Malta-based QROPS to be given same flexibility as UK-based pensions

19 Jan

News that Malta-based QROPS (Qualifying Recognised Overseas Pension Schemes) will benefit from the same flexibility as UK-based pensions following recent modifications to local pension regulations, should, I believe, be welcomed with open arms.
The Malta Financial Services Authority announced the change in legislation which will mean QROPS domiciled in Malta will adhere to HM Revenue and Customs’ flexibilities as from April.

The move highlights the continuing maturity of the pension transfer market and further cements QROPS as being a principal part of wider retirement planning options, and puts Malta in an even stronger position when it comes to international pensions.

Since they were introduced in 2006, QROPS have experienced a year-on-year growth in popularity, which I am confident will continue as more individuals become ever more aware of their many benefits.

So what will this change mean for QROPS in Malta?

deVere Group has long been in favour of Malta-based QROPS for a number of reasons.  As well as being an English-speaking EU country, and member of the Commonwealth, Malta provides a robust, highly-regulated environment controlled by the Malta Financial Services Authority, it has double taxation advantages and a remarkable history of secure, financial success.

The amendment to pension legislation in Malta means locally-based QROPS will be permitted, as proposed by HMRC, to withdraw up to a 100 per cent lump sum as from April, as part of the UK government’s proposal to ban restrictions on pensions access.  Whilst I unreservedly agree with QROPS being given the same privileges as pensions based in the UK, there are still the same risks attached to accessing pension pots early.

The focal point of any pension is to provide income throughout retirement.  If individuals are allowed to access their pension pots early, they could place their financial security in later life at serious risk.  Mistakes made within a financial strategy can be extremely costly to overcome and could result in devastating consequences in retirement.

However, that said, these changes to pension laws in Malta are excellent news for the QROPS industry, showing they are now a completely mainstream pensions option.


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