What happens to my pension if I retire abroad?

If you move overseas, you usually have two options for your UK pension – leave it where it is or take it with you.

You must tell your provider you’re moving overseas, but your pension will continue to be managed in the UK.

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.

If you plan to continue paying into a UK pension after you move abroad, you might also not qualify for any tax relief on your contributions.

For more information, see Can I save into a UK pension if I live overseas?       

You could consider moving your pension to an overseas scheme to get your pension income:

• paid in your local currency
• taxed in the country you’re moving to.

This can be complicated, so it’s usually a good idea to pay for financial advice in the UK and in the country you’re moving your pension to.

For more information, see our guide How to move your UK pension overseas.

Scammers might target you if you want to access or transfer your pension overseas. For example, you might see adverts or receive calls, emails and texts about:

• free pension advice or reviews
• pension or investment products promising high returns.

You might also be told there’s a deadline to transfer your pension to an overseas scheme, so you feel pressured to act quickly.

If you feel unsure about anything, do not access or transfer your pension. You might lose all your retirement savings and have to pay an expensive tax charge.

Instead:

• check the adviser or firm appears on the Financial Conduct Authority’s registerOpens in a new window 
• consider paying for financial advice

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

You can claim the UK State Pension if you move overseas, but you will not qualify for:

• annual increases – unless the country you’re moving to is listed on GOV.UKOpens in a new window
• Pension Credit.

If your State Pension is paid into an international account, you’ll receive it in your local currency. This means the amount you’ll get depends on the exchange rate at the time.

You can check your State Pension forecastOpens in a new window on GOV.UK to see:

• when you can claim your State Pension
• how much you’re on track to get, as the amount depends on your National Insurance record.

If your forecast shows you’re not likely to qualify for the full amount, you could consider increasing your State Pension by:

• paying voluntary National Insurance contributions
• delaying your claim.

If you work abroad and pay into another country’s state pension system, those contributions might also count when calculating how much UK State Pension you’ll get.

For more information, see The new State Pension: If you've lived or worked abroadOpens in a new window on GOV.UK.

You can claim your State Pension if you’re within four months of reaching your State Pension ageOpens in a new window or any time after.

If you’re claiming from overseas, you can:

• contact the International Pension CentreOpens in a new window
• post the International State Pension claim formOpens in a new window
  

If you’re already receiving your State Pension and planning on moving abroad, contact the:

• International Pension CentreOpens in a new window if you live in England, Scotland or Wales
• Northern Ireland Pension CentreOpens in a new window if you live in Northern Ireland.

To make sure you pay the correct amount of tax, you must tell HMRC if you move abroadOpens in a new window

If you live overseas, you’re usually classed as a non-UK resident. This normally means you:

• do not pay UK Income Tax on your UK State Pension – but you might pay tax in the country you live in
• might pay UK Income Tax on other UK pensions – and sometimes in the country you live in too.

The amount of UK Income Tax you need to pay depends on your total earnings in a tax year (6 April to 5 April).

You can see the Income Tax bandsOpens in a new window and Scottish Income Tax bandsOpens in a new window on GOV.UK. 

Some countries have a double taxation agreement with the UKOpens in a new window

This means you can claim:

• a refund if you’ve paid both UK Income Tax and tax in the country you live in, or
• tax relief before you’ve been taxed twice.

You can usually take up to 25% of your pension tax-free in the UK, but this might still be taxed in the country you live in if you take it as a non-UK resident.

It’s worth considering paying for financial advice to find out which overseas tax rules apply to you.

If your provider agrees, you can continue saving into a UK pension scheme if you live abroad. But you might not benefit from tax relief on your contributions.

Tax relief is a top-up payment the government usually adds when you pay into your pension. This is the money you’d normally have paid in Income Tax.

Each tax year until you're 75, you can usually get tax relief on all your pension contributions up to:

• the amount you earn in the UK and
• your annual allowance – this is £60,000 for most and covers all payments into your pension, including any from your employer.

If you earn under £3,600 and your pension provider claims the tax relief for you (called relief at source), you can get tax relief on pension contributions you make up to £2,880 each tax year.

If you live outside the UK, you usually qualify for the same tax relief rules each tax year if any of these apply:

• You lived in the UK in the last five tax years and were already a member of a UK pension scheme.
• You or your partner are a Crown Servant with UK taxable earnings.
• You had ‘relevant UK earnings’ for that tax year – pension income does not count.

You can see what counts as ‘relevant UK earnings’Opens in a new window on GOV.UK.

If you move back to the UK, you must tell your pension provider(s) and the:

• International Pension CentreOpens in a new window if you’re moving to England, Scotland or Wales
• Northern Ireland Pension CentreOpens in a new window if you’re moving to Northern Ireland.

You might also need to tell HMRC so you pay the correct amount of tax.

See Tax if you return to the UKOpens in a new window on GOV.UK or contact HMRCOpens in a new window for more information.

If you have an overseas pension scheme and are considering transferring it to a UK scheme, see our guide How to transfer an overseas pension to the UK.

As tax rules between countries can be complicated, it’s a good idea to pay for financial advice in the UK and in the country you’re moving to.

Our guide can help you find a retirement adviser based in the UK that offers advice to expatriates (people living outside their home country). 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.