QROPS stands for Qualifying Recognised Overseas Pension Scheme. It's an overseas pension scheme that meets HMRC requirements, allowing you to transfer your UK pension abroad. QROPS were introduced in 2006 under the Finance Act to allow people who had left the UK permanently to move their pension savings to a scheme in their new country of residence. The receiving scheme must be recognised by HMRC and appear on or meet the conditions of the HMRC published list. QROPS can accept transfers from most UK defined contribution pensions, and some defined benefit schemes will also allow transfers.

Do I pay tax on a QROPS transfer?

If you transfer to a QROPS in the country where you're tax resident, or to a QROPS in another EEA/qualifying country, there's normally no Overseas Transfer Charge (OTC). However, if you transfer to a QROPS in a country where you're NOT tax resident and it's not in a qualifying jurisdiction, you may face a 25% Overseas Transfer Charge on the whole transfer value. Since April 2017, GMP (Guaranteed Minimum Pension) elements generally cannot be transferred to QROPS. You should also consider the tax regime of the receiving country — some countries tax pension income more heavily than the UK.

Is a QROPS a good idea?

A QROPS can be beneficial if: you've permanently left the UK and live in a country with favourable pension tax treatment, you want to consolidate your pensions in one jurisdiction, you want to avoid UK income tax on pension withdrawals, or your new country's pension rules offer more flexibility. However, it's NOT always advisable: transfer charges can be significant, you lose UK pension protections (FSCS, FOS, PPF), the receiving scheme may have higher fees, and tax advantages vary hugely by country. It's complex — always get advice from both a UK-qualified and locally qualified financial adviser.

Can I transfer my State Pension to a QROPS?

No. You cannot transfer the UK State Pension to a QROPS or any other scheme. The State Pension is a government benefit, not a private pension fund. If you live abroad, your State Pension is still paid to you — but whether it increases annually depends on which country you live in. If you live in an EEA country, Switzerland, or a country with a reciprocal social security agreement, your State Pension is uprated each year. If you live in certain other countries (including Australia, Canada, and New Zealand), it's frozen at the rate when you left the UK.

QROPS Guide UK — Overseas Pension Transfers Explained | PocketWise

QROPS let UK expats transfer their pension savings overseas. Here’s how they work, the tax implications, and whether it makes sense.

At a Glance

Feature	Detail
What it stands for	Qualifying Recognised Overseas Pension Scheme
What it does	Allows transfer of UK pension savings to an overseas pension scheme
Who it’s for	People who have permanently left the UK
Tax charge	25% Overseas Transfer Charge may apply (depending on jurisdiction)
HMRC reporting	Scheme must report to HMRC for 10 years after transfer
Minimum age to access	Depends on the receiving country’s rules (UK minimum is currently 57 from 2028)
State Pension transferable?	No

How QROPS Work

Step	Detail
1	You leave the UK permanently and become tax resident in another country
2	You find a QROPS in your new country (or a qualifying jurisdiction)
3	You request a transfer from your UK pension provider
4	UK provider checks the receiving scheme is a recognised QROPS
5	Transfer is made — may take 8–16 weeks
6	HMRC is notified and the QROPS must report to HMRC for 10 years
7	You access your pension under the rules of the QROPS country

The Overseas Transfer Charge (OTC)

Scenario	OTC rate
Transfer to a QROPS in the same country where you’re tax resident	0%
Transfer to a QROPS in another EEA country (and you’re EEA resident)	0%
Transfer to a QROPS in a country with a qualifying double tax treaty	0%
Transfer to a QROPS in a country where you’re NOT tax resident and no qualifying exemption	25% of the transfer value

The OTC must be paid before the transfer is completed. If your circumstances change within 5 years (e.g., you move to the QROPS country), you can apply for a refund.

