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Moving abroad

You're now allowed to be a member of a UK registered pension scheme regardless of where you live or where your employer is based. 

If you move abroad you have several options with your pension to consider:

Option 1 – leave your pensions in the UK pension plan.

Your pension will continue to be held by your pension provider until you claim it. You can request early payment of these pensions from age 55 at which point you may be able to take up to 25% of the value as a lump sum and use the remained to provide a pension for your lifetime.

Anybody who has a defined contribution pension scheme will be permitted to access their pension pots as cash from the age of 55.

If you are not able, or do not draw your pension, at age 55 you can claim your pension from your normal pension date. If you decide on this option it would be worth asking for regular updates of your pension if this is not automatically provided.

Option 2 – transfer your UK pensions to an approved arrangement in your new country of residence.

It may be possible to transfer your UK pensions to a pension arrangement overseas if the pension plan is a Qualifying Recognised Overseas Pension Scheme (QROPS). In order to qualify as a QROPS and in order to transfer to a QROPS certain conditions must be met. 

Option 3 - Paying into a UK pension scheme from abroad

Living abroad, or working for an employer who is based overseas, no longer limits the amount either of you can pay into a UK pension scheme. The downside is that tax relief may be limited - or not available at all.

Do you qualify for tax relief?

To get tax relief on your contributions, you must have been a relevant UK individual for the tax year in question.

This means:

  • you had relevant UK earnings chargeable to UK income tax during that tax year or
  • you were tax resident in the UK at some time during that tax year or
  • you were tax resident in the UK at some time during the previous five tax years before the tax year in question and were also resident in the UK when you joined the pension scheme or
  • have for that tax year general earnings from overseas Crown employment subject to UK tax (as defined by section 28 of the Income Tax (Earnings and Pensions) Act 2003) or
  • are the spouse or civil partner of an individual who has for that tax year general earnings from overseas Crown employment subject to UK tax (as defined by section 28 of the Income Tax (Earnings and Pensions) Act 2003).


Tax relief limits

Tax relief on your contributions is limited to whichever is the greater of:

  • your relevant UK earnings chargeable to UK income tax for that tax year; or
  • the basic amount of £3,600 where relief at source is provided.

The total amount of tax relief you can benefit from is also limited by the Annual Allowance. You can find out more by clicking here


Enjoying UK pension benefits abroad

Unfortunately pension scheme and annuity providers do not typically pay your pension benefits into an overseas account. So if you need to transfer the money from a UK bank account you will need to think about the impact of any transfer fees and exchange rate variations on the money you receive. When and how any benefits are exchange, may make a big difference to how much you will get.


Building up a UK State Pension from abroad

You may be able to build up a UK State Pension if you pay into the social security system of:

  • a country in the European Economic Area;
  • Switzerland;
  • a country that has a social security agreement with the UK.

Click here for more information about these countries.

You may also be able to claim a State Pension from the country you are living in, if you are paying into its state pension scheme. 


Receiving a UK State Pension abroad

You are allowed to live in another country and receive the UK State Pension. However you will only receive pension increases each year if you live in:

  • the UK for 6 months or more each year;
  • the European Economic Area (EEA);
  • Switzerland;
  • A country that has a social security agreement with the UK that allows for increases.

If you live outside these areas, you won't get yearly increases.  However, if you return to live permanently in the UK, your State Pension will be increased each year.

If you move overseas after you have started to receive your State Pension you should inform the pension service when you are going to leave.

To find out more about State Pensions and benefits if you live or have lived overseas, and to claim your benefits, go to www.gov.uk/international-pension-centre.


Frequently asked...

Will living overseas affect my UK state pension?

You are entitled to live in another country and receive your UK State Pension. However there will only be any pension increases each year if the country you live in meets the eligibility criteria mentioned above. It may be possible for you to pay voluntary class 3 NI contributions whilst you are living abroad. Call HMRC Residency on 0191 203 7010 for further information.

Will I receive the Winter Fuel Payment if I am living overseas?

If you qualify for the Winter Fuel Payment this can be paid if you reside in another EEA country, or Switzerland, and you have a genuine link with the UK.

Where can I find out more?

If you need more information, please contact us. A pension specialist from our team will be happy to help with whatever pensions-related question you have. Our help is always free.

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