QROPS Abuse from 2006 to 2025: Scope, Failures, and Case Studies

Introduction and Background

Qualifying Recognised Overseas Pension Schemes (QROPS) were introduced in April 2006 to allow UK pension holders emigrating or retiring abroad to transfer their pensions to an overseas scheme. The intent was to comply with EU free movement of capital rules and to simplify pension portability for expats bbc.com. In practice, QROPS quickly became a “golden goose” for some advisers and investors – offering tax advantages such as gross payment of pension income, avoidance of UK annuity rules, and elimination of the hefty UK 55% death tax after five years of non-UK residency. However, these benefits also opened the door to widespread abuse, including pension liberation scams (early access schemes) and aggressive tax avoidance strategies.

QROPS Abuse Defined: The abuse typically involved transferring UK pensions into overseas schemes with the primary aim of sidestepping UK rules – for example, withdrawing the entire pension fund in cash after a set period, or avoiding UK income tax on withdrawals blevinsfranks.com. Unscrupulous advisers promoted transfers to overseas schemes promising high returns or early access, often via complex structures and opaque investments. By exploiting regulatory gaps between UK authorities and offshore jurisdictions, these schemes put thousands of individuals’ retirement savings at risk and threatened the UK tax base.

Over nearly two decades, UK authorities have identified two main categories of QROPS-related abuse:

Pension Liberation Scams: Schemes that trick people (often under age 55) into transferring pensions overseas and withdrawing funds “liberated” from the normal restrictions. Victims are promised access to cash or high-yield investments, but end up with lost savings and heavy tax penalties (55% unauthorised payment charges from HMRC) committees.parliament.uk committees.parliament.uk. These scams were prevalent especially before 2015 (when UK “pension freedoms” gave over-55s legal access to their pots).
Tax Avoidance Schemes: Arrangements using QROPS in low-tax jurisdictions to avoid UK taxes on pension withdrawals or inheritance. Typically, schemes were set up in jurisdictions offering near-zero tax on pension income for non-residents, effectively enabling UK savers to withdraw large sums tax-free contrary to UK intent bbc.com. This abuse undermined the UK tax system, prompting HMRC crackdowns and new charges to recoup lost revenue.

Scale of Financial Losses and Tax Impacts

Losses to UK Pension Holders: The exact scale of losses is difficult to measure due to under-reporting, but estimates indicate devastating aggregate impacts on individuals. Between 2017 and 2020 alone, over £30 million in losses to pension scammers was reported to Action Fraud committees.parliament.uk. This is a substantial underestimate – the Pension Scams Industry Group (PSIG) estimates around £10 billion has been lost by 40,000 people to pension scams (many involving QROPS or similar structures) since 2015 committees.parliament.uk. Individual victims commonly lose their entire pension savings; the UK Serious Fraud Office found average losses around £120,000 per person in one set of QROPS-linked scams bbc.com. The human impact is stark: victims have lost their life savings, faced old age in financial ruin, and in some tragic cases even taken their own lives committees.parliament.uk. As one victim described after a scam facilitated by advisers in Spain, “It has changed our lives. We are devastated because the fruits of all our life’s work have gone… We are praying that we can get something back – or at least that people will end up in jail.” committees.parliament.uk. Another couple, defrauded into transferring their pensions, said “we haven’t had any compensation and at our age, we are having to start from scratch” committees.parliament.uk. Such stories underline the severe human and societal cost of QROPS abuse, which often targets retirees or expats at vulnerable life stages.

Losses to the UK Tax System: From HMRC’s perspective, QROPS abuse threatened significant tax leakage. By moving pension money abroad and withdrawing it under lenient local rules, individuals could avoid UK income tax and other charges. In one early example, over 300 Guernsey-based QROPS schemes were marketing zero-tax pensions for non-residents, prompting HMRC’s 2012 intervention (see below) bbc.com. In 2017 the UK government explicitly targeted tax-motivated QROPS transfers by introducing a 25% “Overseas Transfer Charge.” This charge, announced in the March 2017 Budget, was “targeted at those seeking to reduce the tax payable by moving their pension wealth to a new jurisdiction.” It was initially expected to raise £65 million in 2017/18 and £60 million in 2018/19 for the Exchequer canadalife.co.uk – indicating the scale of tax avoidance that was thought to be occurring. In practice, the charge has sharply disincentivised abusive transfers (less than 0.5% of QROPS transfers now incur it) and raised only a fraction of the forecast (£2.2m over two years) as scheme volumes dropped canadalife.co.uk canadalife.co.uk. Nevertheless, HMRC has lauded the policy for “closing a loophole” and preventing further tax losses canadalife.co.uk canadalife.co.uk. To illustrate the change: the number of pension transfers to QROPS peaked in 2014/15 at 20,100 transfers (valued at £1.76 billion), then fell dramatically after reforms – by 2018/19 there were only about 5,000 transfers (£640 million) canadalife.co.uk. This indicates that much of the opportunistic, tax-driven transfer activity has been curtailed, protecting the UK tax base at the cost of shrinking the overall QROPS market.

