Are you asking yourself “what happens to my UK pension if I move abroad?”? If you’re considering moving overseas or are already living abroad as a British expat, one of the biggest questions you might have is what happens to your UK pension. While the UK State Pension often grabs the headlines, for many expats it’s workplace and private pensions that require careful planning—especially when it comes to access, tax treatment, and international transfers.

If you plan to retire abroad, or are thinking about retiring abroad in the future, it’s important to understand how these choices can affect your UK pension planning and the steps you need to take to secure your benefits.

In this guide, we’ll focus on what really matters for expats: how to manage your private and workplace pensions from overseas, what options you have to access or transfer them, and the key financial considerations to ensure your retirement plans stay on track.

Introduction to UK Pensions

UK pensions form the backbone of retirement planning for millions, offering a reliable income once you reach state pension age. There are two main types of pension schemes to consider: defined contribution pensions and defined benefit pensions. Defined contribution pensions allow you to build up a personal pension pot by making regular contributions, which are then invested to grow over time. When you retire or move abroad, you can access this pot in various ways, giving you flexibility over your retirement income.

Defined benefit pensions, sometimes called final salary schemes, work differently. They promise a guaranteed income for life, calculated based on your salary and years of service with your employer. This type of pension can provide peace of mind, especially if you value a predictable income stream in retirement.

Understanding the differences between these pension schemes is crucial, particularly if you’re considering moving abroad. Each type offers unique benefits and considerations, so knowing how your pension works will help you make informed decisions about your retirement income, whether you stay in the UK or start a new chapter overseas.

Understanding UK Private and Workplace Pensions Abroad

The UK pension system is made up of three main elements: the State Pension, workplace pensions, and personal pensions. While the State Pension may still be claimable from abroad, it’s not something financial advisers can assist with directly. Where we can truly add value is in advising on your workplace and private pensions, which typically offer greater flexibility and planning opportunities when relocating overseas. If you are living abroad, the process of claiming your private or workplace pension usually involves contacting your pension provider, providing proof of identity and overseas residency, and following their specific procedures for international payments.

If you’ve built up a defined contribution pension or a defined benefit scheme with a UK employer, or you’ve made personal pension contributions, understanding your rights and options as a non-UK resident is essential. To qualify for UK private and workplace pensions as a non-UK resident, you generally need to have made sufficient contributions and meet the scheme’s eligibility criteria, which may include specific rules about residency or employment history.

Can I Still Access My UK Pension Abroad?

Yes, you can access your private or workplace pension even if you’re living abroad. Once you reach retirement age (currently 55, increasing to 57 in 2028), you have several pension options as an expat, including:

• Taking a lump sum (25% is usually tax-free in the UK)
• Using pension drawdown for flexible income
• Purchasing an annuity
• Transferring your pension to an overseas scheme (such as a QROPS)

Through these pension options, expats can access their pension money, whether by withdrawing funds, arranging regular payments, or transferring to an overseas pension scheme.

The key is understanding how these options interact with the tax rules in your new country of residence and how to avoid double taxation or unexpected charges.

Transferring Your UK Pension Overseas

Many expats explore transferring their pension to a Qualifying Recognised Overseas Pension Scheme (QROPS). This can offer benefits such as:

• Local currency withdrawals
• Potential tax efficiency
• Consolidation of multiple UK pensions
• Greater investment flexibility

However, QROPS must be handled with care. Transfers to non-QROPS schemes may incur a 25% Overseas Transfer Charge, and even eligible transfers need to meet strict HMRC criteria. If you do not reside in the same country as the QROPS, or if you transfer to a non-QROPS, you may face a significant tax charge. Working with a regulated adviser who understands cross-border pensions is essential.

What About SIPPs?

Self-Invested Personal Pensions (SIPPs) remain a popular option for expats who want greater control over their investments while maintaining the security of a UK-based wrapper. When managing a SIPP from abroad, it is important to select a reputable UK pension provider to ensure compliance and avoid potential tax penalties. Many SIPPs allow for remote access, international withdrawals, and flexible drawdown options.

In many cases, expats choose to retain a SIPP rather than transfer to a QROPS, especially if they plan to return to the UK or want to avoid transfer fees and restrictions. SIPPs can typically be accessed from a UK account or an overseas bank account, though expats should be aware of possible fees and currency exchange considerations.

National Insurance Considerations for Expats

National Insurance contributions are a key factor in determining your eligibility for the UK state pension. If you’re living abroad or planning to move, it’s important to understand how your National Insurance record affects your state pension entitlement. In many cases, you can continue making National Insurance contributions while living abroad, which can help you build up or maintain your entitlement to the state pension.

The rules around National Insurance contributions for expats can be complex, and your personal circumstances—such as the country you move to and your work status—can affect your options. To ensure you’re making the most of your contributions and not missing out on valuable pension benefits, it’s wise to seek guidance from a financial adviser or contact the International Pension Centre. They can help you navigate the process, understand your obligations, and make informed decisions about your pension and contributions while living abroad.

Bank Account Requirements for Receiving Your UK Pension Abroad

When it comes to receiving your UK pension abroad, having the right bank account is essential. Depending on your pension provider, you may be able to receive your pension payments into a UK bank account, an overseas bank account, or sometimes even a building society account. Some UK pension providers require you to maintain a UK bank account, while others are able to pay your pension directly into an overseas bank account in your country of residence.

It’s important to check with your pension provider to understand their specific requirements and any fees that may apply for international payments. Additionally, keep in mind that exchange rates can affect the amount you receive if your pension is paid in a different currency. Reviewing your options and considering the impact of exchange rates and potential bank charges will help you make the most of your pension income while living abroad.

