The Sovereign Group

An independent review by our team of experts.

Review summary

The Sovereign Group

Sovereign Group is a Gibraltar-based corporate services company established in 1987.

Sovereign's core business is setting up and managing tax-efficient structures to assist wealth management, foreign property ownership, and cross-border business.

The Sovereign Group has offices or agents in many offshore and onshore financial centres worldwide.

The company mostly provides fiduciary services to high-net-worth individuals and their families.

Sovereign’s clients include expatriates, entrepreneurs and businesses of all sizes.

Sovereign also offers a wide range of services that are natural adjuncts to their main activity, including asset management, financing, and specialist tax advice.

Sovereign currently manage over 20,000 structures for a wide variety of clients – companies, entrepreneurs, private investors or high net worth individuals (HNWIs) and their families – and have assets under administration in excess of US$10 billion.

Overview

Sovereign is a market leader in the provision of pensions with a broad proposition that includes: Self Invested Personal Pensions (SIPPs); Qualifying Recognised Overseas Pension Schemes (QROPS); Qualifying Non-UK Pension Schemes (QNUPS); International Pension Plans (IPPs); and Corporate Pension Plans.

The Sovereign Group offer QROPS, QNUPS, SIPPs and International Pension Plans across five jurisdictions in Malta, Guernsey, Isle of Man, Gibraltar and the UK.

Standard QROPS set up costs are £750 with £900 annual fees.

Sovereign is one of the key, long established and larger providers in the market place, and is able to offer a broad selection of options that some of the smaller firms are not able to match.

This was strengthened by their acquisition of MW Pensions in the Spring of 2016.

Sovereign tend to be more expensive than some of their rivals and, in the past, have not always had an administrative friendly service.

The pros

  • Well established brand in the international pensions market
  • Offers QROPS, SIPPS and International Pension Plans in UK, Malta, Gibraltar, Isle of Man and Guernsey
  • As a larger providers in the market place able to offer a broad selection of options that some of the smaller firms are not able to match
  • Free transfers to any other Sovereign QROPS or SIPP product should client circumstances change

The cons

  • Tend to be more expensive than some of their rivals
  • Termination fees applicable on transfer out to non Sovereign product, typically £1000 / €1000 after three years
FAQs
Which QROPS jurisdictions does Sovereign offer?

Sovereign offers QROPS from Isle of Man, Malta and Gibraltar.

Once the QROPS is established it is possible to transfer seamlessly within the Sovereign QROPS range without charge.

Should I choose a QNUPS instead of a QROPS or SIPP?

Given the UK Inheritance tax exemption, a QNUPS is likely to be particularly attractive to UK domiciled individuals or anyone with UK property to invest in a pension scheme.

This type of arrangement may also be useful for an internationally mobile individual looking for a tax efficient retirement plan in a politically stable and safe jurisdiction.

A QNUPS could also be used where there is a limit on domestic pension contributions.

The UK annual allowance for tax relieved pension contributions is currently capped at just £40,000 for 2015/16 with further restrictions for higher earners from 2016/17.

Similarly, a QNUPS offers an alternative means of funding for retirement for those who are close to exceeding the UK Lifetime Allowance (LTA) for tax relieved savings.

The LTA has suffered a succession of cuts in recent years and is only £1m from April 2016.

If in doubt, seek independent advice about your pension options.

Which QNUPS jurisdictions does Sovereign offer?

Sovereign offers QNUPS from Guernsey and Malta.

Can you give me an overview of Sovereign's Gibraltar QROPS?

Gibraltar is one of the most popular QROPS jurisdictions, underpinned by the regulation of the Gibraltar Financial Services Commission.

Its pragmatic operating framework, low rate of taxation and established financial services industry have all made Gibraltar one of the leading jurisdictions for international pensions.

Sovereign has a long association with Gibraltar and was one of the first companies to receive a professional trustee’s license in the territory.

Gibraltar QROPS at a glance:

Investment Options = Open architecture

Benefit commencement = 55 – 75

Maximum Lump Sum = 30%

Gibraltar tax rate applicable to pension* = 2.5%

Death Benefits Lump sum or survivor’s pension = The taxation of the death benefits depends on the beneficiary’s country of residence and the amount of time the deceased had been non UK resident at the date of death.

(* The pension may also be taxed in the member’s country of residence.)

Sovereign offers the choice of two Gibraltar QROPS:

The Calpe Retirement Benefit Scheme (For Pensions with a value greater than £100,000)

The Calpe Lite Retirement Benefit Scheme (For Pensions with a value less than £100,000)

Can you give me an overview of Sovereign's Guernsey QNUPS?

Guernsey is widely recognised as one of the world’s leading offshore financial services centres underpinned by the regulation of the Guernsey Financial Services Commission (GFSC).

The island is home to many of the industry’s largest and well respected financial services institutions and is on the OECD’s “white list” of countries committed to a fair and transparent tax system.

Guernsey QNUPS at a glance:

Investment Options = Open architecture

Benefit commencement = 55 – 75

Maximum Lump Sum 30%

Guernsey tax rate applicable to pension* = 0%

Death Benefits = 100% lump sum or survivor’s pension

(*For non-Guernsey residents the benefits may create a tax liability in the member’s country of residence.)

Can you give me an overview of Sovereign's Malta pensions?

The robust regulatory framework provided by the Malta Financial Services Authority (MFSA), coupled with Malta’s full EU member status and established financial services industry, makes Malta an extremely attractive jurisdiction for international pensions.

Malta QROPS at a glance:

Investment Options = Open architecture

Benefit commencement = 55 – 75

Maximum Lump Sum = 25%

Malta tax rate applicable to pension* = Up to 35%

Death Benefits Lump sum or survivor’s pension = The taxation of the death benefits depends on the beneficiary’s country of residence and the amount of time the deceased had been non UK resident at the date of death.

(*Maltese tax will not apply where the pension taxing rights are granted to the member’s country of residence under the terms of a double taxation agreement.)

Sovereign offers the choice of two Malta QROPS:

The Centaurus Retirement Benefit Scheme

The Centaurus Lite Retirement Benefit Scheme

Sovereign’s Malta QNUPS:

Malta QNUPS – The Rinella Retirement Benefit Scheme.

Customer reviews
Highly rate Sovereign Group

My family and I use Sovereign's wealth services, as well as their QROPS and QNUPS arrangements.

Whilst we employ the services of a chartered FP as well, I have to say Sovereign Group excels in terms of customer service, attention to detail and levels of professionalism.

I don't doubt I could find cheaper - but could I find better?  Doubtful.

5 star rating in my view.

Expert verdict
Expert Assessment of The Sovereign Group

Our verdict is that Sovereign is able to offer an all-round solution covering the needs of most clients.  

However, it is likely that many existing clients will have received poor investment outcomes given the popularity of Sovereign amongst non-UK advisers. 

This will be indicated by investments that underperform their benchmarks, asset allocations which are too risky and may contain structured products or UCIS funds, unnecessary lock-in periods, and opaque charging structures on both the platform and underlying investments. 

When added to Sovereign pension trustee fees - the reduction in investment returns can be severe.

Read the UK regulators advice on pension transfers.  NEVER deal with a firm that isn’t authorised as a UK pension transfer specialist.

Our advice would be to seek professional fee-based independent financial advice if you have an existing QROP or other solution with Sovereign Pension Trustees. 

We also recommend you have a free, no obligation X-Ray Review™ conducted to give you the information you need to make a decision on the best way forward.

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“With this sort of service you also expect to be paying very high fees, but it’s just not the case. I would definitely recommend AES.”

Jake van den Dries

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