It is worth noting that HM Revenue & Customs also pursues individuals involved in unlawful liberation schemes for back-taxes and penalties. However, this approach has been controversial. In the notorious Ark schemes (2011) – which moved £27 million of pensions from ~500 people into an illicit loan-back arrangement – HMRC’s insistence on levying 55% tax charges on duped members has been described by MPs as “inconsistent and quite unfair” pensionsage.com pensionsage.com. Victims were often unaware they were evading tax; they believed the schemes were HMRC-approved. Yet after the courts ruled the Ark payments were unauthorised, HMRC persisted in taxing members on notional “loans” they never directly received (due to the scheme’s circular lending design) pensionsage.com. In March 2023 a tax tribunal upheld these charges, leaving hundreds of Ark members facing “punitive” personal tax bills on top of their losses professionalpensions.com professionalpensions.com. Critics argue this double-punishment is counterproductive, as many scam victims have no ability to pay and never intended tax wrongdoing pensionsage.com pensionsage.com. HMRC has shown little flexibility so far, citing the need to uphold tax law and deter abuse, but parliamentary inquiries continue to pressure the agency for a more compassionate approach in such cases pensionsage.com pensionsage.com.

Regulatory Failures and Gaps

The persistence of QROPS abuse from 2006 onwards can be traced to systemic regulatory failures and gaps in oversight. Multiple UK agencies – HMRC, the Financial Conduct Authority (FCA), The Pensions Regulator (TPR) – had partial responsibilities, but no single body had full accountability for policing overseas transfers. Meanwhile, offshore financial centres and intermediaries operated under a patchwork of regulations, some markedly lighter than the UK’s. This created a “perfect storm” of fragmented oversight that scammers exploited. Key failures include:

