Firms in the recognised overseas pensions field are experiencing an increase in referrals of business, largely in light of the at-retirement reforms and concerns over the pension age test rules that have been applied to these overseas schemes.
Under the pension age test, schemes are required to assert that savers are not able to access funds before the age of 55, except in cases of extreme ill-health, in line with UK law.
Failure to do so means ‘transfers in’ are treated as unauthorised payments and schemes will be hit with a retrospective 55 per cent tax charge.
Geraint Davies, founder and managing director of overseas pension adviser Montfort International, said that his business had witnessed 500 referrals of new business, of which about 60 had “come in so far”.
He said this was a five-fold increase on usual volumes of business, with the proportion of advisers coming to Montfort International doubling.
“They are coming in dribs and drabs as people realise they’ve got a problem on their hands.”
Referrals had been picking up since HM Revenue and Customs sent its second letter to confirm that Australian Treasury that Australian superannuation funds no longer comply with its rules under the pension age test for them to remain Rops.
Mr Davies commented: “UK financial advisers now realise that this is a specialist line of work - unless you do it all the time you won’t know the issues.”
Adam Wrench, head of product development at London and Colonial, said that the business had experienced an increase in Rops-related enquiries for a number of reasons.
He said these were the introduction of the UK pension freedoms, Qrops jurisdictions that allow the new pension freedoms, Australia, New Zealand and others being de-listed from the Rops list and the fact that the Qrops list has now become the Rops list.
Mr Wrench said: “Interestingly, as a result most of these enquiries have not led to a marked increase in Qrops business, but actually led to an increase in non-resident Sipps instead.
“Non-UK residents are being advised to move to a holding pattern within the safety blanket of a UK Sipp, at least until the Qrops industry has worked through the recent changes.”
As a result, the message for advisers remains the same, in that they should find some comfort dealing with pension trustee firms that have access to Sipp, Ssas, Qrops and Qnups all under the same roof, according to Mr Wrench.
“Access to the widest range of pension wrappers will help advisers facilitate moving their clients seamlessly between pension wrappers as and when changing circumstances require.”
ruth.gillbe@ft.com