Who Might Benefit

Situation	Potential benefit
Permanently living in a low-tax country	May pay less tax on pension income than in the UK
Want to consolidate pensions	One pension in your country of residence instead of multiple UK pensions
Currency matching	Pension income in local currency avoids exchange rate risk
More flexible access rules	Some countries allow earlier or more flexible access
Estate planning	Some jurisdictions have more favourable pension inheritance rules
Avoiding UK Lifetime Allowance	LTA was abolished in 2024, so this is no longer a driver

Who Should Probably NOT Transfer

Situation	Why
Still living in the UK	No benefit — and 25% OTC would apply if you later move to a non-qualifying country
Defined benefit (final salary) pension	Giving up guaranteed income for a transfer value is rarely worthwhile
High fees on the QROPS	Some QROPS charge 1.5–3% per year — significantly more than UK pensions
Moving to a high-tax country	May pay MORE tax on pension income than in the UK
Small pension pot	Transfer costs and fees may not be justified
Planning to return to the UK	Transfer may need to come back — additional costs and complications
GMP (Guaranteed Minimum Pension) element	Generally cannot be transferred to QROPS since April 2017

Tax Considerations by Country

Country	Key considerations
EU/EEA countries	No OTC if you’re resident. Local tax rules apply to income withdrawals
Australia	QROPS transfers to Australian super possible but taxed on entry. Frozen State Pension
USA	Very few US-based QROPS available. Complex tax treaty rules. IRS reporting requirements
UAE / Gulf states	No personal income tax — attractive for pension income. Limited local QROPS
Malta	Popular QROPS jurisdiction. 15% tax on pension income is common
Gibraltar	UK-adjacent, attractive tax rates. Common QROPS destination
New Zealand	Can transfer to NZ KiwiSaver equivalent. Frozen State Pension
South Africa	Some QROPS available. Exchange control rules apply

Tax rules change frequently. Always get up-to-date advice specific to your situation.

Costs

Fee type	Typical amount
UK pension exit fee	Usually £0 (banned for post-2017 pensions, but older schemes may charge)
QROPS set-up fee	£500–£2,000
Annual management fee	0.5–2.0% of fund value
Overseas Transfer Charge (if applicable)	25% of transfer value
Financial adviser fee	£2,000–£5,000+ (for both UK and overseas advice)
Currency conversion	Spread of 0.3–1.5%

Risks

Risk	Detail
25% tax charge	If you transfer to the wrong jurisdiction or move countries within 5 years
Higher fees	QROPS annual charges are often significantly higher than UK pensions
Loss of UK protections	No FSCS protection, no Financial Ombudsman, no Pension Protection Fund
Scam risk	Pension scams are common when transferring overseas — only use FCA-regulated advisers
Currency risk	Fund value fluctuates with exchange rates
Regulatory change	HMRC or the receiving country can change QROPS rules
HMRC reporting obligations	The QROPS must report to HMRC for 10 years — non-compliance can trigger penalties
Irreversibility	Once transferred, bringing the pension back to the UK is complex and may not be possible

Due Diligence Checklist

Check	Detail
Is the scheme on HMRC’s QROPS list?	Check on HMRC’s published list or get written confirmation
Is the financial adviser FCA-regulated?	Check on the FCA register
Do you have advice from both UK and local advisers?	Essential for understanding tax in both jurisdictions
Have you compared fees?	Compare QROPS annual charges with keeping the pension in the UK
Do you understand the OTC position?	Confirm whether the 25% charge applies
Have you checked GMP restrictions?	GMP elements generally can’t be transferred
Is the receiving scheme regulated in its jurisdiction?	Check with the local regulator
Have you considered the exchange rate?	Factor in currency risk

Alternatives to QROPS

Alternative	Detail
Keep pension in the UK	Draw income from the UK — may be simplest and lowest cost
International SIPP	A UK SIPP that allows overseas investments and multi-currency — retains UK protections
Section 32 buy-out	Transfer to a UK insurance-based pension — retains FSCS protection
Draw and remit	Keep pension in UK, draw income, and transfer cash to your overseas bank account