HMRC’s QROPS List – Limited Vetting and Delayed Reaction: HMRC maintains a public list of schemes that have self-certified as meeting QROPS conditions. Inclusion on this list was interpreted by consumers as a stamp of legitimacy. In reality, early on HMRC performed minimal vetting, essentially trusting foreign scheme managers’ assertions rpclegal.com rpclegal.com. This led to debacles like the ROSIIP scheme in Singapore: In 2006 HMRC approved ROSIIP for the QROPS list based on draft documents and a trustee’s claims that local conditions were met. Hundreds of UK pension holders transferred to ROSIIP in good faith rpclegal.com rpclegal.com. HMRC later discovered the scheme was designed to accept non-Singapore residents and enable tax-free withdrawals – contrary to QROPS rules. It delisted ROSIIP in 2008, retroactively rendering all transfers unauthorised and theoretically subject to 55% tax charges rpclegal.com. This sudden reversal left members in limbo and sparked years of litigation. A High Court judicial review in 2013 saw HMRC concede defeat, reinstating ROSIIP transfers to avoid punishing innocent members rpclegal.com rpclegal.com. The ROSIIP saga exposed HMRC’s inadequate due diligence and the whiplash caused by its slow response to abuse. More broadly, HMRC was often reactive – taking years to identify and delist abusive schemes. For instance, QROPS providers in known “tax havens” proliferated from 2006–2011 (Guernsey alone had over 300 schemes), yet HMRC’s major crackdown only came in 2012 bbc.com bbc.com. The agency did tighten QROPS criteria and reporting in 2012–2013 (e.g. requiring ongoing reporting for 10 years, not 5, and mandating schemes serve local residents) bbc.com bbc.com. However, these reforms trailed the inventive promoters, who simply shifted to new jurisdictions or loopholes as old ones closed.
FCA and Advice Regulation – “Passporting” Loopholes: The Financial Conduct Authority, as the UK conduct regulator, had authority over UK-based advisors and providers – but most QROPS transfers were advised by offshore intermediaries not under FCA oversight. Many victims were expats who fell prey to unregulated or cross-border advisory firms. Under EU “passporting” rules (pre-Brexit), a financial firm licensed in one EU state could operate in others with minimal additional regulation. Scam promoters abused this: for example, a Slovakian firm tied to Cornhill Management obtained an FCA passport to offer pension services in the UK, lending a veneer of respectability while actually funneling UK pensions into dubious overseas investments academyoflifeplanning.blog academyoflifeplanning.blog. In one case, a British retiree (“Gary”) was told his Gibraltar/Slovakia QROPS arrangement had full FCA and HMRC approval – none of which protected him when the trustee mismanaged funds and went bust academyoflifeplanning.blog academyoflifeplanning.blog. When things went wrong, regulators passed the buck: the FCA told Gary to contact the Slovak regulator; the Slovak authorities provided no help; HMRC said it only handles tax matters; the UK Financial Ombudsman and compensation schemes couldn’t assist because the entities were offshore academyoflifeplanning.blog. This Kafkaesque cycle of responsibility avoidance is sadly common. The FCA issued alerts (e.g. 2016 guidance on overseas advisers targeting UK DB pension transfers), but had little power to stop unlicensed foreign firms from luring UK savers. Only in 2019 did the FCA gain limited powers to intervene in some overseas transfer advice, and Brexit ended passporting – yet the fundamental gap remains: if an adviser or scheme is outside the UK, UK consumer protections often don’t apply. As a result, countless expats were sold high-risk pension investments by intermediaries in Spain, Cyprus, Dubai, etc., operating without proper regulation. The case of Continental Wealth Management (CWM) – an unlicensed advisory in Spain that advised on thousands of UK pension transfers into risky funds – exemplifies this gap. CWM collapsed in 2017, leaving clients with heavy losses; because the advice was given outside the UK, victims initially had no recourse to the UK’s Financial Ombudsman Service (FOS) or Financial Services Compensation Scheme (FSCS). (Some relief has come indirectly, as we’ll see in the Malta case study, but only after years of legal battles.)
The Pensions Regulator (TPR) and Statutory Transfer Rights: TPR, which oversees UK occupational pension schemes, faced a vexing legal framework that initially compelled trustees to approve transfers even when scam signs were present. Prior to recent reforms, if a receiving scheme was on HMRC’s QROPS list (or otherwise technically met the rules), a UK pension trustee had to allow the transfer at the member’s request – the member’s statutory right trumped any concerns. Fraudsters knew this and engineered transfers to appear legitimate on paper. TPR and industry groups did issue scam warnings and best-practice guidance (Project Bloom, the multi-agency taskforce on pension scams, was launched in 2012 to share intelligence). Trustees began scrutinizing transfer requests and often spotted “red flags” – e.g. an unregulated overseas adviser, or a transfer to a small scheme in a far-flung country with no connection to the member committees.parliament.uk committees.parliament.uk. But until 2021, trustees had limited ability to block or delay such transfers; at best, they could warn the member or require signing an indemnity. As one industry submission noted, this led to “many millions of pounds being paid… to international SIPPs/QROPS of concern, because of the legal right to transfer”, even when the sending scheme strongly suspected a scam committees.parliament.uk committees.parliament.uk. This regulatory gap persisted for years, fueling the scam market. It was only with an amendment in the Pension Schemes Act 2021 – over 15 years after QROPS began – that the government empowered trustees to halt transfers where clear scam indicators (red flags) are present committees.parliament.uk. These new regulations (effective Nov 2021) allow transfers to be stopped or paused for extra counseling if, for example, the destination is a high-risk jurisdiction or an unregulated adviser is involved committees.parliament.uk. Early evidence suggests this is a significant step in choking off fraudulent QROPS transfers at source, though consistent implementation is key.
Coordination Across Jurisdictions – Gaps and Recent Progress: QROPS abuse thrived in the gaps between jurisdictions. A scam might involve a UK pension, moved to a scheme in one country (e.g. Malta or Gibraltar), invested through a bond in another (e.g. Isle of Man or Cayman), on advice from a firm in a third country (Spain or UAE). Each regulator could claim the core issue was someone else’s problem. For a long time, no global or even EU-wide mechanism existed to jointly oversee such chain. Project Bloom helped domestically by bringing together HMRC, FCA, TPR, police, and others to share data on scams. Internationally, however, responses have been uneven. The mid-2010s saw especially poor coordination – scammers freely arbitraged regulatory differences. Recently there are signs of improvement: law enforcement in Spain and New Zealand have initiated criminal proceedings against key figures behind cross-border pension scams committees.parliament.uk committees.parliament.uk. Notably, Spanish prosecutors have charged principals of Premier Pension Solutions and CWM (firms run by British expats) for fraud and falsification in connection with QROPS transfers committees.parliament.uk. New Zealand’s Serious Fraud Office is prosecuting the Penrich Global case (a ~$100m investment fraud linked to the “Evergreen” QROPS scam masterminded by a UK adviser) committees.parliament.uk committees.parliament.uk. Meanwhile, authorities in Hong Kong are examining a pension scheme tied to the UK-based Blackmore Bond scandal committees.parliament.uk. These cases underscore that QROPS scams were an international affair, and only now are various jurisdictions slowly “waking up” to pursue the perpetrators committees.parliament.uk. From a regulatory standpoint, a recurring victim complaint is that each agency claims it’s not their remit – as we saw with Gary’s case across FCA, HMRC, Gibraltar, etc. There is a growing chorus (including a 2021 House of Commons committee report) calling for a more unified approach – possibly a single “pension scam centre” to coordinate intelligence and enforcement across borders committees.parliament.uk committees.parliament.uk. Absent such coordination, victims of QROPS abuse have often found themselves falling into a void of justice, with no regulator taking ownership once money has left the UK.

High-Risk QROPS Jurisdictions in Focus

While QROPS can be established in any country that meets HMRC requirements, a few jurisdictions became notorious hubs for abuse due to their tax laws, regulatory regimes, or aggressive pension industry. Below we examine key locations frequently involved in QROPS schemes – Malta, Gibraltar, Australia, and the Isle of Man – and how each fits into the larger global context of pension transfers and scams. (We also note historical issues in others like Guernsey and New Zealand that shaped current policy.)

