a QROPS transfer cost effective due to the minimum charge imposed by the QROPS providers. This is why you will see many sites advertising “£150K plus In UK Pension?”, as these can only offer you one QROPS solution at one standard charging structure.

QROPS Adviser has negotiated these special terms and make our QROPS propositions the best in the industry. It is now cost effective for anyone to
transfer into a QROPS.

To receive a free full illustration of what the charges will be for your situation, contact us today.

Generally. the larger the pension pot, the lower the charges in terms of percentages. To receive a free full illustration of what the costs and charges will be for your situation, contact us today.

A transfer to a QROPS will be a Benefit Crystallisation Event and so will give rise to a tax charge if the amount transferred exceeds the individual’s unused lifetime allowance. This allowance, to which everyone is entitled, is GBP 1.6 million in the 2007/08 tax year. Thus before any transfer to a QROPS is finalised it is essential to check whether there is any possibility of this allowance being exceeded.

If yes, then registration for an “enhanced protection” should be put in place before transferring to a QROPS. This is a straight forward process and removes any possibility of an attack on the transfer.

QROPS Adviser is the leader in QROPS advice. Our specialist advisers will help you through the process the most efficient way possible. Complete the contact form here and we will contact you as a priority.

The first step is to complete a letter of authority. This enables the most up to date information about your scheme to be obtained including benefits and transfer value.

This will also allow us to collect the appropriate discharge forms from your pension provider.Once we have this information we will provide you with a detailed analysis of your current benefits and the advantages and disadvantages of transferring to a QROPS.

If a member who has transferred a QROPS and has not been a UK resident during the last five complete tax years then the operation of the QROPS becomes subject to the legislation associated with the jurisdiction to which the fund has been transferred.

Some of these jurisdictions do permit investment into residential property. Please discuss this with one of our advisers so that we advise you on the best QROPS and best jurisdiction for you.
When is it not a good idea to transfer to a QROPS?

Although in most situations we have come across associated with non-UK residents the arguments are overwhelmingly in favour of transferring UK pension rights to a QROPS.

However, some of the older pension plans have benefits such as guaranteed annuity rates that were set when interest rates were much higher than today. In those circumstances it may be better to stay put, however it is important to seek appropriate advice.

If the member has not been a UK resident during the last five complete tax years the UK rules associated with these benefits do not apply. The UK provisions associated with these type of benefits apply until the five year rule has been satisfied.

Annuities in payment and pensions in payment from occupational final salary schemes may not be transferred.

Transferring protected rights it is necessary to state that you understand that all protection associated with UK pensions legislation is being given up.

Savers who ignored the taxman’s amnesty of offshore investment in 2007 have a second chance to disclose details of their investments and to bring their tax affairs up to date 1 September and will run until 12 March 2010.

For a limited period, investors can benefit from the favourable penalty terms offered, but this offer is undercut by a second amnesty with reduced penalties for investors with cash in Liechtenstein.

For offshore investors with money stashed away anywhere other than Liechtenstein, they must make a full disclosure of all undeclared liabilities, not just those connected with an offshore account or asset.

Tax

This means the taxman will agree to:

• A fixed penalty of 10% of the taxes/duties underpaid.
• No penalty where the total of unpaid taxes or duties is less than £1,000.
• A fixed penalty of 20% must be paid by anyone who HMRC wrote to about the availability of the Offshore Disclosure Facility in 2007, either to tell them that they had their account details or to remind them to disclose after they had notified.

Anyone who meets the above criteria may have a chance to cut their 20% fixed penalty by half if they transfer their offshore funds to Liechtenstein and then make their declaration.

The UK government recently signed an agreement with financial authorities in Liechtenstein that will result in the grand duchy handing over details of an expected 100,000 previously secret bank accounts to HM Revenue and Customs.

From 1 September 2009 until 31 March 2015, UK taxpayers with undeclared investments in Liechtenstein can volunteer to put their past and future tax affairs on the right footing.

The Liechtenstein agreement allows them special terms:

• 10% fixed penalty on the underpaid liabilities with full interest paid
• No penalty where an innocent error has been made
• Assessment period limited to accounting periods/tax years commencing on or after 1 April 1999
• The option to choose a single composite rate of 40% or to calculate actual liability on an annual basis
• Assurance about criminal prosecution

Whatever your financial goals or aims, seeking professional highly regulated advice as early as possible from Qrops Adviser, is the first step in securing the best possible life in retirement. Contact us via the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.

