Transferring a UK pension to an Irish QROPS - what was your experience?

[PandPs]

Hey,

I've got a DC pension in the UK with a transfer value of £100k+ that I'd like to transfer to a QROPS scheme in Ireland since that's where I now live and where I'll retire. The AMC of that pension in the UK is 1% so would like to lower that. I'd also like to remove the risk of changes in pension or tax laws in the UK or Ireland resulting in me being locked out of my UK pension or having to pay additional tax on it.

It looks like going through a financial advisor is the only option. I've contacted the Standard Life's Direct Clients team but they won't do QROPS transfer direct. They require a financial advisor for this. Also tried Gerard at execution-only.ie but no dice - he doesn't do QROPS.

Finding advisors who do QROPS isn't hard - Google gives me plenty. But none of them have a transparent fee schedule, plan details and AMC on their website. It's going to be a long slog to contact them all and find out which one offers the lowest fees.

To those here who have done this, I'd really appreciate if you could let me know what your experience was. And in particular:

• Which advisor / broker did you use?
• What was their fee (if any)?
• What plan did they setup for you?
• What AMC did you get?

I'll also share what I learn here as and when I get answers from the people I contact.

 

[Marc]

A word of warning.

U.K. to Ireland pension transfers are really complicated.

I’m a Chartered Financial Planner in the U.K. which is the Gold Standard for advice in the UK.

In Ireland I’m a Qualified Financial Adviser (QFA) and Certified Financial Planner Professional (CFP)

I have over 30 years financial planning experience and have worked as a financial planner on both sides of the Irish Sea.

I have personally transferred my own U.K. pensions to Ireland.

I find this subject complex and fraught with traps for the unwary.

So, I would never take on such complicated and time consuming work at the lowest possible cost.

For example; the rules changed again in April this year

Overseas Transfer Allowance – this replaces BCE 8 under the old regime (transferring to QROPS - qualifying recognised overseas pension scheme). The starting point is that the allowance is set at the same amount as the LSADBA and so will be used in the same way for PCLS and UFPLS payments, etc., but will also be used when a client transfers benefits to QROPS - qualifying recognised overseas pension scheme. Benefits can be transferred tax free if they are within the allowance but they will be taxable at 25% where it has been exceeded (as they would under the old LTA regime).

 

[PandPs]

Thanks @Marc

Here, we’re talking about a DC pension worth just over £100k, so well under any limit, old or new. It’s being transferred to Ireland, which is my country of residence and also where I’ll retire so no tax on transfer as per the rules published by the U.K. government on their gov.uk site. And I want it transferred to an approved QROPS as per the list published on that same gov.uk site. A Standard Life Synergy PRSA would do just fine for example.

I won’t leave Ireland and I’ll also have stoped being a U.K. tax resident for well over 10 years by the time I retire. So no UK tax or HMRC reporting requirement at retirement.

I’d be interested to hear where the complexity is and what exactly a higher cost would give me here because I don’t understand what the value is in practice.

 

[Kev1964]

Thanks @Marc

Here, we’re talking about a DC pension worth just over £100k, so well under any limit, old or new. It’s being transferred to Ireland, which is my country of residence and also where I’ll retire so no tax on transfer as per the rules published by the U.K. government on their gov.uk site. And I want it transferred to an approved QROPS as per the list published on that same gov.uk site. A Standard Life Synergy PRSA would do just fine for example.

I won’t leave Ireland and I’ll also have stoped being a U.K. tax resident for well over 10 years by the time I retire. So no UK tax or HMRC reporting requirement at retirement.

I’d be interested to hear where the complexity is and what exactly a higher cost would give me here because I don’t understand what the value is in practice.

Hi there. I have a UK DB scheme and some years ago I was pro-actively approached by a UK pensions intermediary based on my Linked In profile showing UK employment. They were able to establish that the transfer value was something in excess of 30 times the annual benefit which was attractive at the time. They were suggesting re-investing in the UK. During subsequent ruminations I discovered the QROPS option allowing me to transfer the lump sum to Ireland.