Malta: Since the 2010s, Malta has emerged as one of the largest QROPS markets globally, leveraging its status as an EU member with a wide network of double taxation treaties (over 70 DTAs) cameronjamesusa.com cameronjamesusa.com. Malta actively positioned itself as a reputable yet flexible QROPS jurisdiction, attracting thousands of UK expats’ pensions. Its appeal lies in tax efficiency combined with regulation: Maltese QROPS are tax-resident in Malta, which often results in low effective tax on pension income (sometimes as low as 5% or less for non-residents, depending on treaties), while still being under an EU regulatory framework. By 2015, after HMRC’s purge of Guernsey schemes, industry experts noted Malta (and Gibraltar) were “typical destinations” for expat pension transfers committees.parliament.uk. However, the Maltese system was not immune to abuse. A prominent example is the case of Continental Wealth Management (CWM), the unlicensed Spanish adviser that funneled UK pensions into high-risk investments via Maltese QROPS. Maltese authorities took a noteworthy step: in 2018–2020, the Maltese Financial Arbiter investigated and found that Momentum Pensions Malta (a QROPS provider) failed to protect 55 CWM clients’ funds committees.parliament.uk committees.parliament.uk. The Arbiter concluded that Momentum had breached its duties as trustee by allowing an unsuitable, high-risk investment portfolio (including esoteric structured products) within these pension schemes committees.parliament.uk committees.parliament.uk. Although Momentum did not give the advice, it had clear obligations to vet the investment choices for prudence and diversification, especially since the scheme was meant for retirement provision committees.parliament.uk committees.parliament.uk. By not intervening, the trustee “contributed in part to the losses.” In a landmark ruling, the Arbiter ordered Momentum to compensate 70% of the losses suffered by the 55 investors committees.parliament.uk committees.parliament.uk. This decision – effectively holding a QROPS provider partially liable for not preventing a scam – sent ripples through the industry. It signaled that Malta was willing to impose accountability on its pension firms, a contrast to some other jurisdictions. The case also illustrates how Malta, despite being a “well-regulated” jurisdiction on paper, became a hub for UK pension scams perpetrated by expat advisors. The CWM saga has prompted Maltese regulators to tighten oversight on incoming transfers and ensure local providers perform rigorous due diligence. Malta remains a popular QROPS base (its extensive treaty network makes it especially attractive for British retirees in countries lacking a local QROPS), but the Maltese authorities now acknowledge the risks and have started coordinating more with UK and EU counterparts to spot and stop abuses.
Gibraltar: This small British Overseas Territory turned into a QROPS centre in the aftermath of HMRC’s 2012 reforms. Prior to 2012, Gibraltar had been absent from the QROPS list because its domestic pension rules didn’t tax benefits – which HMRC viewed as a zero-tax loophole. In late 2012, Gibraltar changed its laws to impose a minimum 2.5% tax on pension benefits for residents and non-residents alike gibraltarlaw.com. This tweak satisfied HMRC’s requirement of equal tax treatment (preventing a repeat of Guernsey’s “tax-free for foreigners” model), and Gibraltar was granted QROPS status. It soon became a favored jurisdiction alongside Malta. Gibraltar’s advantages include English-speaking regulation, a cadre of pension administration firms, and proximity to the large expat community on the Costa del Sol in Spain. By mid-2010s, numerous Gibraltar QROPS were set up, and some local providers (e.g. STM Fidecs, Castle Trust) handled thousands of UK pension transfers. Unfortunately, Gibraltar also saw scandalous mismanagement by some trustees. A striking case is that of Castle Trust & Management, a Gibraltar-based professional trustee for two QROPS (the Equus and Metro schemes). These schemes, promoted by a Cyprus-registered advisory firm (Montegue Smythe) operating out of an address in England, lured in 62 UK pension investors international-adviser.com international-adviser.com. The investors’ pensions were transferred to the Gibraltar QROPS and then concentrated in unregulated, high-risk investments – including a fund called Elysian – that proved disastrous international-adviser.com international-adviser.com. Many accounts plunged into debit due to extremely high charges and losses, prompting the investors to allege they were victims of a scam international-adviser.com. Since most victims resided in the UK, they attempted to sue Castle Trust in the UK High Court for negligence/fraud. However, in 2021 a judge ruled that the case fell under Gibraltar’s jurisdiction and could not be heard in Britain international-adviser.com international-adviser.com. This jurisdictional hurdle epitomizes the challenges faced by victims: despite UK connections (the advice was essentially given on UK soil, and the harm suffered by UK residents), the legal accountability lay offshore. Gibraltar’s own regulatory response has been mixed. The Gibraltar Financial Services Commission did eventually investigate some pension providers, and Gibraltar’s courts have handled liquidation of failed schemes, but outcomes have been opaque. One positive development is that STM Fidecs (a major Gibraltar QROPS administrator) filed a claim in Gibraltar to recover “misappropriated” assets related to the Trafalgar Multi-Asset Fund, a fund linked to another cross-border scam under UK SFO investigation committees.parliament.uk committees.parliament.uk. This suggests Gibraltar firms themselves have begun pursuing the bad actors (in this case possibly the investment managers or introducers) through civil action – effectively trying to claw back money for victims. There have also been industry fears that Gibraltar’s entire QROPS status could be threatened by HMRC if abuses aren’t controlled moneymarketing.co.uk. As of 2025, Gibraltar remains a QROPS jurisdiction of note, but the volume of new transfers is much reduced post-2017. The territory’s reputation suffered from these scandals, and it faces pressure to demonstrate that Gibraltar-based schemes are not a weak link in the regulatory chain.