HM Revenue and Customs has a long reach, so you need to be absolutely sure you have done everything you can to show you no longer have any connection with the UK when you leave for your new home.

Even when you have left and HMRC confirms you are not liable to UK income tax, some nasty little tax traps can still be sprung.

• If you sell property, stocks, shares or other assets that trigger a capital gains tax charge, you could be liable for all the tax due if you return to the UK within five years of leaving
• The millstone of inheritance tax remain hanging around your neck for three years after leaving the UK
• National Insurance liability can last up to a year after you have left the UK

Becoming an expat is not quite as easy as it may seem at first - but here are some tips of how to prove to the taxman that you have broken links with the UK for good:

Tax

• File forms P85 with HMRC to tell them you are non-resident.
• Try not to return to the UK for an entire tax year to emphasise the break in residence - for instance if you leave the UK in December 2008, don’t come back until after April 6, 2011.
• Do not return to the UK for more than 90 days a year after the first full tax year away.

Finance

• Cancel your UK credit cards and reduce the balances in your UK bank accounts.
• Consider transferring your pension in to a QROPS - if HMRC agrees you can transfer funds in to a QROPS, then they are agreeing you are a non -resident because UK residents cannot invest in an overseas pension.

Property

One of the keys is not to maintain a home in the UK so the taxman cannot claim you are only away temporarily and not really an expat.

• Sell your UK property after you have left the UK or let it out for at least 12 months.
• Do not leave your property empty so the tax man can claim you have a home here.

Thirteen pensioners living overseas want the government to increase their state pensions in line with inflation each year - which could mean a rise of up to £30 a week plus a backdated lump sum with interest.

UK state pension rules say only retirees who live in the European Economic Area (EEA) and 15 other countries, including some but not all Commonwealth nations, can have pensions that are linked to inflation.

The pensioners feel this is unfair as contributed to their state pensions while working in the UK, but are refused a benefit other pensioners get by right.

Andrew Harrop, head of Public Policy for Age Concern and Help the Aged, said: “It’s unfair that pensioners who have made national insurance contributions all their lives in the UK are penalised for retiring abroad and losing out on the uprating of their pension.”

“We hope the case today will see an end to this inequality and ensure the government gives every pensioner their fair share, no matter where they decide to retire.”

Fair Government

The UK Department of Work and Pensions argues that the government’s priority is to help the least well-off pensioners living in the UK.

The campaigners include pensioners who now live in South Africa, Australia, Hong Kong and Canada.

The pensioners and government will both make their case at the two-hour hearing in Strasbourg.

Judgment is not expected until at least March 2010.

The state pension has stood frozen at £67.50 a week for nine years for expats living outside the EEA and other approved countries but currently pays £95.25 a week to a single UK pensioner.

“It is the last chance we’ve got,” said Charles Poole, president of the South African Alliance of British Pensioners (SAABP). “We have to remain optimistic. We are confident human rights legislation is fair and that we have a fair and strong case. The discrimination against us is not based on any degree of logic.”

UK courts, including the House of Lords, have already dismissed the case.

Pension administrators are in talks with UK tax authorities about Gibraltar’s controversial 0% income tax for the over 60’s and are accusing rival pension companies in Guernsey of spreading rumours that Gibraltar is about to dropped as an ‘allowed’ place to transfer UK pensions.

Removal from the list would mean that no UK pension provider would allow pension transfers to a Gibraltar based scheme, effectively cutting the country out of the market.

Gibraltar companies STM Fidecs and Castle Trust have set up an Association of Pension Fund Administrators (APFA) to counter the bad PR and to formulate the jurisdiction’s QROPS products. They are locked in talks with HMRC about the nitty gritty of the terms and conditions that their QROPS products need to meet to retain HMRC  ‘allowed’ status.

APFA chairman David Erhardt said: “We think that we have fulfilled all the necessary requirements and are hoping the scheme gets the go-ahead soon. Gibraltar needs this to be resolved to avoid any kind of confusion. The bad publicity we could receive from being taken off the QROPS list would be disastrous, just as it was when it happened to Singapore.

“Gibraltar as a jurisdiction needs to ensure that this is resolved to retain the right of Gibraltarians to transfer their UK pension funds. It is really a case of ensuring that we do not get an unjustified bad global reputation.”

Tax

The issue that is causing the delay is that Gibraltar taxes income for the over 60’s at 0%. HMRC wants another band of income tax introduced that would catch higher income earners.

