India-bound UK NRIs invest big in transferable pensions

India-bound UK NRIs invest big in transferable pensions thumbnail
MUMBAI: Indians living in Britain who intend to return home have been pouring funds into Qualified Recognised Overseas Pension Scheme, which allows taxfree transfer of UK pension fund to any other country.

The scheme, popularly known as Qrops, has been approved by Her Majesty’s Revenues and Customs, the government body in the UK that collects and administers taxes.

Indians who have worked in the UK and made some regular contributions from their income towards a pension fund in the country can invest in Qrops of Indian insurance companies. If they plan to move out of the country, the UK government will allow transfer of their pension funds tax-free to approved pension schemes in India or other registered countries. Exide Life, HDFC Life and Max Life are three insurance companies managing fund transfers from the UK into its Qrops.

Exide Life Insurance reported a 612 per cent growth in individual single new business income in the first quarter of the current financial year compared to a year ago. Of this, more than .`100 crore came via Qrops.

“The reason that the lump sum amount has come is because a lot of applications were processed in one go,” said Kshitij Jain, managing director of Exide Life.

“We have been growing our regular business as well,” he said.

The rules were changed in April 2015. Earlier, there was no age bar on people starting their annuity. After the change in rules, people can start their annuity only after 55 years. “There was a spike in single premium in the first quarter due to many applications that were processed and those funds have started flowing in now,” said Amitabh Sharma, head of products at HDFC Life.

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