UK Pensions for Expats

What Happens to Your UK Pension When You Move Abroad?

Moving abroad doesn’t mean losing your UK pension. What you have built up stays yours, and in most cases it can be paid to you wherever you live once you reach pension age. What changes is the number of decisions in front of you, and what they cost if you get them wrong.

The right answer depends on the type of pension you hold, how much it is worth, where you live now and where you may live later. A defined contribution pot, a final salary pension and the State Pension are treated very differently. Tax depends on your country of residence as well as UK rules.

This guide sets out your main options for a British pension abroad, from leaving it in the UK to an expat pension scheme such as a SIPP or QROPS, what each involves, and where to look first. It covers expats in Asia, the Middle East, Europe, Australasia and the Americas. Last reviewed.

Your Options at a Glance

Each option is explained below, with a full guide where one is available: · Expat SIPPs ·QROPS · Final salary transfers ·.

Which Pensions Do You Have?

Before choosing an option, list everything you hold. Different pensions are treated differently.

Many people find one or two pensions they had forgotten. Always trace before you decide.

Leaving Your Pension in the UK

For many expats this is the simplest option. Your pension stays under UK rules, there is no transfer to arrange, there is no 25% overseas transfer charge, and any guarantees in the scheme stay in place.

It may suit you if:

• you may return to the UK
• you have a final salary pension with a guaranteed income
• your pension is small, so the cost of moving it could outweigh any benefit
• you are happy with the investments on offer
• you have no clear reason to move it

What to watch for:

• Investment choice. The fund range may be narrower than you would like.
• Currency. If you spend in another currency, exchange rates affect what you receive.
• Contact details. Keep your provider updated with your overseas address so you don’t miss anything.
• Payments abroad. Check how your provider pays you overseas and what it charges.

Leaving a pension where it is isn’t the same as doing nothing. It is a decision, and it should be reviewed when your plans change.

If you leave it, still do these things:

• check the investments every year or two, and make sure they still match your plans and your age
• keep your address and contact details up to date
• review the charges, and compare them with alternatives
• update your beneficiary nominations
• keep a record of every scheme, with account numbers and contact details, somewhere your family can find it

Moving Your Pension to an Expat SIPP

A Self-Invested Personal Pension (SIPP) is a UK pension that lets you choose how your money is invested, rather than limiting you to one provider’s fund range. Some SIPPs are designed for people living overseas, with a wider choice of investments and, in some cases, more than one currency.

Because a SIPP is a UK pension, UK pension tax rules continue to apply and the overseas transfer charge doesn’t arise. That doesn’t remove the need to think about tax where you live.

It may suit you if:

• you want more control over how your pension is invested
• you hold several UK pensions and want them in one place
• you want to stay within the UK pension system
• you are comfortable making investment decisions, or have advice to help

Costs and risks:

• platform or provider fees, investment charges and adviser fees can add up, so compare them in writing
• the value of investments can fall as well as rise, and the decisions are yours
• check that the provider is authorised by the FCA

Read the full guide: Expat SIPP: A Guide for UK Pensions Abroad.

Transferring to a QROPS

A QROPS, or Qualifying Recognised Overseas Pension Scheme, is an overseas pension scheme that meets HMRC’s requirements to receive transfers from UK pensions. For some expats who plan to stay abroad long term, it can simplify retirement planning. For others it adds cost and tax risk.

The main issue is the overseas transfer charge. HMRC can charge 25% of the transferred value unless an exclusion applies. The exclusions are:

• you live in the same country as the QROPS
• the QROPS is an occupational scheme and you work for the sponsoring employer
• the QROPS is set up by an international organisation and you work for it
• the QROPS is an overseas public service pension scheme and you work for a participating employer

The old exclusion for transfers within the EEA and Gibraltar has ended. It only covered transfers requested before 30 October 2024 and completed before 30 April 2025. A charge can also arise later if you move to a country that no longer fits an exclusion, and a transfer can be hard to reverse. Being on HMRC’s published list is not an endorsement of a scheme.

Read the full guide: QROPS for UK Expats.

Final Salary (Defined Benefit) Pensions

A final salary, or defined benefit, pension promises you a guaranteed income for life, worked out by a formula rather than by investment performance. Giving that up is one of the biggest pension decisions you can make.

Transferring to a SIPP or QROPS would swap that guaranteed income for a lump sum that you must invest and draw from yourself. Regulated advice is required before you can transfer safeguarded benefits worth £30,000 or more. Our expat pension transfer guide explains the process.

Before considering a transfer, find out:

• what income the scheme will pay, and from what age
• whether it increases with inflation, and whether it includes a pension for a spouse or partner
• what transfer value you have been offered, and how it is worked out
• whether the income can be paid to you in the country where you live

Leaving a final salary pension in place deserves serious consideration. Read the full guide: Final Salary Pension Transfer for Expats.

