Advisers predict QROPS sales to rise in 2010

Offshore advisers predict rising sales of Qualifying Registered Overseas Pension Scheme (QROPS) products this year, mainly because income drawn avoids UK tax.

Three-quarters (74%) of advisers polled by Skandia International said they expect to write more QROPS business over the next year, with avoiding UK tax the main reason.

Retirees can use QROPS to consolidate UK pension assets to give flexibility in overseas retirement planning, using a range of investment and currency options.

Wider investment choice within a QROPS was the second most common reason advisers cited for recommending the scheme. The most popular underlying investment choice among 64% of advisers was an offshore investment bond , followed by mutual funds (23%), stocks and shares (9%) and then cash (4%).

Effectively evading compulsory annuitisation was third on the list, followed by inheritance tax (IHT) avoidance.

Rachael Griffin, head of product law and financial planning at Skandia International, says: "As expats continue to retire abroad, we're seeing a growing awareness of QROPS and the benefits that this type of product offers those who are retiring outside of the UK.

"A QROPS can be an appropriate investment for many expats living abroad and offers a level of flexibility such as different currency options, not found within a UK pension scheme.