Expat SIPP: A Guide for UK Pensions Abroad

What Is an Expat SIPP?

A SIPP, or Self-Invested Personal Pension, is a UK personal pension that lets you or your adviser choose the investments, rather than limiting you to one provider’s fund range. An expat SIPP, sometimes called an international SIPP, is a SIPP from a provider that accepts clients living outside the UK. It usually comes with services that expats need, such as support from abroad and a wider choice of investments or currencies.

Is it different from a UK SIPP? In most cases it is still a UK pension, held under UK rules. What differs is the provider’s service and what you can invest in, so look at what you are actually buying, not the label.

This guide explains how an expat SIPP works, who it may suit, the costs and tax, and what to check before you transfer. It is part of our guide to UK pensions for expats. Last reviewed.

How an Expat SIPP Works

A SIPP is a pension wrapper. The pension is held by a SIPP provider that is authorised by the FCA, and the money inside it is invested in the assets you choose from the provider’s range. You can move existing UK pensions into it, and you can take benefits from the normal minimum pension age.

• You choose the investments. Typically funds, exchange-traded funds, shares and cash, depending on the provider.
• The provider holds and administers the pension. It keeps the records, processes transfers and pays benefits.
• UK pension rules apply. This includes the rules on tax relief, tax-free cash and the age at which you can take money.
• You can usually run it from abroad. Check how the provider deals with overseas clients before you commit.

Who an Expat SIPP May Suit, and Who It May Not

It may suit you if:

• you hold several UK pensions and want them in one place
• you want more control over how your pension is invested
• you want to stay under UK pension rules and avoid the 25% overseas transfer charge that can apply to a QROPS
• you move between countries, so a transfer that depends on where you live is a risk
• you plan to retire abroad and want to hold investments in a currency that matches your spending
• you are comfortable making investment decisions, or you have advice to help

It may not suit you if:

• you have a final salary pension with a guaranteed income you would be giving up
• your pension is small, so charges could outweigh any benefit
• you want a guaranteed income and do not want investment risk
• you do not want to manage investments or pay for advice
• you are likely to return to the UK soon and your current arrangement already works

Who Uses an Expat SIPP in Practice

The expats who use these pensions are not all in the same position. These are the most common situations.

• UK expats with pensions left behind. You worked in the UK, moved abroad, and still have one or more pensions with former employers. A SIPP can bring them together, but only after you check what each one guarantees.
• Non-UK residents with UK pension savings. Some people who have never lived in the UK have UK pensions, for example from a past posting. Providers differ on whether they accept them.
• People who move often. If you may live in three countries in ten years, a pension that stays under UK rules is easier to plan around than one whose tax treatment depends on where you live on the day you transfer.
• Self-employed and contract expats. With no employer scheme, the SIPP may be the main vehicle for retirement saving. The limits on tax relief while abroad matter most here.
• Those planning to retire abroad. Your spending will be in another currency, so how the SIPP holds and pays money matters.
• Higher earners with larger pots. More money makes investment choice, costs and tax planning matter more.
• Those with several small pots. Combining them can cut paperwork. It can also lose benefits, so check each pot first.
• Couples with different residences. Where each partner lives can change the tax result, so look at it together.

None of these means a SIPP is the right answer. They are the situations in which it is worth looking at.

Benefits and Drawbacks

Potential benefits

• Wider investment choice than many standard UK pensions offer.
• One place for your pensions, which can make them easier to track and manage from abroad.
• Stays under UK rules, so the overseas transfer charge does not arise.
• Flexible access to your money from the minimum pension age, in the ways the rules allow.
• Can be moved to another UK provider later if your needs change.

Potential drawbacks

• Charges. Platform, dealing, investment and adviser fees can add up.
• Investment risk. The value can fall as well as rise, and the decisions are yours.
• Limited tax relief on new contributions once you have left the UK (see the tax section below).
• UK rules still apply, and the country where you live may tax what you take out.
• Currency risk, if your investments and your spending are in different currencies.
• Provider restrictions. Some providers do not accept clients in every country, so check yours.

Costs and Charges to Compare

Costs differ between providers and are rarely the same for every client. Ask for all of them in writing, and compare like with like.

An Illustration of How Charges Can Differ

The numbers below are invented to show the principle. They are not a quote and not typical of any provider.

A flat fee weighs more on a small pension, which is why small pots can be poor candidates for a SIPP. A percentage fee grows as the pension grows. If you also pay an adviser, add that as a third line. Ask every provider to give you your own figures, in writing.

Tax and an Expat SIPP

UK tax relief on contributions while abroad

You can only get UK tax relief on pension contributions if you count as a relevant UK individual. That can apply if you have UK-taxable earnings that tax year, if you were UK resident in one of the previous five tax years and joined the scheme while resident, or if you are a Crown servant. If you have no UK earnings, relief is capped at £3,600 gross a year, and under the five-year rule it stops once the five years end. Many providers only accept contributions that qualify for relief.

Tax on growth inside the SIPP

Investments held within a UK pension are generally free of UK income tax and capital gains tax while they stay inside the pension. Whether your country of residence treats it the same way is a separate question.