Taking Your Pension as Cash

You can usually start taking money from a defined contribution pension from the normal minimum pension age. That is currently 55, and it rises to 57 on 6 April 2028. Some people have a protected earlier age. An offer to release cash before the minimum age is a classic sign of a scam.

Up to 25% of what you take may be tax-free, within allowances. The lump sum allowance is £268,275 for most people. The rest is taxed as income, and taking a large amount at once can push you into a higher tax band.

The country where you live may also tax what you receive. A double tax treaty between the UK and your country can change which of them has the right to tax your pension, so check before you withdraw, not after.

Read the full guide:.

Questions to Ask Yourself Before You Choose

• Where will I live in five years, and in fifteen?
• Might I return to the UK?
• Which pensions have guarantees I would lose by moving them?
• Do I need income now, or can the money stay invested?
• How comfortable am I making investment decisions?
• What do I want to leave to my family?
• What currency will I be spending in?
• Who is advising me, and how are they paid?

If you cannot answer several of these, you are not ready to move a pension. That is a normal place to start.

State Pension and Workplace Pensions

State Pension. The State Pension isn’t a pot you can move. If you have paid enough National Insurance contributions, you can claim it while living abroad and have it paid into an overseas or UK bank account. You choose one country for payment. Whether it increases each year depends on where you live.

Workplace pensions. A pension from a past employer stays with that scheme unless you move it. It may be a defined contribution pot or a final salary scheme, so check which. If you have lost track of an old pension, trace it before deciding anything, and keep each scheme updated with your overseas address.

For retirement income more broadly, see expat retirement planning.

Retiring Abroad: How Your Pensions Fit Together

It helps to think about income, not products. Most people who retire abroad draw on several sources, and each behaves differently.

• Guaranteed income: the State Pension and any final salary pensions. They are predictable, and they form the base that your spending can rely on.
• Flexible income: defined contribution pensions, including a SIPP. You choose how much to take and when, but the money can run out and its value moves with investments.
• Cash reserves: money kept outside your pensions, so you are not forced to sell investments in a poor market.

Questions worth asking: how much of your spending is covered by guaranteed income? What currency will you spend in, and what happens if exchange rates move against you? Will your income keep pace with the cost of living where you live? How would healthcare costs, or a move back to the UK, change the plan?

For a fuller look at income in retirement, see expat retirement planning.

UK Rule Changes That Matter Now

Pension and tax rules have changed a lot recently. These are the changes most relevant to UK pensions held by expats. Last reviewed.

• Lifetime allowance abolished (6 April 2024). It was replaced by separate allowances on tax-free lump sums and lump sum death benefits.
• Minimum pension age rising to 57 (6 April 2028). It is currently 55.
• QROPS and the EEA. The EEA and Gibraltar exclusion from the 25% overseas transfer charge has ended for new transfers.
• Inheritance tax on pensions (from 6 April 2027). Most unused pension funds and death benefits will count towards the value of an estate for deaths on or after that date. Pensions passed to a spouse or civil partner, or to a qualifying charity, stay exempt. How this applies to you as an expat depends on your circumstances.
• Long-term residence test (from 6 April 2025). UK inheritance tax on worldwide assets now depends on whether you have been UK resident for 10 of the previous 20 tax years, and can continue for several years after you leave.

Tax in the Country Where You Live

UK tax is only half of the picture. Your country of residence decides how your pension income and any lump sums are taxed there, and the answer differs widely. Some countries tax foreign pension income in full, some in part, and some not at all. A double tax treaty between the UK and your country may also change which country can tax what.

The same pension decision can leave one person better off and another worse off, depending on whether they live in Hong Kong, Malaysia, Singapore, Thailand, the UAE, Europe, Australia or elsewhere.

Country guides: · · · · [UAE]

Six Questions to Ask About Tax in Your Country

Whatever country you live in, ask these before you act:

1. Does it tax residents on worldwide income, or only on some income?
2. Does it tax a pension when it is paid, when it is received, or when it is brought into the country?
3. Is there a double tax treaty with the UK, and what does it say about pensions?
4. Are lump sums treated differently from regular income?
5. Does it have its own reporting rules for foreign pensions?
6. How would a transfer to an overseas scheme be treated?

Good local tax advice is as important as UK pension advice.

What a Good Pension Review Should Include

Whoever you ask, a proper review of your UK pensions should cover:

• every pension you hold, what each is worth, and what each guarantees
• your plans: where you live now, where you may live later, and when you want to retire
• all the options, including leaving everything where it is
• every cost, in writing, and who is paid what
• the tax position in the UK and in your country of residence
• the risks, and what you give up if you move your pension
• how the arrangement will be reviewed as your plans change

If a review doesn’t cover these, ask why. Read how an expat pension review works.

