Managing a UK Pension in India using QROPS scheme
Neha Navaneeth
Marketing and Content Associate
Sep 9, 2025
What happens to your pensions in the UK if you have worked there for years and are now moving back to India?
His Majesty's Revenue and Customs (HMRC) offers a unique opportunity to UK employees to transfer their pension benefits to select QROPS-compliant pension schemes. This article discusses how you can manage your UK pensions in India using QROPS and enjoy the unique financial and taxation benefits of living a retired life in India.
What are QROPS?
QROPS or Qualifying Recognised Overseas Pension Schemes are HMRC-recognised overseas pension schemes formed and managed outside the UK. These schemes can receive funds transferred from certain UK pension schemes. Transferring UK pension funds to QROPS helps better manage pension investments while living in a foreign country.
Which UK pensions can be transferred to a QROPS:
Defined Contribution (DC) and Defined Benefits (DB) pensions. This includes workplace, occupational and self-invested personal pensions. Such facilities are available primarily in countries having tax treaties (e.g., DTAA) with the UK.
Which UK pensions cannot be transferred:
UK state pensions are not permissible for transfer to QROPS.
What are India-based QROPS:
India currently appears on HMRC's ROPS notification list, with schemes like the Axis Max Life Forever Young Pension Plan listed as Qualifying Recognised Overseas Pension Schemes. However, the number of India-based QROPS is quite limited, and these are typically insurance-style pension products (ULIP or annuity) offered by large insurers. These are investment-linked plans sold by insurers, where returns depend on the funds you pick. Anyone considering a transfer should always check the current HMRC list before proceeding, as availability changes over time.
Who is eligible for QROPS?
The following categories of individuals are eligible to transfer pension funds and benefits to QROPS.
Non-UK residents / an expat working in the UK
Foreigners living outside the UK but with workplace pensions accrued in the UK
UK residents planning to emigrate within 12 months
UK residents planning to spend their retirement abroad
UK residents working and living abroad with investments in UK private pensions
Pros: Why choose Indian QROPS?
Transferring the accumulated fund under the UK workplace and private pension schemes to an HMRC-compliant Indian ROPS offers several unique benefits.
Minimal exchange rate risk due to currency stability - As a UK-based NRI, if you are living in India after your retirement or plan to do so, without QROPS you will receive your pension in British Pounds. Converting the same in Indian rupees (INR) will expose you to the risk of fluctuations in currency exchange rates. Transferring a pension to a QROPS will mitigate that risk, as you will earn the pension in INR.
Easy to manage if living post-retirement life in India - For people living in India after retirement in the UK, a QROPS in India allows them easy access to customer services, perform necessary documentations and manage schemes.
Potential to manage tax liability efficiently - India has an extensive double taxation avoidance treaty (DTAA) with the UK. So, pensions earned for UK employment under a QROPS will not be taxed twice. Many Indian QROPS allow withdrawing a lump sum amount from their accumulated pension fund after retirement without any tax implications in India. It is tax-efficient.
Benefits of estate planning - Unlike the UK, India has no inheritance tax. So, QROPS allows transferring a larger portion of pension funds to its beneficiaries.
Leveraging India's strong growth potential - The Indian economy is on a strong long-term growth trajectory, suitable for investments for retirement planning. QROPS allows easy access to a wide range of investment opportunities available to Indian pension schemes.
Cons: risks of choosing QROPS
Indian QROPS are not entirely free of risks or concerns. Some of the key areas that Indians planning to transfer their UK pensions to India should be careful about are,
Limited flexibility in equity investments - Indian QROPS offer only Unit Linked Plans (ULIPs) for equity investments. Direct investment in equity shares and mutual funds is not allowed. This may increase transaction costs.
Transfer charges - Except for a few exempt categories, the UK authority levies a 25% overseas transfer charge on the entire value of the transferred fund.
Restricted to private workplace and personal pensions only - State pensions are not eligible for transfer to QROPS.
Advised by authorised financial advisors - It is mandatory for individuals transferring Defined Benefit schemes with a transfer value exceeding £30,000 to seek professional advice from authorised financial advisors. The advice has to be taken before the transfer. The purpose of this restriction is to protect the financial interests of individual investors. However, it costs money.
HMRC regulations - The HMRC periodically reviews and updates the list of QROPS. So, the availability of schemes may change over time.
What are the alternatives to QROPS?
UK-based NRIs and UK expats planning to move to India can choose any of the following two options to manage their pension investments in the UK.
Not transfer the UK pension:
Let it stay invested in the UK. Claim the benefits once you reach the state pension age. Pension will be remitted in British Pounds and will be taxed as per the India-UK DTAA.
Invest in International Self-Invested Personal Pension (SIPP) schemes:
These pension schemes are HMRC-recognised and regulated by the Financial Conduct Authority (FCA). SIPPs are suitable for non-residents and UK expats as they accept foreign addresses and also transfer pensions in foreign currencies to international banks. Besides, SIPPs allow investors flexibility in how their funds are invested.
How to decide whether to use a QROPS or not?
The final decision on how to manage UK pensions in India may vary with the long-term plans of individual investors. The broad suggestions will be as follows:
Moving to India permanently or for a longer period of time : Transferring to QROPS is beneficial.
Staying in India for a shorter period or not sure about future plans - Do not transfer and let the pension stay invested in the UK, or consider investing in International SIPPs for better flexibility.
It is crucial to weigh all the available options while making decisions to transfer your UK pension. Unnecessary transfers of pension funds can be detrimental to long-term wealth accumulation and retirement planning. Always check the latest HMRC lists on QROPS and consult with professional financial advisors for better protection of your financial assets.