One of the hoops that I would have had to jump through was to have a UK based financial advisor give me “financial advice” to ensure I understood what I was doing. I was being quoted several thousands in sterling for what was effectively a questionnaire. This along with inertia and some wariness on my part resulted in me not proceeding. I do however thank this encounter for making me aware of the UK state pension opportunity years before it became widely known.

During my period of reflection I did speak with an advisor working directly for Zurich who was able to handle a QROPs application. I can’t recall the charges being quoted but I don’t recall thinking they were excessive at the time. Zurich seem to have a good name on here and as long as you are dealing with an authorised and reputable provider I don’t see the problem focussing on costs and charges.

If you want the advisor’s name please PM me (assuming that’s not breaking any forum rules).

 

[PandPs]

Thanks

If you want the advisor’s name please PM me (assuming that’s not breaking any forum rules).

Thanks a lot for the offer @Kev1964. I couldn't see anything in the posting rules that make this an issue. Since I'm a new user however, I cannot send PMs. It'll be a month before I'm allowed to send PMs. I can receive them however so would really appreciate if you could PM me the advisor's name so I can contact them. Thanks!

 

[Cameo]

I’m in the same boat as you with a pot of about £90k, have the forms from the administrator but haven’t done anything more yet.
Was going to reach out to an advisor I’ve used for a few things over the years and see what he comes back with, I’m kind if hoping 1k on an execution only basis but that’s probably wishful thinking on my part.

 

[Cameo]

During my period of reflection I did speak with an advisor working directly for Zurich who was able to handle a QROPs application. I can’t recall the charges being quoted but I don’t recall thinking they were excessive at the time. Zurich seem to have a good name on here and as long as you are dealing with an authorised and reputable provider I don’t see the problem focussing on costs and charges.

The issue with dealing with a provider directly is you’re paying the commission as if you were dealing with an advisor, you’d easily swallow 4%-5% in initial fees. The disclosure mightn’t make it very obvious this is what you’re paying. Some might be happy to pay for advice. For me it’s mostly a process of form filling and returning that I’d prefer not to pay 4K or 5k for that

 

[PandPs]

I've now contacted 10 11 financial advisors I've found on Google that claim to handle transfers of UK pensions to an Irish QROPS and that are listed on brokersireland.ie. Namely:

Greenway
Pension Advice
Opes
Smart Financial
MyPension
Imperius
Covermore
Irish Pensions
Guardian
True wealth
Zurich Direct (Pat Murphy)

What I've asked all of them:
- I'm an Irish resident in my 40s.
- I have a DC pension in the UK with <major UK pension provider> with a transfer value of £1xx,xxx.
- I'd like it transferred to a QROPS in Ireland. Preferably a PRSA but will consider a BoB.

I'd like to know:
- Which account they'll open with which provider
- What the AMC will be inclusive of all fees, charges and commission assuming the funds are fully invested in a passively managed index fund tracking the MSCI World (or a similar global equity index).
- What other fees do they charge (if any) for a QROPS transfer.

The results
6 have answered so far (i.e. within a day)

I've been pleasantly surprised by the replies. I expected a lot of bullshit of wasted time. While it did happen with a couple of advisors, most actually provided clear and straight answers to all my questions and didn't waste my time.

Summary of the offers

• Zurich and Standard Life are the only QROPS providers left in Ireland. So that's who everyone works with.
• Some advisors would only open a Buy Out Bond for some reason. But most are happy to open either a BoB or a PRSA.
• Typical fee structure is: €0 setup fee + AMC ranging from 0.75% to 1% (inclusive of the fund management charge for a passively managed index fund) + no other fees.
• A couple of advisors also offered an alternative fee structure: one-off setup fee of 2% or 3% of the fund value + lower AMC (e.g. 0.5%). If you do the math, that arrangement is typically the better one over the long term.

Process

1. I need to request an International Transfer Options Statement (or pack) to my UK provider ("international" is the key word here). This could take a day or longer to get issued depending on the provider.
2. I then send that to the broker and they take care of the paperwork - there's a lot of it.
3. Full process takes 6 weeks to 4 months depending on how quickly the UK provider gets their act together.

