This has been a worry that has dogged the market since the schemes begin in 2006.
Most of the traditional, high-tier QROPS were created to transfer pensions worth up to £100,000.
Yet as the British pension pot averages between £35,000 and £40,000 – this led many to fear they could not benefit from QROPS legislation.
Advisers around the world noted that clients required a more cost effective solution, which led to a small-scale revolution in the QROPS industry.
QROPS “lite” are scaled down versions of a provider’s usual schemes – yet can better serve those with smaller pension pots.
HM Revenue and Customs has never imposed upper or lower limits for pension transfers; but many businesses have set their own rules to capture the clients they want.
Whilst historically that led providers to cherry-pick wealthy clients, a change in the tide is seeing many providers offering QROPS lite versions which cater to funds worth £20,000 and above.
With a QROPS lite, the tax firepower remains the same, clients can still consolidate many of their UK pensions into one structure, and those who wish to continue contributing to their pension towards their retirement can still do so.
Yet to ensure administration and fund charges remain cost-effective for these smaller funds, the investment options, are limited.
Bringing QROPS lite to the market brings many other advantages to clients, even with fees averaging £800 a year.
One of the many benefits of transferring a pension fund into a QROPS or QROPS lite is the ability to receive income and invest in any major currency of your choice.
As UK pensions typically pay income in sterling, before QROPS, individuals living abroad have had to carefully time their income to get the best possible drawdown amidst fluctuating current exchange rates.
Another benefit is the total amount allowed as a lump sum when you start your retirement.
In the UK, the total is 25% of your fund. With a QROPS, you can take 30% of your fund as a tax-free lump sum.
So whilst the smaller investment opportunities may present a problem for some, the income, lump sum and tax-efficient advantages are now making QROPS lite schemes an attractive option for expats the world over.