Australia: Australia became an important (and somewhat unique) QROPS destination due to the large number of UK emigrants retiring there. In the late 2000s and early 2010s, Australia had over a thousand QROPS schemes, mostly self-managed superannuation funds (SMSFs) set up by individuals who moved to Australia. These transfers were usually legitimate – aimed at consolidating pensions for those genuinely settling abroad. However, a regulatory hiccup in 2015 led to what was dubbed the “Australian QROPS cull.” In April 2015, HMRC tightened QROPS conditions, requiring that no benefits be paid before age 55 except on ill-health grounds international-adviser.com international-adviser.com. The issue was that Australian superannuation rules allow early access in cases of “serious financial hardship” (an emergency provision). This technical non-alignment meant that virtually all Australian schemes no longer met the QROPS criteria. In July 2015, HMRC suspended and then delisted 3,000+ QROPS schemes worldwide, including around 1,600 in Australia (reduced to just 1 scheme!) international-adviser.com. This drastic action froze UK-to-Australia pension transfers, stranding many would-be transferees. It was not about deliberate abuse by Australia, but a precaution against any potential loophole whereby someone could withdraw early under hardship rules. Over the next year, Australian providers and the government worked on a solution. A special type of SMSF that only accepts members aged 55+ (thus inherently preventing early withdrawal) was developed. By September 2015, HMRC had started adding Australian QROPS back one by one – for example the Wynns Age 55 Super Fund was among the first, bringing Australia’s count from 1 to 2, then steadily upward international-adviser.com international-adviser.com. This episode demonstrated HMRC’s zero-tolerance approach by then to any QROPS loophole, even at the cost of disrupting bona fide retirees. There is little evidence that Australia was a center of pension scam promotion (unlike the others); rather, its prominence came from genuine demand. That said, some scammers did target UK expats in Australia too – often persuading them to transfer UK pensions into risky Australian investments or via third-country schemes. Australian regulators (like ASIC) have been on alert for UK pension transfers involving unauthorized advisors. As of today, Australia’s QROPS offerings are mostly compliant and used for their intended purpose. The legacy of the 2015 cull is a highly cautious approach: as one adviser noted, any new Australian QROPS must strictly ensure members are 55 or older, aligning with UK rules international-adviser.com international-adviser.com. Australia thus illustrates how a jurisdiction can be high-volume for QROPS without being “abusive” – and how HMRC’s broad-brush policy changes impacted even low-risk countries.
Isle of Man: The Isle of Man, a UK Crown Dependency, was an early entrant into the QROPS market and, like Guernsey, initially tried to leverage its tax regime to attract pensions. Before 2012, IoM schemes often offered tax-free withdrawals for non-residents (while taxing locals). Anticipating HMRC’s crackdown on such disparity, the Isle of Man introduced a conditional 20% tax charge on QROPS benefits. This was known as the “50C” rule (based on an IoM Income Tax Act section) and meant that even non-resident members would nominally be taxed at 20% on pension income – thereby satisfying HMRC that the IoM wasn’t running zero-tax export schemes. The strategy worked: unlike Guernsey, which lost most QROPS in 2012, the Isle of Man retained HMRC approval for dozens of its QROPS. Consequently, the IoM became a preferred jurisdiction especially for QROPS aimed at wealthier individuals, sometimes those with large balanced pension funds seeking a well-regulated trust structure. The Isle of Man’s financial industry is more institutionalized (with major trust companies and insurers present), so outright “scam” schemes have been less reported than in places like Malta or Gibraltar. However, the IoM has figured in several tax avoidance and investment controversies. For instance, many QROPS or overseas pension bonds marketed to UK expats involved an Isle of Man life insurance wrapper – this allowed investments to grow tax-free and often escaped UK oversight. A current example is a group lawsuit (in 2022) by UK and international investors against life insurers Quilter International and Friends Provident International (FPI), alleging they facilitated the mis-selling of high-risk funds via insurance wrappers based in the IoM committees.parliament.uk committees.parliament.uk. The claim says unsophisticated British retirees were sold complex, volatile funds (branded as “life insurance” products) that were inappropriate, leading many to lose their life savings committees.parliament.uk committees.parliament.uk. The sales purportedly “sidestepped British regulations” by using Isle of Man vehicles, to the tune of over £100 million ($124m) of such products sold committees.parliament.uk committees.parliament.uk. This highlights that, even if the IoM QROPS themselves were compliant, the island was part of a wider ecosystem enabling UK advisers to work around stricter UK rules. The Isle of Man Financial Services Authority does regulate pension schemes and insurance products on the island, but historically its investor protection standards were not as rigorous as the UK’s (one reason scammers liked IoM policy bonds). The IoM has been gradually raising its regulatory game under international pressure. Still, in the context of QROPS abuse, the Isle of Man served as a facilitator – a jurisdiction whose structures (trusts, bonds, etc.) were used within larger scam or avoidance schemes devised elsewhere. It shows that tackling pension abuse isn’t just about the QROPS host jurisdiction alone, but also about the intermediate jurisdictions that provide investment vehicles.
Others (Guernsey, New Zealand, Cyprus, etc.): Some other jurisdictions played a significant historical role. Guernsey was effectively the first hub of QROPS exploitation – by 2011 it had ~300 schemes catering mostly to non-residents. In 2012 HMRC struck back, slashing Guernsey’s approved QROPS from 300 to only 3 schemes overnight bbc.com. This decimated Guernsey’s pensions industry (costing an estimated 200 local jobs) but closed a major tax loophole bbc.com bbc.com. Guernsey tried to create alternative products (such as 157E “vanilla” pensions and an offshoot in Malta) but never regained its dominance. New Zealand also saw early abuse: certain NZ QROPS were deliberately “unlocked” with no withdrawal limits, allowing 100% lump sums after the 5-year UK reporting period blevinsfranks.com blevinsfranks.com. In 2009 and 2010, many advisers pushed NZ transfers for this reason. HMRC responded by warning it might remove NZ from the QROPS list entirely blevinsfranks.com blevinsfranks.com. Indeed, by 2012 HMRC culled numerous NZ schemes. Going forward, QROPS in NZ are tightly monitored (and subject to the 2017 transfer charge if the person doesn’t actually emigrate there). Cyprus had a brief stint as a QROPS hotspot until HMRC also cracked down in 2012 (similar to Guernsey’s case) guernseypress.com. Isle of Man (covered above) adjusted its laws and remains active. Ireland and certain European countries host some QROPS mainly for legitimate purposes (e.g. Ireland for Irish expats in UK, etc.), with minimal scandal associated. In summary, the high-risk hubs have largely been those combining low tax, a willingness to host foreign pension assets, and sometimes lighter oversight – a profile that Malta and Gibraltar fit, after Guernsey was eliminated. The UK’s 2017 imposition of the 25% transfer tax for moves outside the EU/EEA further curtailed the appeal of far-flung locales: it effectively corralled new QROPS into the EEA/Gibraltar (where the charge doesn’t apply if the member also resides in the EEA). This is one reason Malta and Gibraltar saw continued business post-2017, whereas, say, the Caribbean schemes virtually vanished. Post-Brexit, even Gibraltar and Malta could become less attractive since transfers to them from a UK resident now incur the 25% tax (because the UK is no longer in the EEA). This regulatory evolution means the era of mass QROPS tax arbitrage is largely over – but many victims are still dealing with the fallout of past abuses.

