QROPS turned twenty in April 2026. Launched as a sensible way for genuine emigrants to take their pension with them, they became — for a period — one of the most heavily sold products in offshore financial advice. Two decades of rule-tightening later, the honest answer to “are QROPS still worth it?” is: for a small group of genuinely settled expats, yes; for most others, the reasons they were sold no longer exist. Here’s the full timeline, and how to judge your own scheme.
Why QROPS were attractive — originally
When “A-Day” pension simplification arrived on 6 April 2006, QROPS offered real advantages:
- Escape from the lifetime allowance (LTA) — funds transferred out were tested once, then grew outside the LTA
- Flexibility before pension freedoms existed in the UK, where buying an annuity was often compulsory
- Higher tax-free lump sums — Malta permitted 30% versus the UK’s 25%
- Currency matching and consolidation for genuine emigrants
- Death benefits outside the reach of some UK charges
Every one of those bullet points has since been weakened or removed.
The timeline of tightening
2015 — Pension freedoms
UK-registered pensions gained full flexi-access drawdown. The flexibility argument for QROPS evaporated overnight; UK schemes became as flexible as anything offshore.
9 March 2017 — The overseas transfer charge (OTC)
A 25% tax charge was imposed on transfers from UK pensions to QROPS unless an exclusion applied — principally being resident in the same country as the scheme, or (then) both member and scheme being within the EEA. Speculative “just in case” transfers collapsed.
2021 — Malta’s adviser rules
Malta required advisers on its QROPS to be licensed for investment advice in the member’s country of residence, stranding many members whose original advisers didn’t qualify — one reason so many holders are now looking for a new QROPS adviser.
April 2023 / April 2024 — The LTA disappears
LTA charges were removed in April 2023, and the allowance was abolished from April 2024, replaced by lump-sum allowances and a new overseas transfer allowance (OTA) of £1,073,100 for QROPS transfers. The single biggest historic motive for QROPS — escaping the LTA — ceased to exist.
30 October 2024 — The EEA/Gibraltar exclusion closes
The Autumn Budget removed the OTC exclusion for transfers to EEA and Gibraltar QROPS. From that date, a UK resident transferring to a Malta or Gibraltar QROPS pays the 25% charge unless they live in the same country as the scheme. The mainstream route into QROPS has effectively shut.
6 April 2027 — Inheritance tax inclusion
Under the Finance Act 2026, unused pension funds and death benefits enter the IHT estate — including QROPS held by long-term UK residents. The last major structural advantage for UK-connected members falls away. If you’re back in Britain (or heading back), see Returning to the UK With a QROPS.
So who should still have a QROPS in 2026?
A QROPS can still earn its place if most of the following describe you:
- You live permanently in (or very near) the jurisdiction of your scheme, or in a country whose tax treaty with that jurisdiction genuinely improves your income position
- You want retirement income in your local currency, matched to where you spend
- Your scheme carries secured benefits or guarantees that a transfer would forfeit
- You have no realistic intention of returning to the UK
And who should be reviewing theirs?
- UK residents and returners — you now face UK income tax, the 2027 IHT inclusion, and offshore fees, with no offsetting benefit
- Anyone paying layered charges — trustee, bond, platform, dirty share classes, trail commission; audit them with our guide to QROPS fees and charges
- Orphaned clients whose adviser has vanished or lost the right to advise them
- Anyone whose QROPS was sold on LTA grounds — the problem it solved no longer exists
For these groups the practical choices are to restructure the existing scheme or transfer it home — compared side by side in QROPS vs SIPP and, for the mechanics, in our complete guide to transferring a QROPS back to the UK.
A note from Edale
Edale is an FCA-regulated, fee-based UK adviser specialising in cross-border pensions and expatriate finances. If your QROPS predates most of the rules above, a one-off review will tell you whether it still serves you — and if it does, we’ll say exactly that. Arrange a review.
Frequently asked questions
Are QROPS still worth it in 2026?
QROPS remain worthwhile mainly for people permanently settled in the scheme’s jurisdiction who want local-currency income, or whose schemes hold benefits that a transfer would forfeit. For UK residents and returners, the tax advantages have largely been legislated away, and lower-cost UK alternatives usually serve better.
What is the overseas transfer charge?
The overseas transfer charge is a 25% UK tax on transfers from UK-registered pensions to a QROPS, introduced on 9 March 2017. Since 30 October 2024 it also applies to transfers to EEA and Gibraltar schemes, unless the member is resident in the same country as the QROPS.
What is the overseas transfer allowance?
The overseas transfer allowance (OTA) is the amount that can be transferred from UK pensions to QROPS without an additional tax charge, set at £1,073,100 for those without transitional protections. Transfers above the OTA are taxed at 25% on the excess.
Did QROPS lose their inheritance tax advantage?
Yes, for UK-connected members. From 6 April 2027, unused pension funds, including QROPS, count within the inheritance tax estate of long-term UK residents under the Finance Act 2026, removing the estate-planning benefit that offshore schemes once appeared to offer.
Can I still transfer my UK pension to a QROPS?
Yes, but since 30 October 2024 most transfers attract the 25% overseas transfer charge unless you are resident in the same country as the receiving scheme. Genuine emigrants transferring to a scheme where they live remain the main group who can transfer without charge.