Claire Carey, partner at Sackers, said: “The recent legislative changes to the rules governing QROPS mean that benefits cannot generally be paid before age 55, unless the transferring member is retiring due to ill-health. This so-called pension age test has been causing difficulties for pension schemes in certain jurisdictions, most notably Australia, where benefits may be accessed at an earlier age due to financial hardship.

{desktop}{/desktop}{mobile}{/mobile}

“As promised, HMRC has today issued an updated QROPS list. Although it is difficult to assess just how many schemes have fallen by the wayside, as feared, the fairly lengthy list of Australian schemes has been reduced to a solitary entry.”

Nigel Green, the founder and chief executive of deVere Group, many of whose 80,000 clients have transferred their retirement savings into an HMRC-recognised QROPS, welcomed the tightening of the rules.

He said: “Whilst Australian superannuation funds are highly regulated financial vehicles, they fail the UK’s pension age test.

“That’s to say that they do allow the early payment – before the age of 55 - of benefits. Therefore, these funds do not meet all the stringent requirements needed to be recognised by HMRC as a QROPS or Qualifying Recognised Overseas Pension Scheme.

“This measure further impedes funds being transferred to certain destinations with the sole aim of the pension holder then being able to withdraw a large proportion of the cash as a lump sum. This is not how QROPS were ever intended to be used; they are meant to provide an income in retirement for those living outside the UK.”

He said: “HMRC’s stance on this issue and the deployment of more and more of its resources in the area is further evidence that QROPS are fully part of the retirement planning ‘establishment’, and that the overseas pension transfer market has fully come of age.

“Last week’s tightening of the rules means that clients are even more protected, making QROPS, with all their enormous financial benefits for expat retirees, an even more attractive option.”

He believes other jurisdictions will benefit from HMRC’s new list, including Malta, the Isle of Man and Gibraltar.

Jon Greer, pensions technical expert at Old Mutual Wealth, said: “I believe the QROPS market will adapt rapidly to the revised list issued by HMRC.

“My feeling is we will see a lot of those schemes come back onto the list over the coming weeks and months. It appears that providers have been caught off guard with limited time to make the required changes.

“I’m sure providers will accommodate HMRC’s requirements where feasible, and if they can’t accommodate the changes, possibly due to the impact on other scheme members, they may look for alternative solutions, such as creating a new recognised overseas pension scheme where the scheme rules limit access in line with the minimum age requirement.”