Guernsey QROPS providers urge new rules to stop scams

Guernsey pension providers want to tighten up QROPS rules to stop unregulated advisers from using the island as a first stop in a pension-busting scam.

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.