The Gibraltar QROPS scheme will also have a maximum 25% fund drawdown - that would allow the product to compete with those offered by Isle of Man pension providers. Currently, the Isle of Man is the only pension provider to allow a 30% QROPS drawdown.

APFA secretary, Jane Caulfield, believes that a lack of an agreement could have a negative impact: “If Gibraltar cannot accept QROPS, people could easily transfer their overseas pension funds to places like Guernsey. That is why we have received no help from other jurisdictions as it would be in their best interests for us to be out of the picture.”

If the assets are held within an insurance company based scheme then the funds in which you are investing will be converted into cash, and the transfer to the QROPS will be in cash.

If your existing registered pension scheme is a SIPP or a SSAS then it may be possible to transfer the existing assets to the QROPS, if the receiving scheme administrators or trustees are willing to accept them.

We will keep you updated with the Qrops Malta developments

To find out more contact Qrops Adviser.

The people or organization responsible for managing the scheme must ensure that the fund is sufficient to pay out at the appropriate rate when the member retires. The fund will typically be made up from contributions from employees and employers, and possibly from investment gains the fund has made. Accordingly, the risk here remains with the administrators of the scheme. As an employee, as long as you make the contributions required of you and complete the requisite number of years of qualifying service, you are entitle to receive the pension you signed up for.

Defined pension schemes are used to attract and retain high calibre candidates for top level jobs, and are generally seen as a signal that an employer values its employees.

Phased Out

However, defined pension schemes are dying out. Virtually no one offers final salary schemes to new employees anymore. The Association of Consulting Actuaries estimates that 80% of employers who operate final salary pension schemes no longer offer them as standard to new employees, as opposed to only 68% some 2 years ago. Barclays, IBM and BP to name but a few have taken this step. Several companies have even closed their existing schemes, forcing their employees to transfer to defined contribution arrangements.

The reasons for this are twofold. Firstly, many companies just cannot afford to continue them. With the level of payments for defined pension schemes having been crystallised so many years ago, they simply have not performed well enough to meet the needs of their members on retirement. Many funds have been invested in equities, whose performance has disappointed in recent years. However, notwithstanding the poor performance of the fund, the trustees are still obliged to pay out at the predefined level, which means that gaping holes are commonplace and have needed to be filled with cash. Also, as a population we are living longer. So not only have the funds not performed as well as their managers might have hoped, but they are expected to pay out to members for longer as most people survive well into their eighties.

Where have the employers got this extra cash from? This is not just a balance sheet adjustment that can be conjured up by a clever accountant. It has to be pinched and scraped together from other areas of the business - from cost cutting, reductions in investment and research and development, and possibly from cutting staff numbers. In a financial climate where some employers are struggling to weather the storm, the obligation to fill a hole in a pensions fund can be the last straw.

In fact, some commentators say that it was the pensions bill that brought down General Motors. It was widely reported that when you bought one of their cars, the proportion of the purchase price going towards the employees’ pension fund deficit was greater than the cost of the steel it took to make the car.

So it stands to reason that cost and unpredictability is the main driver for companies who cease to offer final salary pension schemes. However, the regulatory burden they carry is also becoming prohibitively heavy, with employers and scheme administrators being subject to scrutiny about the decisions they make. Pensions administrators have to notify to their regulators if they have any concerns.

Financial Future

What is clear about this move away from defined pension schemes is that the financial future of those who previously thought that they were heading for a comfortable retirement is less certain. With defined contribution schemes, the risk is born by the employee. Notwithstanding a working life characterised by dutiful payment of pension contributions; if the stock market or other fund investments fail, your quality of life in retirement will suffer.

Increasing longevity and a poor financial outlook are conspiring to make pensions higher on everyone’s list of priorities, and possibly higher up the political agenda.  The question is, from an employee’s perspective, are you prepared to bear a reduction in your take home pay now to secure your retirement income by padding your pension fund with higher contributions? If your final salary scheme has closed its trap door and pulled up the rope ladder, you may have no choice.

To help you to decide whether a QROPS is correct you, contact us today using the form on the contact Qrops Adviser page or email us direct at info@qropsadviser.com

Early retirement means stopping work earlier than the current state retirement age, which is currently 60 for women and 65 for men, although this is being equalised to 65 for both sexes by 2020, and gradually extended to 68 for everyone by 2044.