Tax on withdrawals

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 under UK rules. The country where you live may also tax it, and a double tax treaty between the UK and your country can change which of them has the right to tax your pension. Check before you withdraw, not after.

Tax Relief on Contributions: Three Questions

Most people who move abroad stop paying into a UK pension, but some want to carry on. Before you pay in, work through these questions in order.

1. Do you have UK-taxable earnings this tax year? If so, you can normally get relief on contributions up to your earnings, within the annual allowance.
2. If not, did you leave the UK within the last five tax years, having joined the scheme while UK resident? If so, relief is capped at £3,600 gross a year for those five years.
3. Are you a Crown servant, or the spouse or civil partner of one? Special rules can apply.

If the answer to all three is no, contributions will not get tax relief. Many providers will not accept them at all. If you are within the £3,600 cap, a payment of £2,880 can be topped up with basic-rate relief to £3,600 gross, where the scheme claims relief at source.

Even with relief, ask whether paying into a UK pension is the best use of the money while you live abroad. Tax relief is only one factor.

Transferring Into an Expat SIPP

1. List your pensions and find out what each is worth and what each guarantees.
2. Check what you would give up. Final salary and other guaranteed benefits are rarely replaced by a SIPP (see our guide to final salary pension transfers for expats). Regulated advice is required before transferring safeguarded benefits worth £30,000 or more.
3. Compare providers and costs. See the questions below.
4. Open the SIPP with the provider you have chosen.
5. Request the transfer. Your existing provider will usually carry out checks before releasing the money, and may ask you questions about why you are moving it. Our expat pension transfer guide covers the process in more detail.
6. Invest the money in line with your plan. Cash left uninvested earns little.

How long it takes varies by provider and scheme. Ask both providers for their expected timescales before you start.

What Your Existing Provider May Ask

Pension providers are expected to look for signs of pension scams before they release money, so do not be surprised by questions. You may be asked:

• who the receiving provider is, and how you found it
• whether anyone contacted you first about moving your pension
• whether you have taken advice, and from whom
• what you plan to invest in
• whether you understand what you may be giving up

Answer honestly. If a provider raises concerns, take them seriously, and ask for them in writing. Delays that come from careful checks are far better than losing your pension to a scam.

Investments and Currencies

An expat SIPP can usually hold mainstream investments such as funds, exchange-traded funds, shares and cash. Which ones are available, and in which currencies, depends on the provider. Holding investments in the currency you spend can reduce exchange-rate risk, but it does not remove investment risk.

Be careful with unusual or hard-to-value investments, especially overseas ones. They can be refused by the provider, can create tax charges inside a UK pension, and are a common feature of pension scams.

Taking Money From an Expat SIPP

You can usually start taking money from the normal minimum pension age. That is currently 55, rising to 57 on 6 April 2028. Some people have a protected earlier age. Offers to release cash before then are a classic sign of a scam.

• Lump sums. You can take cash, with up to 25% potentially tax-free within allowances and the rest taxed as income.
• Drawdown. You keep the pension invested and take an income, which means the money can run out if you take too much or investments fall.
• An annuity. You can use some or all of the pension to buy a guaranteed income.

What Happens to Your SIPP If You Move Country

A SIPP stays a UK pension wherever you live. If you move, nothing has to be transferred, but these things do change:

• Your tax position. The tax on what you take out depends on where you are resident when you take it.
• Tax relief on new contributions. Whether you qualify depends on your UK ties at the time.
• Your provider’s rules. Some providers cannot serve clients in certain countries. Tell yours when you move, and check it can continue to deal with you.
• Your records. Keep your address, tax residence and contact details up to date so payments and letters are not delayed.

If you are moving to a country where taxing foreign pensions is complicated, speak to someone who understands both countries before you move, not after.

Expat SIPP, QROPS or Leave It Where It Is?

For the full picture of how a transfer to an overseas scheme works, see QROPS for UK Expats, or return to our guide to UK pensions for expats.

Choosing a Provider: Questions to Ask

We don’t recommend named providers on this page, because the right one depends on your circumstances. These questions will help you compare any of them:

• Is the provider authorised by the FCA? Check it on the FCA Financial Services Register.
• Does it accept clients living in your country?
• What are all the costs, now and in future?
• What investments and currencies can you hold?
• How will you manage the pension and speak to the provider from abroad?
• What happens if you move country, or return to the UK?
• What are the terms for transferring out?
• What protection or compensation would apply if something goes wrong?

Choosing an Adviser

Moving a pension is a decision where advice earns its cost, but advisers differ widely. Our guide to expat pension advice explains how a review works. Before you engage one:

• Check the FCA register. Confirm that the firm and the individual are authorised, and that their permissions cover the advice you need, including pension transfers if relevant.
• Ask how they are paid. Is it a fixed fee, a percentage of your pension, or commission from products they recommend? Ask for the total cost in pounds, not just percentages.
• Ask whether they cover both countries. UK pension rules and tax in the country where you live both matter. Ask whether they advise on both or work with local specialists.
• Ask for everything in writing. A recommendation should explain why it suits you, what you give up, and what the alternatives were, including doing nothing.
• Ask about ongoing service. What will you receive after the transfer, how often, and what does it cost?
• Walk away from pressure. Be wary of anyone who contacted you without being asked, or who urges you to act quickly.

