QROPS add up for international workers in the UK

Young people have problems planning for retirement because by the time they leave university and start working, that elusive date for finally giving up work can be 50 years in the future.

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.