Payment Schedules and Claims: Getting Your Pension Abroad

Receiving your UK pension abroad involves understanding how and when your payments will arrive. Most pension providers offer flexible payment schedules, allowing you to choose whether you receive your pension every 4 weeks or every 13 weeks. If your pension amount is less than £5 per week, payments may be made annually instead.

It’s also important to be aware that payment timings can sometimes be affected by international banking processes or US federal holidays, which may cause occasional delays for those living abroad. To claim your state pension abroad, you’ll need to contact the International Pension Centre and provide key details such as your National Insurance number and your chosen bank account information. Staying informed about the claims process and payment schedules will help ensure your pension income arrives smoothly, wherever you are in the world.

Combining Pensions for Simplification

If you have several pension schemes from different jobs or providers, combining your pensions can make managing your retirement savings much simpler. Consolidating your pensions can reduce paperwork, make it easier to track your pension savings, and may even lower your overall fees. It can also give you a clearer picture of your total retirement income and help you plan more effectively.

However, before combining pensions, it’s important to consider how this might affect any guaranteed income, tax relief, or other valuable benefits attached to your existing schemes. Some pensions, especially defined benefit schemes, offer unique advantages that could be lost if transferred. Consulting a financial adviser can help you weigh the pros and cons based on your personal circumstances, ensuring you make the best decision for your long-term financial security and make the most of your pension savings.

Tax Implications of Drawing Your Pension Abroad

Where you pay tax on your pension income depends on your residency status for tax purposes, the relevant tax year, and whether an agreement with the UK—specifically a Double Taxation Agreement (DTA)—exists between the UK and your new country. Such agreements are important because they determine how your UK income, including pensions, is taxed and help prevent double taxation.

• With a DTA: You may only pay UK tax or tax in your country of residence, depending on the agreement. The DTA outlines whether you need to pay UK tax on your pension income or if you are exempt in the UK and taxed only in your new country.
• Without a DTA: You might be taxed in both the UK and abroad, meaning you could have to pay UK tax as well as tax in your country of residence.

Your residency status for tax purposes and the specific tax year are key factors in determining how your pension and other UK income are taxed. If you overpay tax due to double taxation or errors, you may be able to claim a refund from HMRC.

It’s crucial to get this right to avoid paying more tax than necessary. Pension income, lump sums, and investment growth can all be treated differently depending on your destination country.

Paying into a UK Pension from Overseas

Some expats continue contributing to their UK pension even after moving abroad, but this depends on the provider and your residency status. It’s important to know:

• Tax relief may be unavailable to non-UK residents
• If you live in the European Economic Area, different rules may apply regarding your eligibility for UK pension contributions and tax relief.
• Spending only part of the year abroad (a year abroad) can also affect your eligibility for contributions and tax relief, depending on your residency status.
• Annual allowance rules still apply
• Ongoing contributions can still offer long-term growth if managed effectively

Speak to your provider or adviser to explore whether further contributions are suitable or whether it’s time to focus on alternative savings structures in your new country.

Real-World Example: Can I Retire in Spain Using My UK Pension?

Absolutely. Many British retirees use their private and workplace pensions to fund retirement in Spain. However, a few things to consider:

• Currency: Will you be withdrawing in GBP or EUR?
• Tax: Spain taxes UK pension income, though a DTA helps prevent double taxation.
• Lifestyle costs: You may need £15,000–£25,000 per year depending on location and preferences. Managing your money and finances effectively is essential to cover lifestyle costs, ensure smooth pension withdrawals, and maintain healthy cash flow abroad.

A well-structured pension strategy can help you navigate currency risk, tax reporting, and cash flow needs effectively.

Best Countries to Retire With a UK Pension

When planning retirement abroad, expats often weigh up:

• Tax treatment of UK pension income
• Availability of QROPS or suitable local alternatives
• Cost of living
• Double taxation agreements
• Political and financial stability

If you plan to live overseas, it’s important to choose one country as your main residence for pension payments and tax purposes. This helps ensure you receive your UK pension correctly and comply with local regulations.

Popular destinations include Portugal, Spain, France, Thailand, and Dubai, each offering unique benefits for pensioners.

FAQs – What Happens to My UK Pension If I Move Abroad?

Can I transfer my UK pension abroad? Yes, through a QROPS or by continuing to draw from a UK-based SIPP. Always consult a regulated adviser first.

Will I be taxed twice on my pension income? Not usually, if a double taxation treaty is in place. You may still owe tax locally, so proper planning is key.

Can I leave my pension in the UK? Yes, and many expats do—especially with SIPPs or if they plan to return in the future.

Can I still contribute to my pension from abroad? In some cases, yes, but tax relief may be limited. Check with your provider and financial adviser.

Do I need a UK address to keep my pension? No, but your provider may require you to notify them of your overseas address and residency status.

Can my UK pension pay directly into an overseas account? Yes, many UK pension providers can pay directly into an overseas account. However, there may be fees for international transfers, and currency exchange rates can affect the amount you receive. Not all providers offer this service, and some countries may have restrictions or additional requirements. Check with your pension provider about eligibility, potential charges, and whether your chosen overseas account is acceptable.

How Harrison Brook Can Help

At Harrison Brook, we specialise in helping British expats navigate their pensions when living abroad. We offer:

• Advice on QROPS and SIPP suitability
• Tax-efficient withdrawal strategies
• Cross-border pension planning
• Help managing currency risk and international payments
• Guidance on understanding and complying with government regulations related to UK pensions abroad

Whether you’re planning your move or already living overseas, our FCA-regulated advisers provide clear, independent advice tailored to your goals.

Take Control of Your Retirement Today

Don’t let your pension plans drift just because you’re relocating. Speak with a Harrison Brook adviser to understand how your pension fits into your life abroad—and how to make the most of it.

📞 Get your free expat pension review today.