There is no legal obligation on your employer to let you retire early, so if they do not agree to release you, you will be treated as resigning in the usual way. However, in a climate where most employers are keen to shed some staff to save costs, granting requests for early retirement is more a favourable alternative to making redundancies from a morale and publicity perspective.

What effect will it have on your state pension?

If you retire earlier than the state retirement age, you will not be able to claim your state pension sooner. Accordingly, you will have to rely on other, private means until you reach your state pensionable age. So for a man retiring early at 50, he will have to fund his living expenses exclusively from his own pocket for 15 years until his state pension kicks in at 65.

 Further, giving up work can have another effect on your state pension entitlement. If you do not have enough “qualifying years” of actual or deemed National Insurance Contributions, you may not be entitled to a full state pension in any event. The number of “qualifying years” you needs depends on how old you are, and when you intend to retire. For women who have taken time out of the workplace to raise children or care for elderly relatives, there may be a home responsibilities credit available to fill such gaps in their employment. So before you hand in your notice, check with the Department for Work and Pensions that your decision to stop early will not affect this.

What effect will it have on your private pension?

The current law allows you to draw down from private pensions at the age of 50, although this is rising to 55 in April 2010. Private pensions might allow you to take retirement earlier than you had previously envisaged, although the decision to allow this could be at the discretion of some anonymous trustees.

The question with a private pension is: can you afford early retirement? In the pensions world, “longevity” is often complained about as a financial problem to be overcome, rather than celebrated thanks to our national improved health and living conditions. However, it is an inescapable fact that if you are going to live longer than your grandfather, you will have to have a bigger pension pot to fund a longer retirement.

Ill health 

Most schemes allow members to retire early on the grounds of ill health. The conditions to be met are quite stringent. Even if you meet them, if you are married or have a civil partner and are seriously ill, new pensions regulations continue to fetter your freedom to spend your pension fund in your own way, insisting that you use 50% of the fund to purchase a survivor’s spouse’s pension.

Are you ready to retire yet?

Apart from the financial implications or early retirement, it is worth pausing to consider whether you are actually ready. Work comes with an inbuilt social life and sense of motivation. Are you ready to give that up? As a senior member of your organization, you may enjoy being at the peak of your career, and be passionate about passing on your know-how to younger generations. Whilst the so-called baby boomer generation are not characterised by “pipe and slipper” retirements, it can take some time to adjust to the new, retired, you. 

It’s a sad fact that, despite anti-ageism legislation being in place, there is a bias against recruiting more mature candidates for certain posts. So consider your decision carefully before handing in your letter of resignation: it may be a one-way trip.

What are the alternatives?

With millions facing shortfalls in their private pension funds and the realisation that the state will not provide a comfortable retirement, part time and flexible working is bound to increase among the over 50s. This is a middle way between full time working life and retirement.

Notwithstanding the recent falls in property prices, if you bought your house a long time ago you could be sitting on a comfortable cushion of equity. Take careful advice from a regulated adviser before proceeding with such a scheme, but it could be a method of releasing some capital to help your children onto the property ladder or fund the trip of a lifetime without actually having to retire.

To help you to decide whether a QROPS is correct you, contact us today using the form on the contact Qrops Adviser page or email us direct at info@qropsadviser.com

Sir Fred Goodwin is a case in point here. As former head of RBS, his £350,000 per year pension (cut from £703,000) is amazing in an environment where the rest of the public is just grateful enough to hang on to their jobs. Whilst the details of the award may well have been agreed in more prosperous years, it’s still out of kilter with the fact that he left RBS under a cloud. Indeed, taxpayers are rightly furious that their taxes (in the form of government bailouts) will be keeping Sir Fred in the manner to which he is accustomed.

However, according to further disclosures, it seems that such high pension figures are not unusual in the banking world. Sir James Crosby, former head of HBOS, is known to have amassed a pension pot of £10 million. So while banking directors have risked and lost billions of pounds belonging to the average person, their own gains have been safe. Given that there are other banking executives who are earning significant salaries, we may never know what their pensions amount to, given that they are not directors and therefore not subject to public disclosure requirements.  

Pension Scandals

Other pensioners who left their employment under a cloud include Michael Martin, the former Speaker of the House of Commons. At £77,000 per annum, his pension is not quite in the same league as Sir Fred’s , but he will still be approximately seven times better off then most pensioners.

