Q-day could enable banks to enter QROPS space

Retail banks could come into the QROPS market as legislation removes complexity, according to Rex Cowley, consultant for The Overseas Pension.

Currently there are different encashment and lump sum rules based on jurisdiction but changes brought into effect on 6 April could level the playing field.

The reforms combined with new entrants to the market could enable QROPS to become mainstream among those who have UK pension assets but no longer reside in the UK.

Cowley said: "Let's look at the big players who've got expat divisions: Barclays, HSBC, Lloyds and Santander. They control millions of expat accounts. They've stayed out of this market place because of all of the issues. If you speak to an international bank's legal and compliance department, and they have all of this arbitrage between all of the different jurisdictions, they don't want to go there really."

This traditionally provided rich pickings for specialist IFAs who targeted banking customers.

Cowley explained: "The danger to the bank is once an IFA has got your client, they will start to do structured financial planning for the client which some of the banks don't offer. Guess what's going to happen. Bank deposits are going to start going into tax wrappers which probably provide clients with a more efficient environment rather than just sitting in cash."

But big firms could turn the tables: "We'll see banks coming into the market over the next 24 months because it's becoming clear."

He added: "Conversations have been had with different people but the general feeling is this will be coming onto the bank's radar in a serious way once April has arrived."