NHS pension transfers to be banned for Indian residents

From April 5 2015, it will not be possible for a member of the NHS pension scheme to transfer their pension into a QROPS scheme in India, even if they have permanently left the UK and returned to India or elsewhere.

The UK government has introduced this change as part of a huge revamp of the UK pension regime announced in the Budget in March. One of the key drivers behind the pension reforms was to give pension holders more freedom and flexibility over their pension fund.

One of the key reforms is that members of defined contribution schemes will be able to withdraw their entire fund from the age of 55, subject to being taxed at their marginal rate of income tax.

The risk, therefore to the government is that millions of members of public sector schemes, such as teachers, NHS, local government, would transfer their final salary schemes into defined contribution schemes, and then withdraw their entire pension fund. This would place a huge strain on public sector pension funds.

As a result of this perceived risk, the government has announced that as part of the reforms, transfers from unfunded public sector schemes would be banned.

What do the changes mean for Indian residents with an NHS Pension?

In short, the NHS pension scheme administrator will not be able to process any transfers out of the scheme after 5 April – so after this time if you are living in India and still have your NHS pension, you won’t be able to transfer it.

The government has yet to publish draft legislation, so we cannot comment on the precise logistics of how the ban will be introduced. But the government has made its position clear – it has taken consultations from interested parties (including those from various QROPS providers), and has reiterated it’ intention to ban transfers from the NHS scheme.

However, there is still time to start the transfer process.

How do I start the NHS transfer process?

Whilst the ban on NHS transfers will not take effect until 5 April 2015, it is important to act now to avoid any delays. The NHS scheme is already experiencing severe delays in processing CETV’s (‘cash equivalent transfer values’) for scheme members, and are also experiencing delays in processing the actual transfer out of the scheme into the QROPS.

QROPS Adviser Group can assist you with the entire process of transferring your NHS pension into a QROPS, to ensure that all the requisite paperwork is completed and processed with the NHS in order to meet the 5 April deadline.

Please email us at info@qropsadviser.in or call us on +44 7582 589561 for more information, or to schedule a free, no obligation consultation in relation to your UK pension.

Alternatively, visit our dedicated Returning NRI website at www.qropsadviser.in, and complete the contact form, and we will get back to you within 24 hours.

How to transfer UK pension to India QROPS

If you have returned to India with a UK pension, or are planning to return to India in the near future, then transferring your UK pension to a QROPS scheme can you a variety of benefits.

The Transfer Process – a summary

1.    Obtain a Transfer Valuation of your current pension assets. The first step in the QROPS transfer process for residents of India is to get up to date valuations for your UK pension (or pensions, if you have more than one).

2.    After the ‘Cash Equivalent Transfer Value’ (or ‘CETV’) has been received, the scheme member’s financial adviser will be able to advise firstly, as to whether a transfer into a QROPS scheme is suitable, and secondly, if it is, the most suitable jurisdiction for the pension to be transferred to.

3.    At this stage the financial adviser will also discuss the make--up of the investment portfolio with the client, and build a suitable portfolio which meets the client’s exact investment needs, according to his or her risk profile and investment and retirement objectives.

4.    Complete the pension transfer paperwork. At this stage, all of the necessary paperwork is completed – QROPS trustee forms, UK pension discharge forms, and the forms required to open the investment account.

5.    Once the UK pension scheme has processed the transfer, and sent the funds across to the QROPS pension scheme, the QROPS trustee will invest the funds as directed by the client and their financial adviser.

6.    At this stage, your QROPS transfer is complete, and you can continue living and working in India, knowing that your hard earned pension fund is free from the hands of the UK taxman.

Variation in Transfer Process

The process of transferring your UK pension to a QROPS scheme in India will also depend on the type of pension that you have. 

In terms of the process involved to transfer the pension across to India, there are broadly 3 different types of pension, which will involve different documentation requirements, and differing time frames to complete the transfer process. These are outlined below as follows:

NHS pension. The NHS pension scheme has very specific requirements for transferring out.  In addition to the standard Letter of Authority, the NHS will require a duly completed TV Form TV 27, which requires other information needed to complete the valuation, such as whether the scheme member is married, and the date of marriage, divorce etc.