Thanks to the expenses scandal, MPs have suffered a reduction in popularity, with the press crawling all over their expenditure and entitlements. MPs are entitled to a comfortable final salary scheme, which, it is estimated, would put their annual retirement income at around £40,000 per annum on the basis that this would be two thirds of their final salary.. But the Association of Consulting Actuaries has demanded that MPs’ pensions are drawn in line with other professions of a similar level, and realign themselves around a career average structure.

Schemes

But what about the pension schemes whose members do not hit the headlines? It’s a common presumption that the public sector are paid less favourably than the private sector, but make up for this in better working conditions, job security and boosted pension funds.

After all, even in today’s straitened times, what could be safer than a final salary pension fund backed by UK plc? Public sector pensions also have the benefit of being index linked rather than relying on investment returns, so the monies paid out will be a fairer reflection on the member’s true, rather than their estimated, cost of living. However, not all public sector pensions are created equal. There is a hierarchy within the public sector.

Apart from the Armed Forces, who generally make no monetary contributions to their pensions, public sector employees contribute between 6 and 11 percent of their salary to the funds. The remainder of the bill is picked up by the British taxpayer. The Pensions Policy Institute, an independent research charity, estimates that the total annual bill is £16 billion.

The Government have taken some moves to reduce this burden. For example, for civil servants, teachers and NHS workers the retirement age has risen to 65. However, this does not have retrospective effect: the five million people who currently qualify for a public sector pension are bound by whatever age the scheme originally set. 

For private sector workers, 80% of final salary schemes are closed to new entrants. Further, even those in existing schemes are not safe, with defined benefits schemes being wound up on the grounds of lack of affordability, and being transferred into defined contributions schemes. So while there may be higher wages in the private sector, it seems that public sector employees get a better, safer, pensions deal.

If you are not prepared to change career or sector to secure a better pension, what can you do to make yours work as hard as possible?

• Take professional advice about the correct product for you.
• Contribute as much as you can.
• Start as early as you can.

To help you to decide whether a QROPS is correct you, contact us today using the form on the contact Qrops Adviser page or email us direct at info@qropsadviser.com

Why is there such a discrepancy between men and women’s pension provisions and what can be done about it?

State Pension

To qualify for a state pension, individuals in the UK have to have a certain number of “qualifying years” of National Insurance Contributions. The exact number depends on how old you are, and when you want to retire. The total required for women is set at a lower limit already, but additionally the state pension system recognises that women take time out of the workplace to care for young children, and make an allowance for missing qualifying years by using “home responsibilities protection” to make up the difference. Even so, many women still do not have the required number of qualifying years in their own right, although if they are married they can rely on their husband’s entitlement.

However, these days the poverty of pensioners has been well publicised. So why are women failing to make adequate provision? The answer seems to be cultural one, with women focussing any spare cash on their families. However, in an age when 1 in 3 new marriages will end in divorce, it is unrealistic to count on the traditional family model of a male breadwinner providing for the household for your financial future. Whilst it may be unromantic to consider this as a young couple, the reality should not be ignored. During maternity leave or a career gap, payments can be made from the couple’s income in the wife’s name to take advantage of the tax efficiency of saving in a pension.

Safest Options

Pension pots can be taken into account on divorce, when the courts or mediators are diving up a couple’s assets. So some wives who have made no provisions of their own in the expectation that they would share their husband’s have not lost out. This is the kind of thing that could be provided for in a pre-nuptial agreement, but it is never safe to rely on such arrangements: the safest thing is to make one’s own arrangements.

In a society where you are likely to live longer, but need more healthcare, waiting for an inheritance from your parents is no longer an option. The chances are that there will be many families of pensioner parents whose own pensioner aged children will have to work to support them. Care home fees can run to hundred of pounds a week, for which there is no government help for families with savings.  

In 2008 the Office for National Statistics showed that there were around 850,000 women of retirement age who were still working. While the state retirement age is currently 60 for women, rising to 65 and eventually 68, it may be the norm to see women much older than that continuing to work out of necessity to cover food and fuel bills, rather than as a lifestyle choice to pay for luxuries. The same survey showed that women earn 17% on average less than men, which is mostly attributed to the career breaks they take to raise children.

What can women do about this?

The only answer is that they have to start saving sooner. And they need to save more. As women are leaving it until later to start a family (the average age of a woman giving birth to her first child is 29), pensions contributions should be started as soon as you start your career. On the other hand, this is easier said than done, as many young people at the start of their careers are struggling to repay student debts and to save for a deposit for a house.