Details of the offers

Guardian Wealth

• Clear and straight answers to all my questions by email.
• Standard Life - either BoB or PRSA
• AMC 0.95% for a passively managed index fund
• They normally charge an additional ongoing fee of 0.5% / year to manage the funds but would waive this since I don't require ongoing management.
• No other fees.
• Alternatively, they can charge a one-of setup fee of 3% but a lower AMC of 0.5%.

Irish Pensions

• Wanted a call which I was not keen on. But provided clear and straight answers to all my questions on the phone and didn't waste a single second of my time. Quite impressed.
• Works with both Zurich and Standard Life. Both BoB and PRSA.
• AMC 0.75% for a passively-managed index fund (e.g. S&P 500) but varies depending on the fund.
• No other fees.

MyPension

• Also wanted a call. But also provided clear and straight answers to all my questions on the phone albeit in a more long-winded manner. Still, very pleasant to talk to and very helpful.
• Typically works with Standard Life. Can do BoB or PRSA.
• AMC 1%.
• No other fees.
• Can do a lower AMC (unspecified) but will charge a one-off 2% setup fee in this case.

Pension Advice

• Clear and straight answers by email.
• Works with both Zurich and Standard Life. Both BoB and PRSA.
• AMC is whatever the pension provider publishes. E.g. for Standard Life, 0.9% for some of their passively-managed index fund (or up to 1.3% for some of their other funds).
• No other fees.

Smart Financial

• Initially wanted me to fill-in a 6-page "fact find" form and get on a call before providing any answers.
  • Tip to financial advisors: when I come to you with a precise and specific ask and when I provide you with all the info you need upfront, answer my questions. Don't waste my time asking me to fill in pages and pages of irrelevant information.
• When pushed, answered a few questions by email but remained vague and not super helpful.
• Work with both Zurich and Standard Life but only opens BoB, not PRSA for some reason.
• AMC between 1% and 1.5%.
• Possible discount of 0.25% to 0.5% if I don't require ongoing advice.

Opes

• Didn't answer any of my questions
• Insist on doing a full pension plan, not just a QROPS transfer.
• Stated that they "offer a fee structure with clear and transparent pricing for all our clients" but then proceeded to provide a fee structure that was the exact opposite of clear and transparent.
• They insist on managing your funds for you. They won't let me just invest into a passively-managed index fund tracking the global equity market.
• Fees:
  • Planning fee: between €1,200 and €1,850 + VAT
  • Setup fee: up to 4% of fund value
  • Ongoing fee: up to 0.5% / year (presumably on top of the pension provider's AMC - although that was unclear)
• Back of the napkin calculation shows that their service would cost me in the region of €45,000 on this pension over 15 years. Pretty mental.

 

[PandPs]

OK, got 6 answers so far. I've edited my post above with the details of the offers I've got so far if you're interested.

 

[Raskolnikov]

I was in a very similar situation to you awhile back, moving to Ireland with a DC occupational pension that was in the UK. Instead of moving the pension out of the UK and into Ireland, I left it in the UK and moved it to a SIPP (self invested pension plan).

I chose AJ Bell as the provider, not the absolute cheapest but a large well known and reputable company. They charge a flat rate of £10 a month (a 0.12% charge on a £100k pot), and I am free to choose my own ETF's and individual shares. The platform is excellent, I can invest in practically anything and dealing costs are very low (£5 a trade) and you can set it up so dividends are automatically re-invested with a minimal fee.

Transferring the pension to a SIPP involved the completion of a form and a half hour call (no charge). The transfer from my occupational pension took just over a month. I didn't incur any fees or setup costs to transfer the pension.

I'd also like to remove the risk of changes in pension or tax laws in the UK or Ireland resulting in me being locked out of my UK pension or having to pay additional tax on it.

Pension access ages between Ireland and the UK have generally moved closely together. Also, we have a dual-taxation treaty. There are thousands of people who are receiving pensions across the two jurisdictions. It's highly, highly unlikely that someone is going to rip up the status quo after 100 years.