Transferring your NHS pension to India is one of the most complex transfers, both in relation to the paperwork required to be completed, and in how long it takes to complete the process. In addition, because the forthcoming ban on NHS pension transfers into QROPS (see below), there are significant delays, both to process the initial CETV, and then to process the transfer once all of the paperwork has been submitted.

Therefore, for clients who wish to transfer their NHS pension into a QROPS before the April 2015 deadline expires, they are strongly urged to start the process as soon as possible.

Private sector final salary schemes. Again, it often takes up to 3 months to process an up to date transfer valuation, as in some cases the pension scheme’s actuary will need to sign off on the valuation, which can cause a delay. However, once the valuation has been produced, the actual transfer of the pension is usually straight forward, taking between 3 and 6 weeks to complete.

Private sector pension schemes. These are usually straight forward, as the scheme administrator will not normally require an up to date valuation to commence the transfer process – usually the transfer forms will be completed by the client, sent to the scheme administrator, and they will run off the latest pension valuation at the time of the transfer. Transfers for these schemes can be completed in fairly short order, and the time to transfer varies between 2 and 4 weeks, depending on how efficient the UK scheme administrator is.

Additional information for transferring an NHS pension into a QROPS Scheme

Clients should be aware that after 5 April 2015, it will no longer be possible to transfer their NHS pension into a QROPS scheme.  This is a result of the sweeping changes to the UK pension rules introduced by the UK government in  the March 2014 Budget (and confirmed to parliament on 21 July 2014 – http://www.parliament.uk/documents/commons-vote-office/July-2014/21%20July/Treasury-Pensions.pdf).

This ban will have a profound effect on the retirement plans of thousands of doctors who have already left the NHS and have returned to India to live or work – as it will mean that they cannot access their pension until the age of 60 – as opposed to 50 under a more flexible QROPS arrangement.

More information

If you want more information on how to transfer your UK pension to India, please contact QROPS Adviser Group by email at info@qropsadviser.in or call our UK office on +44 7582 589561.

NHS Pension Transfers to India QROPS

Residents of India who have previously lived and worked in the UK as doctors or nurses, or in other capacities within the National Health Service (NHS) can now transfer their NHS pension into a QROPS scheme in India, or to an overseas QROPS scheme.

Each year thousands of healthcare professionals return to India with an NHS pension, which is effectively frozen until the scheme member is either 60 or 65. Today, with the help of QROPS Adviser Group, they are able  to transfer with their pension into a scheme which can offer them early access to their pension, increased levels of income and investment returns, and enhanced tax planning benefits.

What are QROPS?

QROPS pensions were introduced in 2006 by the UK government in order to allow members of UK pension schemes to transfer them to overseas schemes if they had left the UK.  These changes were made in order comply with an EU Directive in relation to freedom of movement of pensions, and has subsequently huge opportunities for Indians who have returned home to India after a spell working in the UK.

In essence, a QROPS pension is simply a pension scheme which is based outside of the UK, and which broadly offers scheme members similar benefits to those which could be offered to UK member schemes. However, the nuances which each overseas QROPS jurisdiction offers can translate into significant financial and tax planning opportunities for Indian residents with a UK NHS Pension Scheme.

The benefits of a QROPS Scheme for NHS Pension Members in India

There are numerous benefits on offer for someone who wishes to transfer an NHS pension into a QROPS plan in India. We cann list some of these advantages as follows below:

Early Access to your NHS pension

Whilst the NHS pension scheme offers it's members a very generous benefits scheme, one of the drawbacks is that you must wait until you are 60 before you can access these benefits, if you are a member of the 1995 Section (for new members, of the 2008 Section, the wait is even longer, until the age of 65).

Therefore for Indian residents who wish to retire early, or at least access some of their pension in the form of a lump sum, a pension transfer to an overseas QROPS scheme is a very attractive option. With a QROPS Scheme, you can access your pension as early as 50, depending on the rules of the individual QROPS jurisdiction and scheme rules.

Enhanced tax free lump sum payment

With the NHS pension scheme, the rules on tax free lump sums are determined by UK pension rules, which state that a maximum of 25% of the pension transfer value can be taken as a tax free lump sum. However with most QROPS schemes, up to 30% of the transfer value can be taken as a tax free lump sum for Indian residents (in fact, local India QROPS scheme members can take up to 33% tax free).