Passing Your Pension On

Most pensions let you nominate who receives what is left when you die. These nominations are often out of date, especially after a move abroad, a marriage or a divorce. A scheme may follow your wishes or use its own discretion, and the rules differ between schemes.

• check who is named on every pension you hold
• ask each provider how its nominations work, and whether they bind the scheme
• keep your family informed about where your pensions are
• remember that inheritance tax changes from 6 April 2027 may affect what your beneficiaries receive

How Often to Review Your Pensions

Review your pensions whenever your life changes: a move to a new country, a new job, a marriage or divorce, a change in health, or a change in the rules. Even without a trigger, a check every two or three years is sensible. Charges, investments and tax rules all change over time, and a decision that was right at 40 may not be right at 55. Your cover deserves the same check: see our guides to expat life insurance and expat insurance more broadly. If you are weighing UK property against a pension, see our guide to expat financing.

Pension Scams to Avoid

• unexpected contact about your pension, including cold calls, emails, texts or social media approaches
• a free pension review (professional advice isn’t free)
• guaranteed returns, or promises of better returns
• pressure to act quickly
• unusual investments you can’t easily verify, often overseas
• offers to release cash before the minimum pension age

Check any adviser or firm on the FCA Financial Services Register, never take advice from the firm that contacted you first, and report suspected scams to the FCA on 0800 111 6768.

Common Mistakes With UK Pensions Abroad

• Doing nothing. Pensions left unreviewed for years can end up in the wrong place, with the wrong investments or lost contact details.
• Moving a final salary pension without advice. The guaranteed income is hard to replace.
• Assuming one country’s tax applies. Both the UK and your country of residence may have a say.
• Acting on a cold call. Genuine providers do not usually contact you unprompted about your pension.
• Choosing a structure before the plan. Decide what you want first, then pick the option that fits.
• Forgetting the State Pension. It can be claimed abroad if you have paid enough National Insurance.
• Not telling schemes you have moved. Update every provider.

Frequently Asked Questions

1. Can I keep my UK pension if I move abroad?
Yes. What you have built up in your UK pension scheme stays yours, and most can be paid to you abroad when you reach pension age.

2. Can I get my UK State Pension abroad?
Yes, if you have paid enough National Insurance contributions. You can have it paid into an overseas or UK bank account. You choose one country for payment.

3. What is the difference between a SIPP and a QROPS?
A SIPP is a UK pension, so UK pension rules apply and there is no overseas transfer charge. A QROPS is an overseas scheme that meets HMRC’s requirements, and a 25% charge can apply to a transfer into it.

4. Is the 25% overseas transfer charge always payable?
No. It does not apply if an exclusion is met, such as living in the same country as the QROPS. See the QROPS guide for the full list.

5. Should I transfer my final salary pension?
It needs careful thought, because you would give up a guaranteed income. Regulated advice is required before transferring safeguarded benefits worth £30,000 or more.

6. What is the minimum age to access my pension?
The normal minimum pension age is 55. It rises to 57 on 6 April 2028. Some people have a protected earlier age.

7. Will my UK pension be taxed in the country where I live?
It may be. It depends on that country’s rules and on any double tax treaty with the UK. Check before you take money out.

8. Will inheritance tax apply to my pension?
From 6 April 2027, most unused pension funds and death benefits will count towards the value of an estate for deaths on or after that date. How it applies to you depends on your circumstances, so take advice.

9. What happens to my pension if I return to the UK?
If you left it in the UK, nothing changes. If you moved it overseas, check the rules before you return, because the position can be more complicated.

10. Can I take my whole pension as cash?
Usually only from the minimum pension age, and the tax can be heavy. Up to 25% may be tax-free within allowances, and the rest is taxed as income. Be wary of anyone offering cash early.

11. How do I check that an adviser is regulated?
Check the firm and the individual on the FCA Financial Services Register. Be wary of anyone who contacted you without being asked.

12. Do I need advice about my British pension as an expat?
It is strongly recommended, particularly before transferring anything. The right answer depends on your pensions, your plans and where you live.

Glossary

• Defined contribution (DC): A pot built from contributions and investment returns.
• Defined benefit (DB): A final salary pension with a guaranteed income.
• SIPP: A UK personal pension where you choose the investments.
• QROPS: An overseas pension scheme that meets HMRC’s requirements.
• Overseas transfer charge: A 25% charge that can apply to a transfer to a QROPS.
• Normal minimum pension age: 55 now, 57 from 6 April 2028.
• Double tax treaty: An agreement between two countries about taxing certain income.

Thinking About Your UK Pension?

Speak to us before you change anything. We’ll look at your pensions, where you live and where you may move, and talk through the options. Book a call

Risk warning: The value of investments can fall as well as rise. Tax rules can change and depend on your circumstances.