Using a QROPS or SIPP to provide for your family:
UK annuities usually end when the recipient dies, and do not leave any extra money for the family or beneficiaries. It is possible to arrange one that will continue paying after your death, but it would increase the cost and reduce your income.
With a QROPS or SIPP, on the other hand, since you don’t need to buy an annuity, your fund won’t vanish when you die. Instead, you can pass it on to your loved ones.
Colin, 45, and Gill, 44, have decided to sell their small business and move to a villa in France. While discussing how to invest the proceeds of the sale the become aware of the potential impact of UK inheritance tax. Their financial adviser points out that they could use a QROP pension to switch their UK pensions overseas and help support their claim for losing their UK domicile, which would reduce the chances of being caught by UK inheritance tax. Their QROP pension also means that the funds left in their pension fund after they’ve both died can be distributed to their family rather than defaulting to an annuity provider.
Harrison Brook helping you make the best choices:
UK pension transfers are a growing market, and new QROPS/SIPP providers are appearing regularly. Talk to a financial adviser to make sure you choose the most appropriate jurisdiction and QROPS or SIPP provider for your needs. Additionally your SIPP or QROPS will include different kinds of investments, it is crucial to speak to a financial adviser to match your investment portfolio to your risk profile and growth expectations.