UK Government to Ban Transfers from NHS Schemes from 2015
The UK government confirmed on 21 July that as of 5 April 2015, transfers of NHS pensions into QROPS (and other defined contribution schemes) will be prohibited. The government introduced some radical changes to the UK pension regime in the UK Budget in March 2014, in the biggest overhaul of UK pensions rules since the ‘A Day’ changes of 2006, which first introduced the QROPS regime. One of these changes was to give pension savers much more flexibility in relation to how they can draw down their pension when they retire. In essence the government has given them complete flexibility to spend their pension how they like, when they like, subject to paying tax on their withdrawals at the marginal rate of income tax.
Members of public sector pension schemes hit hard by reforms
Unfortunately, the same flexibility has not been afforded to members of public sector pension schemes, who have found themselves in a worse off position than they were before the government announced the changes.
The government fears that if too many people use their new fund freedom to access their pension all at the same time, this may put a significant burden on the already stretched finances of many public sector pension schemes.
Therefore, as a result, the government have announced that there will be a blanket ban on all transfers out of unfunded public sector schemes, of which the NHS scheme is one.
Advantages of transferring your UK NHS pension into a QROPS in India
There are several benefits of transferring your NHS pension into a QROPS scheme if you have left the NHS to return to India.
Firstly, by transferring into a more flexible overseas QROPS scheme, you retain complete control over your pension fund. Once the funds have been placed into the QROPS, the UK government cannot touch those funds.
And as part of that control, you have increased investment flexibility, and are free to invest in many different types of investments, such as investments in Indian investment funds if you choose.
A further advantage for residents of India of transferring their NHS pension into a QROPS plan is that after they have passed away, the remaining corpus of the pension is available to pass on to their beneficiaries. This can be contrasted with the NHS scheme, where the pension income is reduced by 50% when the scheme member dies, which can impose financial hardship on the surviving spouse. And after the spouse has passed away, there is nothing left at all to leave to the children.
Transfer your NHS pension while you still can!
The good news is that it is not too late to transfer your NHS Pension into a more flexible QROPS scheme. However, it is crucial that you start the process as soon as possible - the NHS pension administrators are already experiencing an increased workload as scheme members rush to complete their transfer before the ban takes effect.
QROPS Adviser Group can help ensure that your NHS pension is transferred across to a suitable QROPS scheme in good time before the April 5 deadline expires. Please contact us at [email protected] or call us on +44 7582 589561 for more information.
About QROPS Adviser Group
QROPS Adviser Group has extensive experience of transferring pensions out of the NHS pension scheme and into QROPS schemes, for both residents of India and other countries.
We are completely independent, and can advise on a wide variety of QROPS pension schemes – we are not tied to any single provider, which means that we will recommend the scheme which meets your exact requirements and needs.
Members of public sector pension schemes hit hard by reforms
Unfortunately, the same flexibility has not been afforded to members of public sector pension schemes, who have found themselves in a worse off position than they were before the government announced the changes.
The government fears that if too many people use their new fund freedom to access their pension all at the same time, this may put a significant burden on the already stretched finances of many public sector pension schemes.
Therefore, as a result, the government have announced that there will be a blanket ban on all transfers out of unfunded public sector schemes, of which the NHS scheme is one.
Advantages of transferring your UK NHS pension into a QROPS in India
There are several benefits of transferring your NHS pension into a QROPS scheme if you have left the NHS to return to India.
Firstly, by transferring into a more flexible overseas QROPS scheme, you retain complete control over your pension fund. Once the funds have been placed into the QROPS, the UK government cannot touch those funds.
And as part of that control, you have increased investment flexibility, and are free to invest in many different types of investments, such as investments in Indian investment funds if you choose.
A further advantage for residents of India of transferring their NHS pension into a QROPS plan is that after they have passed away, the remaining corpus of the pension is available to pass on to their beneficiaries. This can be contrasted with the NHS scheme, where the pension income is reduced by 50% when the scheme member dies, which can impose financial hardship on the surviving spouse. And after the spouse has passed away, there is nothing left at all to leave to the children.
Transfer your NHS pension while you still can!
The good news is that it is not too late to transfer your NHS Pension into a more flexible QROPS scheme. However, it is crucial that you start the process as soon as possible - the NHS pension administrators are already experiencing an increased workload as scheme members rush to complete their transfer before the ban takes effect.
QROPS Adviser Group can help ensure that your NHS pension is transferred across to a suitable QROPS scheme in good time before the April 5 deadline expires. Please contact us at [email protected] or call us on +44 7582 589561 for more information.
About QROPS Adviser Group
QROPS Adviser Group has extensive experience of transferring pensions out of the NHS pension scheme and into QROPS schemes, for both residents of India and other countries.
We are completely independent, and can advise on a wide variety of QROPS pension schemes – we are not tied to any single provider, which means that we will recommend the scheme which meets your exact requirements and needs.