Article Summary

Several terms are being thrown around in the UK pension planning industry. Many people are wondering what they mean and how they can benefit from them. Brexit has triggered a lot of discussions on the internet, and on social media about how to better manage your retirement funds and get a better deal for your retirement. We believe that QROPS and International SIPPs are two practical options that you should consider. 

We also explained the International SIPP for US residents in one of our YouTube videos below. Subscribe to the channel to get the latest updates from the UK pension transfer industry.

What is a SIPP (Self-Invested Personal Pension)?

SIPPs are registered personal pension schemes in the United Kingdom. SIPPs are Defined Contribution schemes that are typically funded by individuals and must adhere to UK legislation in terms of taxation as well as when and how the fund is accessed.

International SIPPs are Self-Invested Pension Plans (SIPPs) designed especially for non-UK residents. They provide clients with a diverse range of investment options and are the preferred choice for anyone living outside the EEA who wishes to transfer or consolidate their UK pensions.

SIPPs have grown in popularity in recent years, owing to their low cost and the wide range of investment options. However, keep in mind that SIPPs are only available in the United Kingdom, so the benefits of using them may be limited if you live outside the UK. However, you can have an International SIPP.

SIPPs, like UK pensions, benefited enormously a few years ago when new rules came into effect allowing people to have fully flexible access to their Defined Contribution pensions (including SIPPs). This flexibility simply means that people over the age of 55 can choose when and how they receive their pension income.

What Is a QROPS?

There are many myths floating around, and some people may believe that a QROPS is a no-no for anyone looking to transfer their pension to another overseas pension scheme. There is a grey area surrounding the QROPS that can be misinterpreted.

To clarify, a QROPS is a registered pension scheme in the United Kingdom, which means that any DB pension scheme that is transferred into a QROPS will be approved by the United Kingdom government. However, QROPS are only available to EEA residents who intend to stay in the EEA for at least five years. They can be based in any country within the EEA and qualify as a QROPS as long as the scheme meets HMRC’s specific requirements.


One of the most significant advantages of a QROPS is the lifetime allowance (LTA). Unless you apply for certain types of protection, you can only accumulate a tax-favoured pension fund of up to £1.073 million under current UK legislation. This means that pension savings above the LTA may be taxed at up to 55%. 

However, if transferred into a QROPS, it is only tested against the LTA at the time of transfer and never again. This means that if the value of your UK pension fund is close to the LTA, it may be worth considering a transfer into a QROPS to avoid future taxation on pension savings above the LTA.

International SIPP vs QROPS

QROPS pensions are not taxed in the United Kingdom. However, the overseas scheme must be located within the EEA (European Economic Area) to avoid HMRC transfer charges. As a result, US residents are generally not permitted to transfer their DB pension to QROPS. As a result, a QROPS is not suitable for US residents due to higher overseas transfer fees and tax brackets.

The International SIPP is a UK-regulated structure that is commonly used by US residents. The term “international” is a little misleading here because these pensions are in the UK but set up in a way that benefits people living abroad. This means you can keep your pension assets in the UK while seeking advice from a regulated financial adviser who is familiar with local laws in the country where you live.

Both pension systems allow for flexible access. This means you can withdraw what you want when you want, and stop and restart your payments whenever you want. Both are suitable receiving schemes for UK Defined contributions, Defined Benefits, and personal private pensions.

The primary difference is that a QROPS is intended for EEA residents, whereas an International SIPP is best for US residents.


As you can see, numerous factors could influence your decision. After careful consideration and advice, a recommendation not to transfer can sometimes be the best result, it depends on your situation in the end. As always, you must work with a regulated firm that is well-versed in local tax and pension regulations. Any UK advisory firm have the necessary regulatory approval, professional indemnity insurance, or knowledge of the US system to advise US residents. Get in touch with us through the button on the right side for a free initial consultation with one of our IFAs.

Our Founder & CEO -
Dominic James Murray

I have been in the UK Pension Transfer industry for over 11 years, and have witnessed seismic changes in the UK Pension rules over the course of that decade. Most to the benefit of the UK Chancellor or to Chequer!

My 5 years as CEO of Cameron James, have certainly been the most rewarding. My goal, has been a simple one. Provide clients with transparent financial advice on a low-cost basis, for them to make informed decisions to protect their families best interests.

Our Clients Love Working With Us!

We have worked hard for our reputation and we will be maintaining it.

5.0 Star Rating