 

[PandPs]

Pension access ages between Ireland and the UK have generally moved closely together. Also, we have a dual-taxation treaty. There are thousands of people who are receiving pensions across the two jurisdictions. It's highly, highly unlikely that someone is going to rip up the status quo after 100 years.

For sure. I wouldn’t make a blanket recommendation to move a uk pension out. In fact, we’re keeping two small pots in the UK. In part because they offer better benefits / lower fees than anything we’d be able to get in Ireland. And in part because they’re small enough that, even in the absoute worst case scenario of loosing them, it wouldn’t have a big impact on our pension plans.

The one we’re moving is one that will be a big chunk of our pension and that’s currently stuck in plan with a 1% AMC.

That being said, it’s also important not to ignore the risks of keeping a pension in the U.K, which are very real. The U.K. (and other countries…) have shown in recent years how what we take for granted can be undone very quickly. Even when it seems to make no sense.

When it comes to pensions, the U.K. has gradually tightened up the rules in recent years after Brexit. Much of it was aimed at closing dodgy tax-avoidance schemes in Malta and other tax havens. But some are affecting regular people too.

One example are the SIPPs you mentioned. Up until recently, it was still possible for non-residents to open a SIPP with e.g. AJ Bell or Hargreaves Lansdown - even after Brexit. As I’ve learned the hard way, this is no longer the case. If you’re not a U.K. resident, you cannot open a new regular SIPP in the U.K anymore. That’s over. And I can’t see it coming back.

If you’re no longer a U.K. resident and have a pension stuck in a poor plan in the U.K., your only option is to open an International SIPP with providers like MyExpat or Invinitive, which have much higher fees and are largely unknown entities. Or move it out to a QROPS.

Just one of the paper cuts that keep on coming.

BTW, if anyone reading this is about to leave the UK but is still a resident: make it a priority to move your UK pensions to a SIPP with lower fees like AJ Bell, Vanguard or Interactive Investor unless your pension already has super low fees or provides additional benefits. Unlike the deeply messed-up Irish pension system where all providers charge astronomical fees and require going through middle men to sign up, in the U.K. you can sign up direct and transfer your pension in minutes plus get fees an order of magnitude lower than what you’d get in Ireland.

 

[Cameo]

Th

Irish Pensions

• Wanted a call which I was not keen on. But provided clear and straight answers to all my questions on the phone and didn't waste a single second of my time. Quite impressed.
• Works with both Zurich and Standard Life. Both BoB and PRSA.
• AMC 0.75% for a passively-managed index fund (e.g. S&P 500) but varies depending on the fund.
• No other fees.

My normal guy told me it’s too much hassle so might try this crowd, amc is shocking. I’m thinking I’ll immediately covert into an arf and take tax free cash so prsa or bob will be temporary arrangement in any case

 

[Marc]

’m thinking I’ll immediately covert into an arc and take tax free cash so prsa or bob will be temporary arrangement in any case

This is one of the complexities I referred to earlier.

If you move benefits out of the QROPs within 5 years of transfer you pay a 25% tax charge to HMRC. An ARF is not a QROPs so that would trigger an avoidable tax charge.

 

[Cameo]

This is one of the complexities I referred to earlier.

If you move benefits out of the QROPs within 5 years of transfer you pay a 25% tax charge to HMRC. An ARF is not a QROPs so that would trigger an avoidable tax charge.

Seems bizarre rule because
as im 55 if i lived in uk i could access benefits now and
I would have thought I'd be subject to irish tax rules only once i moved into an irish fund

I assume the onus would be on me to declare to HMRC or would the pension provider?

Surely i could put in a prsa say (qrops) amd then transfer to another one and then take 25% with remainder going to ARF

A lot of form filling im thinking no matter what

 

[Marc]

You have just proved the point of my earlier post

Marc Westlake CFP, TEP, APFS, QFA, EFP
Chartered, Certified and European Financial Planner
Registered Trust & Estate Practitioner
Everlake

 

[ClubMan]

I’m thinking I’ll immediately covert into an arf and take tax free cash so prsa or bob will be temporary arrangement in any case

Isn't a vested PRSA an option instead of PRSA then ARF thereby avoiding some of the additional form filling/bureaucracy?

