How to transfer your overseas pension to the UK

Before considering moving your foreign pension to the UK, check if:

• your existing pension provider allows international pension transfers
• the UK scheme you want to transfer into accepts transfers from overseas.

For example, you often cannot transfer an Australian pension to the UK before reaching your ‘preservation age’. This is age 60 for anyone born on or after 1 July 1964.

If your overseas pension is already paying out, it might be hard to find a UK pension scheme that will accept the transfer and continue making payments.

Your pension provider will be able to explain the rules that apply to you.

Even if you’re able to transfer your pension to the UK, one option is to leave your overseas pension where it is and let your current provider continue managing it.

When you’re ready to take your pension, your income is usually paid in the currency of the country your pension is based in.

If you need to change your income into pounds, you could transfer it 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.

Pension schemes often work differently to each other, so always 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. For more information, see our Pensions explained guides.

Always compare the new scheme to your current overseas pension and identify how they might be different. If the new scheme does not offer a benefit that your existing provider does, you’ll 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 won’t pay any UK tax to transfer your overseas pension into a UK scheme. But the country you’re transferring from might charge you.

For example, you’ll often pay a tax charge on overseas pension transfers from the USA.

You’ll need to research the tax rules for the country you’re transferring from.

After your pension has been transferred to the UK, the money is tax-free while it’s in your pension.

From age 55 (57 from April 2028), you can usually take up to 25% of your pension as a tax-free lump sum, as long as the total amount from all your schemes isn’t more than the lump sum allowance (LSA). The LSA is £268,275 for most.

If you have a defined benefit pension, the rest will be taxable income.

If you have a defined contribution pension, you usually have different options. For example, you can normally:

• use pension drawdown, where you leave the rest invested and take taxable income as and when you need it
• get a taxable guaranteed income by buying an annuity.

Alternatively, you could take one or more taxable lump sums, with up to 25% of each amount paid tax-free.

For more information, see our guide about your pension options, including how each payment might be taxed.

If you’re aged 50 or over with a defined contribution pension, you can also have a free Pension Wise appointment to understand the different ways you’re able to take your money.

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

A regulated financial adviser can:

• tell you if you’d be better off transferring your pension to the UK
• 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, including if you lose money as a result, you can complain and ask for compensation.

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 overseas pension into the UK, 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 typically send you forms to complete. A financial adviser might be able to help you fill in this information.

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.