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Press comment: Decline of QROPS market continues

31/07/2019

If you are covering the latest HMRC statistics on the QROPS market, please see the following commentary from Quilter tax and financial planning expert, Rachael Griffin:

Rachael Griffin“The decline of the QROPS market continues and despite a small increase in the volume of transfers, the total value was down another 14% in 2018-19, with the average transfer value falling to just under £130,000.

“The market peaked in 2014-15 with more than 20,000 transfers to overseas schemes. The rapid decline in the scale of foreign transfers since then is down to a combination of factors, in particular the drop in defined benefit transfers. Following the introduction of pension freedoms, thousands opted for the flexibility of a personal pension and sought to transfer out, with the overseas market experiencing a ripple effect as a result. DB transfers have since begun to decline in popularity and advice in that area has come under increased scrutiny, with advisers facing increased costs to participate in the DB transfer market.

“In addition, a new 25% tax charge applicable from March 2017 has further discouraged overseas transfers. This was designed to deter transfers to overseas schemes purely for a tax gain. It is also now a requirement for a UK regulated pension adviser to approve the transfer.

“Moving assets into a QROPS can still offer useful flexibility, especially for those people planning to leave the UK permanently that want to simplify their finances by taking their pension with them. At the moment the rules refer to the EEA regarding exemptions from the 25% tax charge, meaning no tax applies on a transfer to another scheme within the EEA. This situation will need to be clarified once the terms of the UK’s departure from Europe are resolved.”

For more information contact

Michael Glenister020 7778 963807469 144535michael.glenister@quilterinvestors.com

Notes to Editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £118.4 billion in investments (as at 30 June 2019).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions; and discretionary fund management.

The business is comprised of two segments: Advice and Wealth Management and Wealth Platforms.

Advice and Wealth Management encompasses the financial advice business, Quilter Financial Planning; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

Wealth Platforms includes Old Mutual Wealth UK platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

The Quilter plc businesses are being re-branded as follows: 

  • Quilter Financial Planning (previously Intrinsic)
  • Quilter Private Client Advisers (previously Old Mutual Wealth Private Client Advisers)
  • Charles Derby Group (becoming Quilter Financial Advisers)
  • Quilter Financial Adviser School
  • Quilter Cheviot
  • Quilter Investors
  • Old Mutual Wealth (becoming Quilter Wealth Solutions in 2020)
  • Old Mutual International (becoming Quilter International in 2020)

This press release is for journalists only and should not be relied upon by financial advisers or customers.

Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.