Control over your pension fund

The nature of the NHS pension scheme is that it is a defined benefit scheme - which means that a member is entitled to receive a fixed salary each  year after they retire.  However this also means that they hve no control over how he funds are invested. Many investors, especially in India want more flexibility and choice in relation to how their pension is invested - perhaps in investment fund in India, or in commoditie such as gold or silver, in natural resources, or even in property.

With a QROPS scheme which is based in Malta or Gibraltar, a resident in India can set up an investment account, and have the freedom and flexibility to invest in a choice of over 6,000 different investment funds.

Pass on your pension fund to your loved ones after you pass away

Compared to the NHS pension scheme, this is one of the biggest advantages for a resident of India establishing a QROPS transfer in an overseas jurisdiction. When a member of the NHS pension scheme dies, their husband or ife will only receive half of their pension payment. This can cause severe financial hardship, as suddenly the household income has halved.  Then, to compound matters further, after the spouse passes away, the pension stops paying completely, and there is nothing to pass on to the children.

This scenario can be contrasted with  the situation of that same Indian resident's NHS pension being transferred to an overseas QROPS transfer, where after the scheme member has dies, the entire remaining pension pot is available to the member's beneficiaries. So even if the member's wife or husband dies soon after - the pot is available to be passed on to children and/or grand chidren - or to whoever the member wishes.

NHS Pension Transfer Process

The process of a resident in India to transfer their NHS Pension into a QROPS plan is as follows:

Step 1. Initially QROPS Adviser Group will obtain the latest transfer value of your NHS pension from the scheme administrators in the UK.

Step 2. Once we have received this valuation, we will consider your financial goals and objectives, and investment risk profile and recommend the most suitable QROPS scheme for you.

Step 3. We will assist you to complete all of the relevant paperwork, and dispatch this to the QROPS trustee for them to process.

Step 4. The QROPS trustee will liaise with the NHS scheme administrator to ensure a timely release of the pension funds, and then place the funds in the investmen scheme recommended and agreed with the client.

Step 5. Your QROPS scheme is now in place, and you can enjoy the rewards and benefits of your QROPS scheme - such as increased tax free lump sums, enhanced income, and the myriad tax planning and inheritance and estate planning advantages.

About QROPS Adviser Group

QROPS Adviser is a leading QROPS advisory firm and has been advising on NHS pension transfers to Indian residents since the inception of the QROPS legislation in 2006. Through our dedicated Indian advisory division and dedicated website, http://qropsadviser.in we inform and advise residents of India on their QROPS options and help them make the right choices for the NHS pension.

Please note that QROPS Adviser do not charge you for our services - we receive a fee directly from the QROPS provider or investment company.  Also, we will never have any access to your funds - your NHS pension fund will be transferred directly from the NHS scheme across to the QROPS scheme, so you can rest assured that your funds are 100% safe.

For more information on how we can help you make the most of your NHS pension, please contact us as follows:

QROPS Adviser Group
Tel: +91 80 4911 6687 (Bangalore office)
Tel: +34 647 316 898 (European headquarters)
Email: info@qropsadviser.net
Website: http://qropsadviser.in

A Review of HMRC's QROPS Rule Changes, April 2012

New QROPS Developments

By setting up a QROPS (Qualifying Recognised Overseas Pension Scheme), it is now possible to have access to your UK pension, whereas previously, prior to 2006, it has not possible to access the benefits - ie it was 'frozen'. In some cases, an immediate tax free lump sum can be taken out of the QROPS.

The preceding couple of months has seen lots of developments in the QROPS landscape, with many QROPS schemes having been taken away from the HMRC List, and with other jurisdictions looking to make a big push forward in the QROPS market. By far the most serious casualty was Guernsey, with the new QROPS rules effectively shutting down the QROPS industry in Guernsey.

Perhaps one surprise reesult from all the changes, is that Malta has emerged as a leading QROPS jurisdiction.

The Emergence of Malta QROPS

Malta has a full EU membership, and this strengthens it's positions as a valid and robust QROPS jurisdiction.

All retirement schemes on the island are governed through the Special Funds (Regulation) Act 2002, which states that applications are required to be clearly specified and accompanied by a trust deed or scheme document.

