How to move your UK pension overseas

If you move abroad, one option is to leave your UK pension where it is and let your current provider continue managing it.

When you’re ready to take your pension, it’s usually paid in pounds and taxed as UK income. If you need it in a different currency, you could transfer the money into a foreign exchange account – many large banks offer these.

The main risk is not knowing how much pension income you’re going to get because:

• you might need to pay exchange fees
• exchange rates often change daily.

Transferring your UK pension to an overseas scheme usually means:

• your pension will be regulated in the country the scheme is based in
• your pension income will be paid in your local currency
• you won’t be able to take any money before age 55 (unless you need to retire early due to poor health)
• you’ll be taxed by the overseas country you live in, so you’ll need to research their rules.

You might also need to pay UK Income Tax on your pension income if you take it within:

• five years of transferring your pension overseas and
• ten years of living permanently outside the UK.

This is because overseas pension schemes must report to HMRC for ten years after the transfer. If you break any rules, like taking your pension before age 55, you might have to pay UK tax up to 55% and other penalties.

If you want to transfer your pension to a different country, make sure the overseas scheme is recognised by HMRC.

You can see a list of recognised overseas pensions schemesOpens in a new window on GOV.UK.

A qualifying recognised overseas pension scheme (QROPS) means it meets certain criteria, like accepting transfers from registered UK pension schemes and following similar rules to UK schemes.

If you transfer to an overseas pension that is not a qualifying recognised overseas pension scheme (QROPS):

• it’s usually treated as an unauthorised payment from your pension
• you might have to pay an unauthorised tax charge up to 55%, plus other penalties.

There’s also a risk you might lose money as:

• the pension scheme might invest in high-risk investments
• the transfer is unlikely to be regulated with no compensation if things go wrong
• there’s a greater chance that the new scheme is a scam.

For more information, see our guide How to spot a pension scam.

Before considering a transfer to an overseas scheme, make sure you understand:

• how the new scheme works
• the features it offers
• how your money will be invested
• if you can choose your own investments
• the fees you’ll need to pay, including:
  • set up and transfer charges
  • annual management fees
  • investment charges
  • fees to change your investments.

You can usually find this information on the new scheme’s website or by asking them.

Always compare the new scheme to your current UK pension and identify how they might be different. If the new scheme does not offer a benefit that your existing provider does, you will lose this if you transfer away.

For example, some providers offer guaranteed annuity rates that might be better than you can get elsewhere. This means you could convert your pension into a higher guaranteed income with that provider.

You usually will not pay any tax to transfer to a qualifying recognised overseas pension scheme (QROPS) if:

• you live in the same country that the QROPS is based in during the first five years, or
• your employer is providing the QROPS and they’re sponsoring your move.

The total amount you’re transferring must also be within the overseas transfer allowance (OTA). The OTA counts all overseas pension transfers you make and is currently £1,073,100 for most. You’ll pay 25% tax on anything over the OTA.

Your OTA might be higher if you applied for protection before 6 April 2025. You can check if you have lifetime allowance protectionOpens in a new window on GOV.UK.

In all other scenarios, you’ll usually pay 25% tax on the full transfer amount. This is called the overseas transfer charge and is normally paid by the overseas scheme automatically.

Even if you qualify for a tax-free overseas pension transfer when it’s first made, you might still have to pay a 25% tax charge if your circumstances change within five years of the transfer.

This includes:

• moving to a different country than your overseas pension is based in
• transferring your pension to another QROPS based outside the country you live in.

You can tell HMRC about a change to your personal detailsOpens in a new window on GOV.UK.

If you have to pay the overseas transfer charge when the transfer is first made but move to the country your QROPS is based in within five years, you can ask your pension scheme for a refund.

You can also ask for a refund if the overseas scheme has charged you incorrectly.

This often happens if the scheme does not receive the correct information within 60 days of you asking for the transfer, as they must charge the 25% tax at this point. You can see the information needed for an overseas pension transferOpens in a new window on GOV.UK.

As there’s a risk you could be worse off transferring your pension overseas, it’s a good idea to pay for financial advice in the UK and in the country you want to move your pension to.

A regulated financial adviser can:

• tell you if you’d be better off transferring your pension overseas
• recommend certain products
• explain how you might be taxed
• check if the new scheme is likely to be a scam.

Getting advice is usually a requirement if you want to transfer a pension that currently guarantees you a retirement income. This includes all defined benefit pensions (often called final salary or career average schemes) and some defined contribution pensions.

Our tool can help you find a retirement adviser based in the UK that offers advice to expatriates. You must be told how much the advice will cost before you commit.

You’ll need to do your own research to find an adviser overseas. When searching make sure to check the adviser’s:

• fees, including if they charge commission
• qualifications
• experience
• regulatory status.

If you pay for regulated financial advice in the UK and it turns out to be poor, or you lose money as a result, you can complain and ask for compensation. For more information, see our guide How to claim compensation for a pension problem or poor advice.

For poor advice outside the UK, you’ll need to complain using the rules of that country.

If you’re sure you’d like to transfer your pension overseas, ask your current pension provider:

• what information they need for the transfer
• if there are any fees to pay
• how long the transfer might take – it can often be several months.

Your pension provider will usually send you forms which you’ll need to complete within 60 days. A financial adviser might be able to help you fill in this information.

If your pension provider is slow to act, you can complain. For step-by-step help, see our guide How to complain about delays to your pension.

Do not transfer your money to a new pension provider or invest any money because of a cold call, visit, email or text. 

If you’re not sure about anything, stop. For more information, see our guide How to spot a pension scam.