A good adviser should be comfortable telling you that leaving things as they are is the right answer, if it is.

Rule Changes to Know About

• Inheritance tax (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.
• Minimum pension age. Rising from 55 to 57 on 6 April 2028.
• US citizens and green card holders. A UK pension can bring extra US tax and reporting rules.

Pension Scams to Avoid

Be wary of unexpected contact about your pension, free pension reviews, guaranteed returns, pressure to act quickly, unusual overseas investments and offers to release cash early. Never take advice from the firm that contacted you first, and report suspected scams to the FCA on 0800 111 6768.

Common Mistakes to Avoid

• Transferring a guaranteed pension without advice. Final salary income is hard to replace, and advice is required above £30,000.
• Choosing on fees alone. The cheapest option may not offer the investments or service you need.
• Leaving the money in cash. Cash earns little, and inflation erodes it.
• Ignoring tax where you live. The UK is only half of the picture.
• Not checking the provider accepts your country. Find out before you apply.
• Buying unusual investments. They can create tax charges, be hard to sell, and often feature in scams.
• Assuming international means special protection. Check what is actually regulated and what compensation applies.
• Paying in without checking tax relief. Contributions that do not qualify for relief may not be worth making.
• Forgetting to update your address. Missed letters can delay payments.

Frequently Asked Questions

1. What is an expat SIPP?
A UK Self-Invested Personal Pension from a provider that accepts clients living outside the UK. You or your adviser choose the investments, and UK pension rules apply.

2. Can a non-UK resident have a SIPP?
Yes, if the provider accepts clients in your country. Some providers do not accept clients everywhere, so check before you apply.

3. Is an international SIPP different from a UK SIPP?
Usually it is a UK SIPP with services and investment choices aimed at overseas clients. Look at what the provider actually offers, not the name.

4. Can I still get UK tax relief on contributions while I live abroad?
Only if you count as a relevant UK individual, for example because you have UK-taxable earnings or are within five tax years of leaving the UK. Without UK earnings, relief is capped at £3,600 gross a year.

5. Does an expat SIPP avoid the 25% overseas transfer charge?
The charge applies to transfers to overseas schemes (QROPS). A SIPP is a UK pension, so a transfer to one does not trigger it.

6. What currencies can I hold?
It depends on the provider. Some allow several currencies and some only sterling, so ask before you choose.

7. When can I take money out?
From the normal minimum pension age, currently 55 and rising to 57 on 6 April 2028. Some people have a protected earlier age.

8. Will my SIPP 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.

9. What happens if I return to the UK?
The SIPP is already a UK pension, so nothing needs to be moved back. UK tax relief on new contributions may be available again once you are UK resident.

10. Can I transfer a final salary pension into a SIPP?
It is possible, but you would give up a guaranteed income for a pot you must invest yourself. Regulated advice is required before transferring safeguarded benefits worth £30,000 or more.

11. Will inheritance tax apply to my SIPP?
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.

12. Do I need advice before moving my pension to an expat SIPP?
It is strongly recommended, particularly if you hold guaranteed benefits. The right answer depends on your pensions, your plans and where you live.

13. Can I keep paying into a SIPP from abroad?
Sometimes. Many providers only accept contributions that qualify for UK tax relief, and relief is limited once you have left the UK. Check with your provider and see the three questions above.

14. How long does it take to transfer a pension into a SIPP?
It varies by provider and scheme. Ask both for estimates before you start. Extra checks for scam risk can add time, and it is better to wait than to rush.

15. What happens to my SIPP when I die?
Your nominated beneficiaries can usually inherit what is left. How it is taxed depends on your age at death and, from 6 April 2027, inheritance tax may also apply. Keep your nominations up to date. Expat life insurance can also help protect your family from a future tax bill.

Glossary

• SIPP: Self-Invested Personal Pension, a UK personal pension where you or your adviser choose the investments.
• QROPS: Qualifying Recognised Overseas Pension Scheme, an overseas scheme that meets HMRC’s requirements to receive UK pension transfers.
• Overseas transfer charge: A 25% charge that can apply to transfers to a QROPS unless an exclusion is met.
• Defined contribution (DC): A pension pot built from contributions and investment returns.
• Defined benefit (DB): A final salary pension that promises a guaranteed income.
• Drawdown: Taking income from a pension that stays invested.
• Annuity: A guaranteed income bought with some or all of a pension.
• Normal minimum pension age: The earliest age most people can take their pension. 55 now, 57 from 6 April 2028.
• Lump sum allowance: The limit on how much tax-free cash you can take.
• Relevant UK individual: Someone who qualifies for UK tax relief on pension contributions, for example through UK earnings or recent UK residence.
• Double tax treaty: An agreement between two countries about which can tax certain income.

Thinking About an Expat SIPP?

Speak to us before you move 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.