Some of the benefits include:
Early access to your pension
The earliest you are able to access your NHS pension is at the age of 60 (or 65 if you joined the NHS after 2008). Until then your NHS pension is frozen, and you are unable to either draw down a tax free lump sum, or to receive an income. Compare with this with a QROPS, where you can start to draw an income as early as 50 (depending on the scheme and jurisdiction chosen).
Pass on your pension to your loved ones
With an NHS pension, after you die, your spouse only receives half of your pension payments. And then, after he or she passes away, the payments stop completely, and your children receive nothing. However with a QROPS plan in India, your beneficiaries keep the entire pension pot after you die.
Take a bigger tax free lump sum
Under UK pension rules, you are only permitted to take a 25% tax free lump sum from your pension at retirement. However under QROPS rules, you can take a higher amount – 30% in Gibraltar, 33% in India, and as much as 40% in some other jurisdictions (depending on your individual circumstances – please speak to an adviser for more details).
Take control over your pension fund
One of the biggest advantages that a QROPS can offer is that once the funds have been transferred from the NHS scheme into your QROPS plan, you maintain complete control over how those funds are invested. There is no uncertainty over whether the NHS will change the pension rules, or reduce payments – you know exactly how much your fund is worth, no-one can take that away from you, and you can invest your pension in exactly what YOU want.
QROPS Schemes in India – an Introduction
Ever since 2006 it has become possible for doctors, nurses and other healthcare professionals returning to India from the UK to transfer their NHS pension into an overseas pension scheme, known as a ‘QROPS’, or ‘Qualifying Recognised Overseas Pension Scheme’. And since this time, thousands of Indian residents have taken advantage of this opportunity, and transferred their NHS pension to a QROPs.
What is the best QROPS Scheme in India?
There is no right answer to this question – it will depend on your individual circumstances. In the first instance, a key factor is the size of your pension pot. Secondly, it will depend on what on your financial goals and objectives for your pension. For example, are looking to maximise the size of your tax free lump sum – or to maximise the income you want each month from your pension. Each of these factors needs to be considered to advise you on the right QROPS solution for you.
Indian QROPS Schemes:
There are several locally based Indian QROPS plans an investor can choose from, the most popular are the following schemes:
ICICI Prudential – Immediate Annuity Plan
SBI Life – Annuity Plus Plan
HDFC Life – Immediate Annuity Plan
ING Vysya – Golden Years Retirement Plan
Overseas QROPS Schemes:
In addition to offering local QROPS schemes, QROPS Adviser can offer Indian residents better performing overseas QROPS schemes - plans which can offer clients higher investment returns, larger incomes, larger tax free lump sums, and various tax planning benefits.
As a completely independent company, we can offer QROPS advice in India on the following schemes, providers and jurisdictions:
QROPS Providers: Sovereign, Brooklands, Momentum, STM Group
Investment plans / bond providers: Generali, Cornhill, Royal London 360, Skandia
Jurisdictions: Isle of Man, Gibraltar, Malta, New Zealand
Disadvantages of transferring your NHS pension into an Indian QROPS Scheme
NHS pension members should be aware that a transfer of their pension into an Indian based QROPS scheme may not be the best solution for them. There are several reasons for this:
Low annuity rates - the Indian pension rules require a pension member to purchase an annuity with their pension fund. This is very antiquated and ineffective method of providing for an income in retirement – and is the main reason why so many people with UK pensions actively transfer their UK pension into a QROPS scheme – too expressly avoid this requirement.
The investment return on an annuity are very low, and a much higher level of income can be achieved by investing your pension fund within an overseas QROPS.
Investment returns – during the stock market boom in India of recent years, the insurance companies were offering relatively high returns of 7%, 8% or even 9% on the QROPS pension fund from an NHS pension transfer. However, recently these returns are reducing – as a result of the drop in the Indian stock market. Consequently, the pension fund values of these Indian QROPS are suffering from a lack of diversification that a well-balanced investment portfolio should have.
The investment returns on an overseas QROPS scheme will generally be higher, as the investor has the choice of literally thousands of different investment funds, and this diversification will ensure that an investor will achieve their desired level of return, according to their risk profile.
Choose your currency of your pension – with Indian QROPS, your pension will be paid in rupees. However, with an overseas QROPS scheme, you can choose from a greater variety of currencies. This is especially important in recent times, as the Indian Rupee has lost more than 30% of it’s value in the last 12 months.
How to I Transfer my NHS pension into a QROPS pension plan in India?
The following is a brief description of the process involved in transferring your NHS pension into a QROPS plan for residents of India:
- The first stage is to get an up to date transfer value for your NHS pension. QROPS Adviser will arrange this for you.
- Secondly, once the transfer value has been received, your dedicated financial adviser will discuss with you the most appropriate QROPS plan for you, after assessing your financial needs and objectives.
- The paperwork is then completed, in order to establish your QROPS plan, and transfer the funds from the NHS pension scheme into your chosen QROPS plan.
The whole process takes between 6 weeks and 3 months, depending on how quickly the NHS pension scheme administrator processes the paperwork.
Why Choose QROPS Adviser Group to assist with your NHS Pension Transfer?
QROPS Adviser Group are a completely independent firm of financial advisers who have been advising clients on transferring their NHS pension into QROPS schemes since 2008. With offices in India and in Europe, we can help you find the right QROPS pension solution for your NHS pension.
Contact us for a FREE, no obligation consultation
To find out more about how to transfer your NHS pension into a QROPS scheme in India, please contact us using one of the methods below:
QROPS Adviser Group
Email: info@qropsadviser.net
Tel: + 34 647 316 898 (European Headquarters)
Tel: + 91 80 4911 6687 (Bangalore office)
Skype: qropsadviser
Website: www.qropsadviser.net (Group website)
Website: www.qropsadviser.in (Returning NRI website)
