If you’re living abroad or planning to retire overseas, you’ve probably heard terms like offshore pension, QROPS, or International SIPP.

They sound similar — and they’re often used interchangeably — but in reality, these are very different structures with different tax, cost, and regulatory implications.

At Arthur Browns Wealth Management, we specialise in helping clients understand which type of pension best fits their goals, residency, and long-term plans.

Let’s separate the facts from the myths.

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What Is an “Offshore” Pension?

In simple terms, an “offshore” pension is a retirement plan based or administered outside your home country — often designed for people who live, work, or retire abroad.

There are two main types for UK pension holders:

1. QROPS (Qualifying Recognised Overseas Pension Scheme)

2. International SIPP (Self-Invested Personal Pension)

Both allow expats to manage their pensions from overseas — but they’re not equal in cost, protection, or tax treatment.

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QROPS: Designed for Long-Term Expats

A QROPS is an HMRC-recognised overseas pension scheme. It was originally designed for people who had permanently left the UK and wanted to move their pension into a structure closer to their new country of residence.

Benefits:

• May simplify local tax reporting.

• Can allow retirement income in local currency.

• Can provide estate planning flexibility in some jurisdictions.

Risks and drawbacks:

• Often higher setup and ongoing costs.

• May involve complex offshore bond wrappers or commissions.

• Can trigger UK tax charges if you move country within five years of the transfer.

• Fewer consumer protections (no UK FSCS or Ombudsman coverage).

You can read more about QROPS rules on the UK Government’s official QROPS list and guidance.

In short: a QROPS may make sense if you’re retiring outside the UK and the EU (for example, in Australia or New Zealand) — but for many UK expats in Europe, an International SIPP is often a better fit.

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International SIPP: A UK Pension for People Living Abroad

An International SIPP is still a UK pension, regulated under UK law by the Financial Conduct Authority (FCA) and HMRC.

It’s designed for British expats who want to keep their pension under UK regulation while living overseas.

Benefits:

• Fully FCA-regulated (consumer protection and FSCS coverage apply).

• Lower cost and more transparent than many QROPS.

• Allows income in multiple currencies.

• Keeps UK tax advantages and oversight.

Considerations:

• UK rules on access (age 55+) and tax-free cash still apply.

• Local tax may apply to withdrawals in your country of residence.

• Advice must come from a UK-regulated adviser — ideally one with permissions in your current country too.

You can learn more about this option in our dedicated guide on International SIPPs.

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Common Myths About Offshore Pensions

Let’s debunk a few popular myths that often appear in online forums and social media adverts.

Myth 1: “Offshore means tax-free.”

Not true. Your new country of residence still taxes you according to local rules — often with no special treatment for offshore pensions.

Myth 2: “You have to transfer your pension when you move abroad.”

No, you don’t. Many UK pensions can remain in the UK even if you live overseas. In fact, unnecessary transfers are one of the biggest causes of financial loss for expats.

Myth 3: “QROPS always outperform UK pensions.”

Performance depends on investments, not the structure. QROPS are often sold with expensive offshore bonds that erode returns.

Myth 4: “If I move my pension offshore, I’ll avoid UK inheritance tax.”

In reality, HMRC may still consider your pension UK-based depending on how it’s structured. Always get regulated cross-border advice before making changes.

Myth 5: “Offshore pensions are for high-net-worth investors only.”

International SIPPs can be suitable for anyone with moderate pension savings — not just the ultra-wealthy.

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When Might a QROPS Still Make Sense?

While many UK expats now favour International SIPPs, a QROPS may still be suitable if:

• You’re permanently moving to a non-UK, non-EU jurisdiction (e.g. Australia).

• Your pension pot exceeds the UK Lifetime Allowance limit (no longer a tax, but still relevant for legacy planning).

• You want income and assets fully outside UK jurisdiction.

However, even in these cases, the advice must come from a regulated UK adviser who can demonstrate why the transfer benefits you — not the adviser.

The FCA’s pension transfer guidance explains the due diligence expected from advisers before recommending any pension transfer.

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Red Flags: When “Offshore” Means “Overpriced”

Beware of:

• Unregulated advisers selling QROPS wrapped in offshore bonds (e.g. RL360, Generali, Utmost).

• “No fee” advice — which often means hidden commissions of 6–10%.

• Lock-in periods and exit penalties if you change your mind.

• Websites with no regulatory information or contact details.

The FCA ScamSmart tool is an excellent way to check if you’re being targeted by an unregulated or high-risk offer.

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How to Choose the Right Offshore Pension

1. Check regulation: Make sure both the adviser and provider are FCA-authorised or locally licensed.

2. Understand the costs: Ask for a full fee breakdown — setup, ongoing, platform, and fund fees.

3. Ask where your pension will be held: UK trustees (for SIPPs) offer stronger protection.

4. Get written advice: Never move your pension without a written suitability report.

5. Confirm your local tax treatment: Always combine regulated financial and tax advice.

If you’re unsure which structure fits your situation, you can speak to one of our advisers for a clear, independent assessment.

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The Bottom Line

Not all offshore pensions are bad — and not all are good.

The right structure depends on where you live, your long-term goals, and your tolerance for risk and fees. For most UK expats, a regulated International SIPP provides a strong balance of control, cost-efficiency, and consumer protection.

At Arthur Browns Wealth Management, we help clients choose the right pension structure for life abroad — safely, compliantly, and with full transparency.

Contact us