While other QROPS jurisdictions developed schemes then had to respond to questions from HMRC, Malta took a different approach - it got HMRC onboard from day one, and created the framework with the help and assistance of HMRC. This gives us the conviction in recommending a Malta QROPS schemes as a favoured QROPS destination.

Although there are fully regulated pension industries in a number of countries outside of the EU, as well as mature international pensions industries in the British Protectorates, we believe that these jurisdictions from a QROPS perspective to present potentially a higher level of risk for advisers, service providers and customers when compared to a QROPS established in the EU - particularly QROPS in Malta.

When looking for a effective QROPS jurisdiction, there are a number of factors which need to be considered. This way, you can transfer your pension to a QROPS in the knowledge that you are reducing to a minimum the potential risk of a QROPS being investigated and potentially disqualified by HMRC at some stage in the future.
 These criteria include:
A well developed international tax treaty network.
 Secure legislative platform.
 Regulated domestic pension environment which includes the need to have all QROPS in the jurisdiction to be audited.

Following a detailed analysis of the available choices, Malta satisfied the above QROPS conditions and had the overall reliability of being based in an EU Member State. Accordingly Malta became the favourite jurisdiction for the QROPS.

Malta's Tax Treaty Network
One of the biggest attributes that Malta carries is that it has an considerable tax treaty network. Malta currently has 57 tax treaties that can, in many cases, confer particular advantages to plan members as compared to the UK tax treaty network that applies to UK registered pension schemes.

The Malta/US tax treaty can be an example where it's often more beneficial for US citizens and green card holders to receive a UK tax relieved pension from a Malta QROPS, rather than pension provider based in the UK or other jurisdiction that offers QROPS.

Gibraltar is also looking to benefit from the demise of Guernsey as a QROPS jurisdiction. It remains to be seen what effect this new legislation will have on the global QROPS industry.

Some QROPS FAQs

As a QROPS Adviser, I am frequently asked various questions relating to QROPS pensions. This is one of the reasons why we decided to create our own website, over at www.qropsadviser.net. This site has rapidly become one of the foremost and authoritative information sources of QROPS on the internet. We are in the process of compiling a comprehensive FAQ section on that site. But in the meantime, I thought it might be useful to set out below a few of the more frequent FAQs.. If you have any more questions you would like answered, just drop us a line over at the main site, and we'll get straight back to you.

What Are QROPS?

QROPS are Qualifying Recognised Overseas Pension Schemes. They were created in 2006, as a result of the reform of the UK pension system. In essence, they allow someone to transfer their UK pension into an offshore scheme, and take advantage of the numerous benefits on offer.

What is the Difference Between a QROPS and my UK Pension?

With a QROPS, there is much more investment freedom - you can choose your own levels of risk, and are not subject to the strict and onerous regulations which govern UK pensions, and which UK pension trustees must adhere to. In addition, there is no upper limit to how much money can be invested into a QROPS. With a traditional UK pension, ther is a cap of GBP1.8m, above which you are taxed at the top rate, and receive no allowances.

Do I Qualify for a QROPS?

In theory, you qualify for a QROPs if you are between the ages of 18 and 75 years. In addition, you must living outside of the United Kingdom, or intend to live abroad within the next 12 months. You do not need to be a UK citizen to qualify for a QROPS - provided you have a UK pension, you can transfer your pension into a QROPS.

However, notwithstanding these wide criteria, it is not recommended to transfer your pension into a QROPS unless you have a pension pot with a value in excess of GBP50,000. The reason for this is that there are some fixed costs associated with setting up a QROPS, and below this threshold, the expense ration will be too high, and it will negate most of the positive effects of having a QROPS in the first place.

For more information about QROPS transfers, please head over to the leading website for QROPS pensions, where you can contact us, and arrange for a free consultation with one of our experts.

A Guide to People Considering a QROPS Transfer

QROPS have become increasingly popular since they were first introduced in 2006. Since that time, thousands of UK expats living abroad have taken advantage of the significant advantages that they can offer. However, there is still an air of confusion around what they are and how they can potentially offer greater advantages for UK expats rather than keeping your pension back in the UK. In this series of articles, we will answer your questions, and provide some guidance on how best to assess whether a QROPS is a suitable vehicle for you.

What are QROPS?