So after the debts have been paid off, deposit put down on a flat, wedding paid for and babies delivered, rather than viewing pensions contributions as a luxury to be considered after all the other bills and expenses have been paid every month, pension saving needs to be prioritised higher up the list of family priorities. If woman’s employer has an occupational scheme, she should consider joining at the earliest opportunity: even if she feels that her contributions are not significant they will add up and grow over time.

To help you to decide whether a QROPS is correct you, contact us today using the form on the contact Qrops Adviser page or email us direct at info@qropsadviser.com

Let’s look at two famous examples of pension schemes that have failed, and see what lessons, if any the Government has learnt from them.

Equitable Life

The Equitable Life scandal is the proof that well-informed, well-educated professionals can be victims of financial disasters. Among those who lost out from Equitable Life’s collapse were lawyers, accountants and doctors.

The organization was established in 1762 and was one of the biggest mutually owned insurance associations in the world, at one point having 1.5 million policyholders. Its reputation as a financial giant was self-perpetuating - if over a million people trusted them with their savings, then surely their investment policies must be sound…

On certain policies, Equitable Life offered a Guaranteed Annuity Rate (GAR), which was a predefined level of income to be paid to members of pension schemes on their retirement. It became apparent however, that this was never going to materialise, and worse still that Equitable Life had at best been hopelessly optimistic about the prospect of ever achieving the GAR in the first place. The scandal was smashed open when a black hole of £1.5 billion was revealed in the difference between what Equitable Life had invested, and what was due to policyholders under the GAR scheme. The company was closed to new business in 2000, although the organization continues to operate on a pared down basis as The Equitable, with several hundreds of thousand policy holders.

Lord Penrose was commissioned to report on the Equitable Life scandal in 2004, and his findings were approved and endorsed in 2008 by a report by the Pensions Ombudsman, Ann Abraham. They both found that Equitable Life had exaggerated claims of its worth and employed “dubious” actuarial techniques to view the balance sheet of its various funds through rose tinted glasses. But Ann Abraham held that the blame should not just be shouldered by Equitable Life’s management. She concluded that the Government was also complicit, having failed to regulate the sector with adequate vigour.

Allied Steel & Wire

When Allied Steel & Wire went into receivership in 2002, it left 1,300 people without jobs and little or no pensions benefits. In fact, some people lost as much as 80% of their entitlement. It’s a growing pattern that cash-strapped employers are tempted to use whatever spare money they have to prop up their businesses rather than squirrel it away in a pension scheme. When the company collapsed, so did the pension scheme. But rather than blame the management, Pensions Ombudsman Ann Abrahams once again blamed the Government regulators for failing to keep a close enough eye on those who run such schemes.

After bringing a case against the Government for alleged failure to implement a European Union Directive requiring governments to protect pensions, the ex-employees of Allied Steel & Wire, like others who suffered a similar fate between 1997 and 2005, are entitled to make a claim from the Financial Assistance Scheme.

Pension Protection Fund

The Pension Protection Fund (PPF) was introduced in April 2005, and is funded mostly by raising a risk-based levy on existing pension schemes. The riskier the scheme, the higher the levy. This was introduced to counter the widespread criticism that the Government had not ensured that pension schemes had not set aside enough for a rainy day. Whilst this is a positive step forward, it should be noted that this fund only covers those with defined benefit (final salary) schemes, and not defined contribution schemes. So with defined contribution schemes, as ever, the risk of losing one’s pension remains with the employee.

What to do if the worst should happen

If the worst should happen and you wake in the morning to hear the news of your final salary pension scheme going up in smoke, here are the most practical steps to take.

• Dust off your pensions paperwork. Have all the details to hand.
• Keep an eye on the DWP website to check for any announcements.
• Contact the Citizen’s Advice Bureau for specific advice.

It’s widely accepted that the banking crisis was caused by people taking unacceptable risks, which is why a retreat from complex financial products (like some pensions) is likely. Those with defined contribution scheme have seen their pension pots dwindle significantly in recent years, despite making regular contributions. So what will people invest in instead? Even the fall in house prices does not seem to have dampened people’s long term enthusiasm for bricks and mortar. Whether or not it is true, investing in property is so deeply engrained in our national psyche that we want to believe that the housing slump is a “temporary blip” and that, as a crowded island, we will always need more houses.

So should we abandon traditional pensions and invest in property instead?

