If retiring abroad has always been your dream, it’s important to make sure you’ll have full access to your pension when the time comes.
You may face challenges such as currency fluctuations, complex pension transfer rules, loss of certain tax benefits, and the risk of your State Pension not increasing in line with the ‘triple lock’.
Ambient Wealth can help you navigate these obstacles and ensure your retirement income is secure, tax-efficient, and aligned with your long-term goals, wherever you choose to retire.
Read on to learn more about how to access your pension overseas.
You can claim your State Pension in another country
You can claim the UK State Pension abroad provided you’ve paid enough National Insurance contributions (NICs) to qualify.
You usually need 10 qualifying years of NICs to be eligible for the minimum State Pension, and 35 years to receive the full amount.
You can receive your State Pension into either a UK or foreign bank account, but only in one country. So, if you live part of the year abroad, you must choose which country you want your pension to be paid in.
If you’ve made NICs in a foreign country, you could still be eligible for the UK State Pension if you made them in:
- The European Economic Area (EEA)
- Switzerland
- Any country that has a social security agreement with the UK.
If you access your State Pension outside of the above countries (or the UK), you usually won’t get annual increases based on the triple lock unless you return to live in the UK.
If you want to claim your State Pension in a foreign country, contact the International Pension Centre.
You may be eligible to claim a State Pension from another country
If you lived or worked abroad during your career, you may be able to claim an overseas State Pension. Your eligibility will depend on the local laws and your specific circumstances.
Contact the pension authority in the country you live in if you think you may be eligible.
You can also access your personal and workplace pension wherever you live
You can access your personal or workplace pension abroad, but it’s a good idea to talk to your pension scheme or provider before you move.
While you will still be able to access your pension wherever you are, some providers might only be able to pay into a UK bank account. Others may be able to pay into an overseas bank account, though there might be extra charges.
As your pension income will be paid in pounds sterling, it will be affected by fluctuations in exchange rates when you convert it to your local currency. So, it’s important to be prepared for your income to rise and fall because of this.
You can transfer your pension abroad, but you may face a charge
It might be possible to transfer your UK pensions to a pension arrangement overseas if the provider is a qualifying recognised overseas pension scheme (QROPS).
However, your transfer may face a 25% Overseas Transfer Charge (OTC), depending on where you transfer it. You could also face a 25% charge if you transfer more than the Overseas Transfer Allowance, which is currently £1,073,100.
In the 2024 Autumn Budget, the exemption from the OTC for transfers to QROPS in EEA countries was removed. This means that transfers to QROPS in EEA countries are now subject to the 25% OTC unless you have residency in the country where the QROPS is based at the time of the transfer.
So, if you’re considering moving your pension abroad, it’s a good idea to get financial advice from an international specialist before deciding.
A non-resident self-invested personal pension (SIPP) could be helpful if you live abroad
A non-resident self-invested personal pension (SIPP) is a UK-based SIPP pension held by someone who is no longer a resident in the UK for tax purposes.
While SIPPs are typically used by UK residents, non-residents can still contribute to, manage, or draw from a SIPP, depending on specific rules.
You can have a non-resident SIPP if you are a:
- UK national who has moved abroad
- Foreign national who previously worked in the UK and contributed to a personal or workplace pension scheme.
If you have a non-resident SIPP, you may be eligible for UK and/or overseas tax advantages such as the 25% tax-free lump sum, withdrawals paid gross without UK/overseas tax at source, and relief on your contributions paid at your marginal rate, provided you are a relevant UK individual.
In any tax year, you are considered a relevant UK individual if you:
- Have relevant UK earnings chargeable to income tax for that year
- Are a resident in the UK at some time during that year
- Were a resident in the UK both at some time during the five tax years immediately before that year and when you became a member of the pension scheme
- Or your spouse have general earnings for the tax year from overseas Crown employment subject to UK tax.
If you have relevant UK earnings (income generated in the UK), you can usually contribute up to the Annual Allowance each tax year – in 2025/26, this is £60,000 or 100% of your earnings, whichever is lower. However, if you don’t have relevant UK earnings, you can usually only contribute up to £3,600 a year, regardless of your income.
How your pensions are taxed depends on where you are a tax resident
If you live abroad, you may be classed as a non-UK resident depending on how long you’ve lived there. You can read more about this in our previous article on the topic.
However, you may still have to pay UK tax on your State Pension and personal or workplace pension income, particularly UK civil service schemes.
You may also have to pay tax on your pension in the country you live in. If the country you are in has a double taxation agreement with the UK, you may be able to apply for tax relief or a refund.
Get in touch
Ensuring your pension income remains efficient when accessed abroad can be complex, and that’s where we can help.
We can guide you through the challenges of international pension planning, manage tax implications, avoid costly transfer mistakes, and help you make the most of your retirement income.
To find out more, get in touch.
Email contact@ambient-wm.com or call us on +34 658 077 450.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.