QROPdirect: which is better?

Given the advent of QROPS and SIPP, there is now so much more that can be done with your existing pension arrangements. Assuming that they are ‘safe’ where they currently are is a false security.

If you qualify for a QROPS or would like to investigate the benefits of a SIPP, please take a look at this high level comparison to make sure that you understand the key differences.

	SIPP	QROPS
Investment of Pension Fund - Options?	Prescribed Range of Investments Available – subject to UK HMRC restrictions	Inherently Greater Flexibility – freedom of investment choice & access to full range of world wide listed equities/commodities
Pension Tax	Benefits Paid Net of Tax – UK HMRC tax rules apply	Benefits Paid Gross - the full benefits are paid, without tax. You may still be liable for tax, depending upon where you live!
How Can You Take Benefits?
From Age 55	25% Tax Free Lumpsum	Up to 30% Tax Free Lumpsum – conditions do apply
Before Age 75	Unsecured Pension - leave balance invested & draw income which is set by UK GAD actuarial rates.	Income Drawdown Available subject to Trust/Jurisdiction rules
After Age 75	Alternatively Secured Pension - leave balance invested & draw income which is limited to 90% of income rate set by UK GAD actuaries for a 75 year old	Income Drawdown Available subject to Trust/Jurisdiction rules
After Age 50 (Age 55 after Apr 2010)	Option to Purchase Annuity to draw an income	No Need to Purchase Annuity
What Happens If You Die?
Inheritance Tax Free	No	Yes
BEFORE Age 75 & AFTER Taking Benefits	35% Tax Payable	0% Tax Payable
AFTER Age 75 & AFTER Taking Benefits	82% Tax Payable	0% Tax Payable
What’s Suitable For Your Residency Status?
Non-Expat	Yes	No
Expat	No	Yes