Moving abroad is an attractive prospect for many, whether it concerns the hustle and bustle of Paris, the blissful calm of Cyprus or the beautiful beaches on the Gold Coast. It is a chance to embrace a new daily rhythm, indulge in a different culture and cuisine and escape the often-dreary British weather. Nevertheless, moving abroad isn’t necessarily a case of finding a place to live and hopping on a flight, rather it can often have complex tax implications and can impact your state and private pensions. Due to this, the realm of expat wealth management is a rapidly emerging industry, with financial advisers giving supportive and capable advice to facilitate your international adventure.

What happens to my private pensions?

Your pensions will be okay. You can still have any of your private pensions paid to you wherever you live. The only main complication to keep in mind here is the question of currency exchanges. Some pension providers won’t be able to pay into an overseas bank account, while others that will, can only pay out in pounds sterling. This means that your pension income may be subject to exchange rate fluctuations, that may or may not work in your favour and could devalue your pot if the rates go against you.

If you move abroad before retirement, then you need to assess your options. You can stop paying into your pension and leave it as it is until you reach 55 (57 from 2028), from when you can withdraw from your pot. If you do this your pension will continue to grow independently based on your investments. Otherwise, you can keep paying into your pension. However, there may be restrictions on the tax relief you can get on your contributions. How you wish to proceed will be dependent on the country-specific tax implications, and should be discussed with your adviser.

What are the tax implications?

There are two question that need to be addressed regarding this topic. Firstly there is the question of double taxation. If you move abroad, you will most likely be classed as a non-UK resident for tax purposes. As such, if your pension remains a UK pension, you will be liable for UK income tax. Depending on which country you move to, you may have to pay tax to that country as well. Whether or not this is the case is contingent on whether or not that country has a double taxation agreement with the UK, an important consideration to take into account when moving abroad. These agreements set out the country you will need to pay tax in, the country in which you can apply for tax relief and how much you can get thereof. A guide to which countries the UK has double taxation agreements with can be found here.

A second question is that of tax relief on any pension contributions. How much tax relief you can get on your pension income is dependent on a number of factors, namely either your relevant UK earnings for that tax year or the basic amount of £3,600, whichever is higher. This can then be further restricted by the Annual Allowance, i.e. how much you can save in your pension per year prior to having to pay tax on it. Additionally to this, you will need to fit a certain set of criteria. To get tax relief, you need to either be currently a UK resident, or have been a UK resident in the previous five years and at the time you joined the pension scheme. It is important you get advice from an adviser specialised in expat wealth management to guide you through these obstacles.

Can I move my UK pension overseas?

One options that many expats will consider is moving their pension to a provider in their new country of residence. In order to do this, you will need to transfer your pension to a Qualifying Recognised Overseas Pension Scheme (QROPS) that works in accordance with HMRC regulations. In terms of tax it’s important to be aware that you may have to pay a 25% on the transfer, unless you meet one of the following conditions:

  • You are transferring to a QROPS in your country of residence.
  • You’re a European Economic Area (EEA) resident and you’re transferring to another country in the EEA or Gibraltar.
  • The QROPS is provided by your employer.

Once you complete the transfer you will still be bound by HMRC rules for 10 years, after which you will be free of UK tax and pension regulations. QROPS can be an attractive prospect for many of those who are moving abroad, whether indefinitely or for retirement. Nevertheless, they have their requirements that need to be met and which should be discussed with your tax adviser.

What about my state pension?

Another consideration is that of the state pension, which has different rules and conditions compared to private and workplace pensions. You will be able to claim your State Pension when living abroad, as long as you’ve fulfilled the National Insurance requirements. Nevertheless, you may not profit from any State Pension increases. If you move abroad, your pension may stay the same as it was at the point at which you left, while those staying in the UK will see theirs increase. Whether this happens is based on your target country. If you move to an EEA country or any other country that has made a state-pension related agreement with the UK, then you will continue to see the increases. The list of applicable countries is available here. Your State Pension can be paid into either a UK bank account or one in your country of residence. It is important to note, however, should you choose to make us of a foreign bank account, that the payment will be subject to fluctuating exchange rates.


Thus, moving abroad can be a tricky procedure from a financial perspective. There are a number of pension and tax implications to take into account, which can differ based on the country you plan to move to. Nevertheless, it is all possible. Many advisers, for instance those at First Sentinel Wealth Ltd specialise in expat wealth management and will be able to help facilitate your dream expatriation and overseas retirement.


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