Expertise and complexity

A house is a house. You do not need a degree in economics to know whether you think it is a good deal or a bad deal. If it’s in your neighbourhood, you probably know what it’s worth, and how much it could be rented out for. Eavesdrop at any dinner party in the UK and you will hear similar conversations being played out.  

On the other hand, how many people around the same table have an understanding and knowledge of complex non-participating rights offerings and securitised packages of mezzanine debt? The financial crisis has compounded a suspicion people feel for financial products they don’t really understand. Being bamboozled with smoke and mirrors tricks with risk and liabilities isn’t sophisticated, it’s dangerous.

Cost

The cost of getting into property investments depends on whether you are a cash buyer, or whether you need a mortgage. If you need a mortgage, you may need to find a substantial deposit to get a decent deal. You may have to service that mortgage yourself if you have a rental void, not to mention mortgage arrangement  fees, surveyors’ and lawyers’ fees. Depending on the value and location of the investment property, you may also be liable for Stamp Duty Land Tax when you purchase it.

These are just the “start-up” costs. Your responsibilities as a landlord may lead to expenditure on repairs and maintenance, not to mention the inconvenience of being at the beck and call of the tenant, or the cost of having to pay a managing agent to do this for you.

The start-up costs to pensions are relatively low, although you will have to pay fund management fees on most products.

Tax

The Government seems to have already weighted our decision in favour of pensions. The tax breaks available mean that an £80 contribution for a basic rate taxpayer is topped up to £100, which over time can seriously add up. For higher rate taxpayers the tax advantage of pensions is even more compelling, as their contributions are topped up by 40%. There are no such incentives in favour of property investment (unless you count the SIPPs rules which apply to syndicates). It’s true that when you come to draw the pension you will be liable for tax, but in certain circumstances if you take a quarter of the fund as a lump sum, and there will be no tax to pay on that portion.

Historic Performance

Of course, both stock markets and property values can go up as well as down. But with pensions you get a broader spread of risk, as your investment is pooled with others and may be spread across various funds. The fund is managed by professionals, who have access to information about the market which can enable them to take calculated risks. With property, even if you are fortunate enough to build up a portfolio, it is only ever likely to be a small one. Your retirement fund will still be tied up in a small handful of assets which will be vulnerable to market fluctuations.

Exit Strategy

Changing your investment in property is simple enough in a decent market. When you’ve found a buyer, you can release the capital that is tied up in the house or flat and spend it there and then, however you please. There is no need to wait until any particular birthday to unlock the value of your investments. However, if the property isn’t your principal place of residence, you may be liable to Capital Gains Tax.

However you decide to provide for your retirement, make sure you take suitable, professional advice about the way forward.

Remember if you transfer your existing pension into a QROPS, then it is possible to purchase property with your pension fund.

Contact us for more information. Fill out the form on the contact Qrops Adviser page or email us direct at info@qropsadviser.com

Firstly, the percentage of people aged over 65 is set to rise in the next 30 years from 16% to 25%. This presents a simple problem: there will be fewer people of working age to support the older population. The demographic trend to longevity is linked to the improvement in living conditions and health of older people, and also to a reduction in the birth rate. So how will we support a growing number of pensioners?

Defined Contributions

Perhaps the most widely publicised aspect to the pension’s crisis is the fact that defined contribution schemes have not performed as well as expected. Commonly found in the private sector, defined contribution schemes are based on money purchase arrangements, where the member pays in at a particular level, and receives a pension based on the value of the fund, according to its investment performance. The risk in this arrangement remains with the member. The problem is that most of these schemes invested heavily in equities markets, and as such face substantial deficits as markets have underperformed expectations. Consequently, those relying on their private defined contribution scheme for a comfortable retirement may be sorely disappointed. In previous years one might have drawn comfort from the possibility that an Englishman’s home is his castle - an equity release scheme could have cushioned the blow. However, falling house prices are having an effect on the availability and attractiveness of such deals.

The public sector is suffering from its own pension’s crisis. The Organisation for Economic Co-operation and Development has estimated that, with generous pension provisions for its staff, the public sector has a total liability of £1 trillion for public sector pensions. This is particularly worrying given that this has to be recouped from the private sector and made up out of taxes, present and future.

People Without Pensions

Perhaps the least publicised but most worrying aspect of the pension’s crisis is that more than half of the British public have not made any personal provision for their retirement in any event. It is not clear from the figures available whether this low take-up in pension’s savings is due to apathy, (mistakenly) believing that the state will provide an adequate pension for a comfortable retirement. On the other hand, with housing and food bills being so high, it is possible that people have wanted to save but have not been able because they cannot afford to. Making a regular contribution to a pension is another bill to pay at the end of every tight month.

