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How does moving abroad affect your UK pension?

3rd October 2023

pensions when moving

Moving abroad from the UK is one of the most exciting decisions you can make: discovering a new pace of life, indulging in new cultures, and enjoying a different climate.  However, you might find yourself wondering: ‘Can I still claim my UK pension after moving abroad?’ or ‘Can I transfer my pension back to the UK?’ The short answer is yes, you can! Whether you’re off to enjoy your golden years or just getting started, this blog investigates the most important questions you will be asking about how moving abroad can affect your pension. 


What happens to my State Pensions when I move abroad? 


As long as you have paid your National Insurance for at least 10 years, you can claim your UK State Pension, even when moving outside the UK.  To be eligible for a State Pension, some of your 10 qualifying years of UK National Insurance Contributions need to have been spent living or working in the following areas:

– UK


– Switzerland

– Gibraltar

If the State Pension increases back in the UK, you may not be able to see the benefits of this abroad. 

You can only collect interest or annual increases on your UK State Pension if you leave it in a European Economic Area Country,  Switzerland or Gibraltar.


How do I claim my State Pension from abroad?


Anyone looking to claim their State Pension must be within 4 months of the State Pension Age, and retiring abroad has the exact requirement.

The government can pay your State into a bank account in your country or a bank or building society in the UK. To do this, you need to contact the International Retirement Centre to move your state pension abroad or confirm you are happy for it to stay in the UK.

If you only spend part of the year abroad, you must decide what country you want your State Pension to be paid in; it is not possible to have your pension paid into bank accounts of two different countries. 

Certain things may catch you out when claiming your State Pension outside of the UK. We recommend being aware that:

– Pension credit stops when you move abroad. So, if you receive this, be prepared to lose it when leaving the UK. It also cannot be reclaimed once you move back to the UK. 

Currency exchange rates WILL affect your state pensions. UK State Pensions are paid in GBP, no matter where you are, so you need to be prepared for your Pension to change value.

If you retire before retirement age, you may need to make national insurance contributions to eventually receive a pension. If you do paid work abroad, you might have to legally make these payments.


 What about Personal or Workplace Pensions?


Your Personal or Workplace Pension shouldn’t be affected when you move abroad; your pension will still be paid in full. Unlike the state pension, you are entitled to all rises and increases, no matter where you reside.

Double check whether your pension provider is happy to pay into an abroad account; some workplaces will only pay into a UK bank.


Taking money from your UK Pension in a different country 


Similarly to UK State Pensions, you can either leave your UK pension in the UK or transfer it abroad. Pensions can be transferred with a Qualifying Recognised Overseas Pension Scheme (QROPS). The majority of these are taxable unless:

The individual claiming their pension and the pension savings are in the same country.

Both are within the European Economic Area (EEA).

The employer provides the QROPS. 


Falling outside of these requirements means you may also face transfer charges. 

Once you are ready to take an income from your pension, you must decide whether to be paid every 4 or 13 weeks. 

Your pension will be paid to you in local currency. This means that currency exchange rates WILL affect your pension, whether that causes an increase or decrease in your income. 


What happens to Tax on UK Pensions whilst living Abroad? 


Despite no longer being a UK resident, if your pension stays in the UK, the government may tax it as income. 

Check if the new country you are moving to has a double tax agreement with the UK; otherwise, your pension could get taxed in the UK and your new home country.

Research areas where pensions are on a 0% Tax plan or experience Tax Relief. America has a few states that practice this, including Florida. This means you can enjoy your pension to its full extent throughout your retirement. 


Moving before retirement age


If you move abroad before you reach retirement age, there are plenty of options you can choose from: 

– Stop all payments into your UK pension and take the money raised so far when you reach 55. 

– Continue paying into your pension, but be aware that the amount of tax relief on your contributions might be limited.

Opt for a Private Pension in your new country.

– Pay into a Workplace pension if you are going to carry on working.


If you continue paying into your UK pension, ask for regular updates so you can monitor it closely.

Once you want to take income from your pension, you have the same options as anyone who moves abroad with an open pension. 


Moving back to the UK after living abroad


If you return to the UK, you need to notify the International Pension Centre and HMRC to ensure you are paying the right amount of tax. 

You also need to notify your workplace or personal pension providers so you can make suitable arrangements with them. 

Your pension will stay the same for the first 6 months after your return to the UK. After this, it will meet UK pensions’ rates and continue its increase as normal. 


 Next Steps…


If you’re ready to move abroad to Europe or are looking for an International Removal, get in contact with us to talk to a member of our friendly team, request a callback, or arrange a free survey.