Beware ‘unsolicited’ overseas activity – Pension Life
Specialists have urged advisers to be wary of overseas activities that are targeting consumers’ UK pension money under the new pension rules.
Chris Lean, a technical adviser on pensions and adviser compliance working with Pension Life, which aims to publicise the dangers of bad advice, said he was concerned about groups that appeared to be targeting UK pensions following the introduction of flexibilities.
He said: “I think people are lining up to get hold of UK pension money.”
One YouTube video, on behalf of Kastle Offshore, explains how to transfer a UK pension into a qualifying recognised overseas pension scheme (Qrops) under the pension rules introduced on 6 April.
In the video, viewers are asked: “Do you have a UK pension and live abroad? Have you ever considered a Qrops? Well, the time has never been better to transfer your UK pension into a Malta Qrops.”
Malta’s Financial Services Authority has recently amended local regulations in favour of Qrops following the new flexible access pension rules in the UK.
The video said: “This means all retirement savers from the age of just 55 years old who transfer their UK pensions into a Malta Qrops can now effectively take up to a 100 per cent lump sum withdrawal from their offshore pension and spend the money how they wish – a major increase from the original 30 per cent lump sum.”
There is no suggestion that Kastle Offshore is involved in anything illegal. However, Mr Lean claimed there would be no need to transfer if a UK scheme offered lump sum withdrawals anyway.
The video did not mention any tax liabilities or fee payments.
James McLeod, head of pensions at AES International, warned: “Pensioners based overseas, or who are planning to retire in the sun, need to be careful about what they do with their precious retirement savings.”
Right to reply
Martin Aram, senior financial adviser for Kastle Offshore, said: “The reason for the video is to give people living outside the UK information on Qrops and inform them of the recent amendments.
“We are not saying that it is right or wrong to use Qrops. With all clients we do a full suitability report and go through the pros and cons.
“The Qrops transfer is done for free, with a yearly £320 trustee fee. We receive commission on investment advice once the funds have been transferred and invested, in large, well-regulated institutions, generally in the Isle of Man.
“There is a HMRC list of approved Qrops. I do not know how a UK pensions provider would pay out without checking with Revenue & Customs and making sure the party concerned was fit for Qrops.”