Notable Case Studies and Scandals

Throughout the QROPS saga, investigative journalists, parliamentary committees, and regulators have unearthed several high-profile cases that illustrate how the abuses occurred and the consequences for victims and perpetrators. Below are some of the most significant examples, spanning the spectrum of pension liberation scams and tax-avoidance schemes:

Ark Pension Liberation Schemes (2011): The Ark case was one of the first major pension scam unveilings in the UK and did not directly involve QROPS, but rather a domestic scheme – yet it set the stage for many QROPS scams to follow. A consortium of six UK occupational schemes (branded with names like Capstone, Evergreen, etc., ironically) was created by Ark Business Consulting, ostensibly for deferred members. In reality, Ark used a “Maximising Pension Value Arrangements” (MPVA) loophole to allow members to effectively swap loans and access their pensions before 55 professionalpensions.com professionalpensions.com. Over £27 million from ~500 people’s pensions was moved into Ark schemes, and at least £9m was paid out as cash “loans” to members (amounts that would otherwise be locked until retirement) professionalpensions.com professionalpensions.com. TPR intervened in 2011, appointing Dalriada Trustees to halt the scheme, and the High Court confirmed these payments were unauthorised and unlawful professionalpensions.com professionalpensions.com. While Ark’s operators were eventually barred, the members themselves were hit with devastating tax bills: HMRC pursued 55% unauthorised payment charges on the loans. As discussed earlier, a 2023 tribunal upheld this taxation, leaving ordinary people – who had been told it was all above board – facing life-altering debts to the taxman. The Ark case exposed regulatory gaps (it pre-dated pension freedoms) and prompted both TPR and HMRC to sharpen their tools. It also gave a template that some QROPS promoters would mimic: multiple parallel schemes, circular loan structures, and exploiting the letter of pension law to defeat its spirit. The human impact was illustrated by testimonies to Parliament: “no member [of Ark] has ever answered ‘to evade tax’” when asked why they got involved, yet they ended up with ruinous consequences pensionsage.com pensionsage.com. Ark showed that scam victims often had no criminal intent – they were preyed upon, a theme that recurs in later QROPS cases.
BBC Panorama & Mainstream Media Exposés (2015–2018): As pension freedoms came into effect in 2015, investigative journalism shone a light on new “rip-off” schemes – many with QROPS elements. A notable BBC Panorama episode “Pension Rip-Offs Exposed” (July 2016) went undercover to reveal how companies were abusing the system to access people’s retirement pots bbc.co.uk. The program showed an apparent “free pension review” that funneled a saver into a high-risk overseas property investment via a self-invested pension (SIPP) – a pattern mirrored in QROPS transfers for expats. Victims interviewed had their retirement plans destroyed, losing in some cases hundreds of thousands of pounds. Panorama and subsequent reports highlighted common hallmarks: cold-calling, pressure to act quickly, promises of unrealistically high returns, and complex offshore arrangements that obscured fees. Another BBC investigation in 2017 reported that the Serious Fraud Office (SFO) was looking into a cluster of QROPS-linked scams – including Capita Oak, Henley Retirement Benefits, Westminster Pension, and Trafalgar Multi-Asset Fund – in which at least 1,000 people lost over £120 million bbc.com bbc.com. These schemes typically convinced people to transfer out of safe defined benefit pensions into HMRC-listed QROPS or UK SIPPs, then invest in speculative ventures like storage units, overseas property, forestry, or eco-friendly bonds. Victims were baited with 8–12% “guaranteed” returns and sometimes cash bonuses bbc.com bbc.com. In reality, their money either vanished into the promoters’ pockets or was frozen in failing projects. The Capita Oak and Henley schemes, for example, invested heavily in leased storage pods; both were wound up, and nearly all funds were lost. Panorama’s coverage put political pressure on regulators, directly contributing to government consultations on tightening transfer rules and banning pension cold-calling (which the UK did in 2019). It also personalized the issue: viewers saw retirees in tears, having to sell their homes or come out of retirement because their pension was gone. These media exposés were crucial in overcoming the earlier lack of data on scams (Action Fraud’s figures were low) by asserting that actual losses were an order of magnitude higher – which PSIG later confirmed with multi-billion estimates.
