ASP penalties push QROPS transfers

Almost half a billion pounds of pension funds were transferred abroad in the first two years after pensions simplification to escape alternatively secured pension tax penalties, A J Bell says.

As part of a Freedom of Information request, the self-invested personal pension provider found more than 7300 transfers to qualifying recognised overseas pension schemes were made in the two years after A-Day - equating to more than three times the number of clients who entered an ASP.

Chief executive Andy Bell says: "These figures support our campaign for a change in the 82% tax penalty applied on death in ASP. The introduction of this tax penalty in April 2007 resulted in a 154% increase in the amount transferred to QROPS versus the previous year."

He says this is proof that penal tax charges only encourage distorting behaviour at a significant cost to the Exchequer.

However, he says this was just one of the ways in which people were evading this tax charge.

"The few who can afford to simply move offshore or pay the fees associated with the available onshore structures," he adds.