What Are Your Options After Transferring a QROPS to Canada?
Key Takeaways
- UK pensions transferred via QROPS are held in a Canadian RRSP, preserving tax-deferred growth. You can later convert to a RRIF to create structured retirement income, with mandatory conversion by age 71.
- QROPS funds must be held with approved Canadian providers, but within those platforms you have flexibility to choose investments aligned with your risk tolerance and retirement goals.
- You decide when and how to withdraw funds (subject to Canadian tax rules), and RRSPs/RRIFs allow beneficiary designations, simplifying estate planning while HMRC reporting continues for 10 years.
If you’ve transferred your UK pension to Canada under a QROPS arrangement, you’ve already taken a major step toward simplifying your retirement planning. Once your pension arrives in Canada, the funds are placed into a Registered Retirement Savings Plan (RRSP). From there, you gain full control over how your retirement savings are invested and accessed.
1. Leaving the Funds in an RRSP or Converting to a RRIF
At this time, QROPS transfers land in an RRSP, where your investments continue to grow tax-deferred. This mirrors the sheltered status your pension enjoyed in the UK. You can keep the assets invested inside the RRSP until you decide to begin drawing income.
If you’re nearing retirement, you may choose to convert the RRSP to a RRIF. A RRIF allows you to take regular withdrawals and provides a structured approach to retirement income, with required minimum withdrawals each year.
When the funds are invested in a RRSP, you still have full access to your funds and can make withdrawals as needed. You will be subject to income tax on withdrawals (as per CRA guidelines). It is recommended to convert your RRSP to a RRIF when you are ready to start withdrawing regular income each year. You are required to convert your RRSP to a RRIF by the end of the year that you are age 71 (you can delay income from a RRIF until your 72nd year).
2. Investment Options and Providers
Not all Canadian financial institutions can hold QROPS funds due to UK rules, so transfers are restricted to approved providers. These typically include a small number of Canadian insurance companies and investment firms with QROPS-compliant platforms. Within these accounts, you can choose from a range of investment options—from conservative portfolios to diversified growth strategies—depending on your risk tolerance and retirement goals.
At Strata Wealth, we deal with Industrial Alliance for segregated fund investment options and iA Clarington for mutual fund investment options.
3. Flexible Withdrawal Options
Once in Canada, you control how and when you access your pension. RRSP or RRIF withdrawals can be taken as steady income or occasional lump sums. All withdrawals are taxable in Canada, and HMRC reporting requirements continue for 10 UK tax years after the transfer.
4. Estate Planning Advantages
Holding your former UK pension inside an RRSP or RRIF allows you to name beneficiaries, creating a smoother, more efficient estate transfer for your loved ones.
If you’d like guidance on managing your QROPS in Canada, StrataQROPS.com is here to help.