Evergreen QROPS Scam & Stephen Ward (2015): Among the most infamous individual QROPS scandals was the “Evergreen” pension scheme, closely tied to serial scammer Stephen Ward. Ward was a UK financial adviser previously implicated in Ark and other schemes; after being disqualified, he resurfaced offshore. The Evergreen QROPS was set up in ~2015 and marketed primarily to British expats through Continental Wealth Management (CWM) in Spain. It promised a way to release cash or invest for high returns. Unknown to the victims, their pensions were being filtered into an illicit web – including the Penrich Global Macro Fund in New Zealand (which turned out to be a Ponzi-like fraud). The scale became apparent when New Zealand authorities froze Penrich in 2019; it was missing at least NZ$80–100 million. Evidence showed Evergreen QROPS funds (run by Ward) were funneled into Penrich – essentially a transcontinental scam pipeline committees.parliament.uk committees.parliament.uk. In Spain, Ward’s associates at CWM are facing criminal fraud charges, indicating the cross-border law enforcement cooperation starting to happen committees.parliament.uk. A submission to the UK Parliament described the Evergreen scheme as “run by Stephen Ward and promoted by Continental Wealth Management”, linking it to the larger SFO investigation committees.parliament.uk. This case is emblematic of how one mastermind could exploit QROPS internationally: Ward leveraged regulatory gaps in Gibraltar (where some of his schemes were based), Malta, and New Zealand, always staying one step ahead of any single regulator. Only now, years later, are the pieces being put together through multi-jurisdictional action. For victims of Evergreen, justice has been slow – but the fact that prosecutions are underway in multiple countries offers some hope that the architects might finally be held accountable. It also serves as a cautionary tale that not all QROPS abuses were stopped by the 2012 or 2015 rule changes – some simply evolved into more complex frauds.
Trafalgar Multi-Asset Fund & Related Schemes (2013–2018): The Trafalgar Multi-Asset Fund (TMAF) was a Cayman Islands-based fund that became the linchpin of another major scandal. It was sold as a diversified investment for pension money, but in reality was high-risk and allegedly used to siphon money. Many victims accessed TMAF via QROPS in Gibraltar or other offshore pension trusts. The UK Serious Fraud Office opened an investigation into TMAF and a connected scheme called the Westminster Pension Scheme bbc.com. These were among those highlighted by the BBC in 2017. What makes Trafalgar particularly noteworthy is the legal aftermath: as mentioned, Gibraltar’s STM Fidecs sued 13 individuals in the Gibraltar courts to recover money related to Trafalgar committees.parliament.uk. This unusual step – a trustee going on the offensive – came after British SFO and FCA pressure. It implies that large sums were misappropriated (the term used was “misappropriated money” committees.parliament.uk) and that insiders or associates of the fund are being pursued. While details are complex, it appears TMAF was used as a “common dumping ground” for multiple pension scams – a place where different crooked advisers’ client money ended up, to be invested in a mishmash of property loans, Mauritius ventures, Florida real estate, etc., as the BBC reported bbc.com bbc.com. By bundling money in this way, fraudsters could hide losses and pay themselves fees. The unraveling of Trafalgar has reinforced a key lesson: follow the money beyond the QROPS itself. Stopping abuse isn’t just delisting a rogue QROPS – one must also pursue the investment vehicles and fund managers that collude with the scammers. As of 2025, outcomes of the Trafalgar case are still pending, but it has led to greater scrutiny of how QROPS funds are invested post-transfer. There is growing advocacy that offshore funds holding UK pension money should meet equivalent transparency and standards as UK-regulated investments, to prevent future “Trafalgars.”
Victims’ Fights for Compensation: A final aspect of the saga is the struggle of scam victims to obtain redress. Because many QROPS scams fall outside UK jurisdiction, victims often can’t access the UK’s safety nets (FOS or FSCS) unless a UK-regulated entity was at fault. Some have resorted to creative avenues: for example, a group of ~30 victims of CWM’s advice (the Malta CWM case) crowdfunded to bring their complaints before the Maltese Arbiter – successfully winning the award of 70% of losses as noted earlier committees.parliament.uk. In another example, as referenced, a group litigation in the Isle of Man is being funded to sue Quilter International and FPI for mis-selling investments that wiped out pensions committees.parliament.uk. There are also cases in the UK High Court: in 2018, the High Court ordered Friendly Pensions Ltd. (operators of some scam schemes) to pay back £13.7 million to victims committees.parliament.uk committees.parliament.uk, and in 2020 the FCA won a judgement against Avacade (an illegal introducer) ordering over £10.7 million restitution to defrauded investors committees.parliament.uk. These enforcement actions show progress, yet actual recovery of funds remains difficult – often the money is long gone, and firms insolvent. Parliament’s Work & Pensions Committee has pressed for a central “pension scams cold-calling ban” (achieved) and better victim support, including exploring the idea of a Fraud Compensation Fund expansion to cover personal pension scams. Currently, the UK Fraud Compensation Fund can only assist occupational scheme scams under certain conditions, leaving a gap for QROPS victims. As one expert told MPs, the landscape of support is fragmented and confused, and many victims feel abandoned once they have reported the crime committees.parliament.uk committees.parliament.uk. The situation is slowly improving with new legal precedents and cross-border cooperation, but it underscores that the consequences of QROPS abuse persist today – in ongoing court cases, unrecovered losses, and lives permanently altered.