Well, let’s start with the basics. A QROPS is a Qualifying Recognised Overseas Pension Scheme. It is effectively an overseas pension scheme which has been recognised and approved by the British HMRC as meeting certain requirements and regulations, which are of a similar standard to UK pensions, and which also meet the local laws and regulations that are in place in the jurisdiction in which the QROPS pension scheme is situated.

Why were QROPS Introduced?

QROPS were introduced as a result of UK pension reform in 2006, which was a direct result of having to comply with European directives relating to the transferability of pension schemes. Thus QROPS were a byproduct of having to comply with European laws.

How Can I Benefit from a QROPS?

Under the QROPS rules,  UK expats living abroad are allowed to transfer their UK pension funds into a QROPS scheme based in another jurisdiction.  However, it is important to note that the HMRC is still involved in the reporting process, notwithstanding the pension is still based overseas. The QROPS rules state that  the QROPS pension provider must still report all payments and withdrawals to the HMRC for 5 years after the pension was transferred. After this time, the reporting requirement falls away. Therefore, after 5 years, there is much more flexibility and investment freedom in respect of how the pension assets are invested, and how they can be ultimately used.

So I Still Have to Buy An Annuity with a QROPS?

No. This is one of the biggest advantages of transferring your pension into a QROPS – there is NEVER an obligation to purchase an annuity.

Do I Still Need to Pay UK Tax on Income from my QROPS?

No. After you have been away from the UK for 5 consecutive tax years, the QROPS provider no longer has to report any withdrawals to the UK authorities. Therefore, at this point, you will only be subject to income tax in the country where you are resident. Depending on where you live, these rates can be very low, or even zero.

How Much Does it Cost to Establish a QROPS?

The costs of setting up a QROPS vary enormously, but the good news is that costs are coming down, as the market is becoming more and more competitive, and as a result, QROPS providers are lowering their costs. Typically, there will be a fund set up charge, which averages around 0.5% of the pension fund’s value, and an ongoing annual management charge, and possibly some adhoc administration charges. These charges compare very favourably to the charges of normal pension funds, and the benefits on offer significantly outweigh the initial upfront costs involved.

What is the Process Involved in Setting Up a QROPS?

The first step involved is to seek professional advice from someone with significant experience of QROPS and pension transfers. Because of the complex nature of pension transfers, a professional adviser is required to advise you whether, in the first place, a QROPS transfer is your best option, and if it is, to advise you on the best provider and product to suit your individual circumstances.

Introduction to QROPS - An Alternative Solution to Purchasing an Annuity?

In April 2006 the UK government introduced far reaching changes to the pensions system in the UK. One of most revolutionary changes introduced was the HM Revenue and Customs’ backing and support of transfers of British pensions by expatriates to Qualifying Recognised Overseas Pension Schemes ('QROPS'). As a result, any expat, or intending expat, who has a UK pension plan, would be well advised to look into whether a QROP is a suitable option for thie circumstances.

In essence, a QROPs is any pension plan which is recognised as fulfilling certain criteria as laid down by the HMRC. Once a pension scheme meets those approved conditions, and has been recognised as a QROPS pension by the HMRC, it allows someone living outside of the UK to transfer their UK based pension assets into an offshore scheme.


Let us first take a quick look at the UK pension rules, and then we can see how the potential benefits of a QROPS pension are easily apparent. Once leaving the UK, an expat's UK pensions are frozen, and no contributions are allowed, but they will still attract hefty management charges. In addition, the investment strategy is in most cases a ‘one size fits all’ approach which cannot accommodate people with different risk profiles.

UK pension rules require all UK holders of pensions to buy an annuity, which is generally very poor value for money, and on top of that, they must pay tax on top of any annuity payments they receive. Inheritance rules are also much more inflexible - on death, a spouse can usually take up to half of the annuity, but it is not possible to transfer the pension to children or anyone else.

The creation of QROPs pension schemes under the 2006 legislation addresses these problems and creates new opportunities for British expats.  This is achieved through establishing a QROPS plan, and transferring the pension assets overseas, into a tax neutral jursdiction.


QROPS Advisers are the renowned leaders in assisting expats on transferring UK pension assets into QROPs. It is essential to be clear that a QROPS transfer is not a suitable pension alternative for everyone. Seeking expert QROPS advice is imperative when considering whether such a scheme is right for you, and you can find a variety of resources at their website especially devoted to QROPS, at QROPS Adviser.net