 

[Cameo]

Isn't a vested PRSA an option instead of PRSA then ARF thereby avoiding some of the additional form filling/bureaucracy?

I wasnt aware there was suvhch a thing, tell me more

Other option is i am thinking is maybe just cash it im the the uk. I'm assuming i would get tax free cash if 25% and pay UK tax on the balance

 

[ClubMan]

I wasnt aware there was suvhch a thing, tell me more

A vested PRSA is simply a PRSA from which you are drawing down retirement benefits - e.g. 25% tax free lump sum and leaving the remaining 75% invested in a suitable fund (some may choose cash to lock in value) from which you can take an ongoing income. Some info here:

Vested PRSA Vs ARF - whats the difference?

While reading Irish Lifes Standard PRSA Policy guide - options available on retirement i saw these among the options.... " Leave the fund in the PRSA taking withdrawals as you want or Invest in an ARF taking withdrawals as you want." What are the benefits of choosing the Vested PRSA over an...

www.askaboutmoney.com

It obviates the need to switch from the original PRSA to an ARF for example. You can also split a PRSA into different smaller contracts if you want more flexibility over how and when you draw down benefits and so it's not a one time only "big bang" event.

 

[PandPs]

As with all things related to pension and tax, I’d strongly suggest doing your own thorough research upfront. There’s nothing particularly complex here but there are *a lot* of rules. And one mistake can cost you more than half of your pension pot - which you may not be able to ever get back.

When it comes to transferring a pension from the UK to Ireland using the QROPS process, you’ll need to carefully review:

• The guidance provided by HMRC
• The guidance provided by the Irish Revenue
• The guidance provided by pension companies in both the U.K. and Ireland. In the U.K., Royal London has a very comprehensive guide, including links to all the relevant HMRC manuals. In Ireland, Standard Life has a neat summary of the main key points.

There’s a few hours of reading and learning here to do before you can assess whether it’s worth pursuing for you.

A few key points here:

• Do NOT ask ChatGPT or any other LLM about this. And obviously, ignore any “AI answer” from Google or any other search engine. For the benefit of science, I have teased ChatGPT about that topic. At best, I go mostly correct answers with subtle but critical mistakes. And quite a few times, I got non-sense.
• The rules about overseas pension transfers and ROPS/QROPS have changed several times, including very recently. Stick to official guidance and check the date of any document you read.
• There are a bunch of articles, blog posts and videos out there about the QROPS process created both by regulated financial advisors and by randomers on the internet (“influencers”). Ignore them.

And when it comes to financial advisors, as always with anything related to pension or tax: trust but verify.

As I mentioned above, I contacted 10 regulated financial advisors who all claimed to be experts of QROPS transfers from the U.K. to Ireland. One of them provided me with information that was clearly wrong in the QROPS context as he didn’t take into account one of the additional constraints that HMRC imposes on pension funds that were transferred from the U.K. (that wouldn’t apply to pensions that were built up in Ireland). He corrected it later on in a follow up email.

I’m not naming names here because he was really helpful otherwise and honest mistakes do happen. But I’m mentioning that to highlight the importance of taking the time to learn. When it comes to something as life-changing as your pension arrangements, the few hours of work you put in pay off by many orders of magnitude.

 

[jeremyr62]

I'm in the same boat. A UK private pension I started in 1989 then stopped contributing to in 1992 with Equitable Life (oh dear) when I moved to Ireland for work. Its now worth about GBP 90K. I found one company in the UK that was flexible and would allow annuity purchase or flexible drawdown and pay into a UK or Irish bank account. I also asked AJ Bell and they couldn't help. Anyway the company I have it with now is called ISIPP based in Sale, Greater Manchester. I just have it invested for now. I considered transferring it but was overwhelmed by the complexity.