Conclusion and Ongoing Developments

Since the introduction of QROPS in 2006, the system has come full circle – from a facilitator of legitimate pension transfers, to a symbol of widespread pension abuse, and now towards a more controlled and cautious regime. The UK government and regulators did eventually enact strong measures (e.g. 2017 transfer tax, 2021 transfer restrictions) that have largely closed the doors on the most egregious tax-avoidance schemes and liberation scams. QROPS transfers today are a fraction of their former volume, and typically used by genuine expats in well-regulated setups.

However, this reckoning came only after tens of thousands of people were affected. Regulatory failures – slow reaction, jurisdictional blind spots, and lack of coordination – enabled a lost decade (or more) of pension scams that raided an estimated £10 billion from British savers committees.parliament.uk. The societal impact has been severe: many ordinary families’ retirement plans were wrecked, trust in the pension system was shaken, and the UK taxpayer had to spend resources on pursuing complex fraud cases across the world. As MPs observed in 2021, “Most of us are at risk of becoming the victim of a pension scam”, and five years on from pension freedoms the government was still scrambling to put protections in place committees.parliament.uk committees.parliament.uk.

Looking forward, there are positive signs. Enforcement is catching up: international investigations (Spain’s, New Zealand’s, etc.) are holding scammers to account, and courts have shown willingness to impose liability on enabling parties like pension trustees or insurance firms when warranted. Regulators in high-risk jurisdictions, mindful of reputational damage, have tightened their rules – e.g. Gibraltar and Malta now proactively monitor their QROPS providers, and cooperate more with HMRC. In the UK, a Pension Scams Action Centre has been proposed to unify efforts, and intelligence-sharing through bodies like Project Bloom continues to improve committees.parliament.uk committees.parliament.uk. Meanwhile, public awareness is higher: thanks to media campaigns and government warnings (such as the FCA’s “ScamSmart” materials), more people recognize the red flags of pension scams and where to seek guidance.

Yet challenges remain. Online advertising of illicit schemes is a moving target – scammers now lure victims via social media and emails, which are harder to police. The COVID-19 pandemic and cost-of-living pressures have given fraudsters new narratives (e.g. “safe haven” investments overseas) to trick anxious savers. And a considerable number of “legacy” QROPS victims are still fighting for justice or grappling with HMRC tax demands. As one pension lawyer noted, the overall policy has been reactive and “very much hindered if the scale of the issue is not fully understood.” committees.parliament.uk Continued data gathering and transparency is needed so that the true scale of pension abuse is recognized and not repeated.

In summary, the story of QROPS abuse from 2006 to 2025 is a cautionary tale of good intentions subverted by opportunists, and of regulators catching up only after substantial damage was done. It highlights the importance of holistic oversight in a globalised financial world – pensions are portable, and regulation must be equally agile across borders. Most importantly, it underscores that behind every statistic of “£X million lost” are real people: retirees, nurses, teachers, small business owners – who worked hard for decades and had their future stolen by fraud. The reforms of recent years aim to ensure that such a tragedy on this scale “never happens again,” but vigilance must remain high. As one expert warned during the inquiry: “Much has been made of the power of litigation funding to level the playing field when individuals take on major companies… Potential claimants will be able to seek redress for their lost investments without worrying that, by seeking justice, they will be plunged into further difficulty.” committees.parliament.uk committees.parliament.uk. That sentiment captures both the pain of the past and the hope for the future – that those wronged by QROPS abuses can find remedy, and that future pension savers will be far better protected than those who came before.

Sources: Public domain reports and articles, including BBC News & Panorama investigations, House of Commons Work & Pensions Committee publications, HMRC and FCA announcements, Gibraltar/Malta regulatory reports, and expert submissions (Phoenix Group, PSIG) to Parliament, as cited throughout the text. Key references include bbc.com bbc.com blevinsfranks.com rpclegal.com pensionsage.com international-adviser.com bbc.com committees.parliament.uk canadalife.co.uk canadalife.co.uk committees.parliament.uk international-adviser.com committees.parliament.uk, among others detailed above. These provide a comprehensive evidence base documenting the extent of QROPS-related losses, regulatory shortcomings, jurisdictional issues, and the case studies mentioned. Each citation corresponds to a publicly available source for further reading on that point.

Your Money or Your Life

Unmask the highway robbers – Enjoy wealth in every area of your life!

By Steve Conley. Available on Amazon. Visit www.steve.conley.co.uk to find out more.