With some horrifying figures being thrown around as shortfalls (the OECD holds that British pension pots fell by 17.5% last year), action needs to be taken to stem this crisis. The Government is already raising the state retirement age, so that the state pension will shortly not become due until 65 for both men and women, which will rise gradually to 68 by 2046.

From 2012, the Government intends that all employees will be automatically enrolled in a pension savings scheme, with a small percentage of their earnings being deducted automatically. This is a form of soft compulsion, as there will be the choice to opt out, but the Government assumes that most people will just think that it is too much hassle. Employers will also notice a change, as they will be forced to contribute too. However, it is naive to think that businesses, which exist to generate profit, are going to absorb these changes without trying to claw back some of the costs themselves. The employers’ contributions will no doubt be derived from higher prices for consumers, lower returns for investors and pay freezes or lower pay rises.

The business community is concerned about the effect this will have on the competitiveness of UK plc. After all, it represents a significant cost to running a business here if you have to make large contributions to employees’ personal savings scheme. It remains to be seen whether this will have any effect.

The Government provides a Pension Credit scheme, which is a means tested benefit purporting to ensure that all pensioners have a minimum weekly income. However, the take up on this is low, particularly among those who were alive in the Second World War whose pride and dignity prevent them from applying for benefits. We will see whether the so-called “baby boomer” generation will have the same attitude when they bear the brunt of the pension’s crisis.

The first thing to do if you think you may have a “lost pension”, is write down a timeline, with details of who you worked for, and when. Take details from copies of your old curriculum vitae, to get specific dates. Then see if you can contact the former employers direct. If you have access to the Internet, why not look up the former employer’s details on Companies House? Anyone with a credit or debit card can purchase copies of accounts that have been filed online. Or a less technical approach to your search would be to ask any former colleagues you still have contact with whether there was a pension scheme in operation. A few decades ago some employers were so paternalistic that there employees may not have appreciated the deductions being made for their contributions.

Do not worry about a negative response from your former employer when you contact them.  As administrators of pension schemes they are likely to have an obligation as a trustee to keep your monies separate from the general company’s funds. No doubt any lost funds are an irritation for a company accountant, who will be glad to hear from you and close his file on the matter of the missing pension beneficiary!

It can be difficult to find out what happened to previous employers - particularly if you have moved out of the geographical area and the firm was a small one. Perhaps you will have to pass the detective work to someone else.

Pension Tracing Service

That’s why the Department of Work and Pensions has set up the Pension Tracing Service. There’s no guarantee that you will be entitled to receive any benefits, but at least the body should be able to put you in touch with the people or organization who currently administer the pension scheme of which you are a member. The Pension Tracing Service has access of over 200,000 pensions, so they already have plenty of places to start.

Even if you have lost your old paperwork relating to the pension, the Pension Tracing Service (PTS) can still make a free search with the following information:

• Whether you were a member of a personal or occupational scheme.
• Your former employer’s name and address
• The type of business they were involved in.
• If a personal scheme, the name of the insurance company who administered it.

The PTS has a standard form to fill in, which (according to their website) takes about 15 minutes to fill in. This may sound daunting, but it could be argued that it’s a small price to pay if they can find your missing pension.

You may come across some private agencies who will charge you a fee for finding your lost pension. It is difficult to imagine where else they might look apart from the PTS and the techniques described above, so before you turn to them, perhaps the PTS is the best idea.

Qrops Adviser will undertake the tracing requirement to find any “lost” pension scheme you may have. Fill out the form on the contact Qrops Adviser page or email us direct at info@qropsadviser.com

Qrops Adviser has seen an unprecedented increase in the demand for QROPS advice globally. Our dedication is to deliver the very best QROPS advice and guidance to everyone, wherever in the world. With our commitment to being the world leaders, we have a global expansion plan under final review and will be set in motion in the next coming months.

Over the last 18 months, the Qrops Adviser management team and highly experienced senior advisers has doubled, giving us the ability to deliver more advice to more individuals. Helping people to transfer their hard earned savings to a QROPS Pension.

We are the world leaders in Qrops advice and the future is clear that we will stay that way for a long time to come.

Contact Qrops Adviser to discuss your situation and to find out how we can help you.