Can I Get My Pension If I Live Abroad?
LEARNING OBJECTIVES
We’re passionate about providing high quality, relevant and up-to-date financial information to British Expats around the world.
IN THIS ARTICLE, YOU WILL LEARN THE FOLLOWING
How to access your UK pension as an Expat
How different types of schemes are treated abroad
Whether or not you should consider transferring your pension
Best practise when taking financial advice
This article is intended for British Expats with UK pension plans.
With over 90,000 British expats leaving the UK in 2022 alone, a common question is can you access your Pension abroad?
Whilst the simple answer is always yes - how and in what capacity will vary depending on the type of pension you hold.
These include, a private pension, company pension, defined contribution pension, defined benefit pension, or a UK state pension.
We will answer all these questions and more within this article.
What Happens To My Pension If I Move Abroad?
For simplicity, it's best to break this down into the various types of schemes.
UK Private Pension Plan
In the first instance nothing, your pension pot will stay as it is. If you have a SIPP that you manage or with the help of a UK financial adviser, you will have visibility on the investments.
Company Pension Defined Contribution
The same as above.
Company Defined Benefit Pension
If you are in draw-down the payments will continue as usual. If not, the administrators will continue to operate the scheme.
UK State Pension
If you are taking your pension and your bank account details remain the same, then payments will continue. If you are still working then your national insurance contributions will stop being paid automatically in line with your last paycheck.
Note, you can and often should pay voluntary national insurance contributions from abroad. This will allow you to receive a full UK state pension at retirement age.
Can I Get My Private Pension If I Live Abroad?
Yes, but you will need to confirm the options available from your current scheme provider. Some providers will allow access for non UK residents. Older legacy schemes pre-dating 2010 tend to not allow flexible access.
Furthermore, many schemes do not allow non-UK residents to access their pension fund at all. This means you would have to en-cash the full pension in one go which will likely create a large tax liability.
The tax would be held at source by your pension provider. Subject to your new country of residence having a double taxation agreement with the UK, and you being tax registered, you could then claim the tax back.
The rate is determined by your tax code and aligns with UK tax bandings based on your income for the tax year.
If your existing pension scheme provider does not offer flexible access, you will need to transfer the pension to access your money in a tax efficient way.
Can I get My Workplace Pension If I Live Abroad?
If the scheme is a defined contribution pension then the position is the same as above.
If it is a Defined Benefit Pension in draw-down, payments will continue as usual. It would however be worth looking into a currency broker.
Alternatively, you can keep your UK bank account and do this yourself via a company such as Wise. This will mitigate the risk of being paid in GBP and spending in Euros, USD, CAD$ or AUD$, etc.
This means you are not susceptable to the exchange rates on the day you are paid by your DB scheme.
Can I Get My State Pension If I Live Abroad?
Yes, you can in most countries and can now even have the money sent to you in your local currency.
If you require further information, you can contact HMRC directly on
+44 191 218 7777
International Pensions Direct Payment - GOV.UK
What If I Cannot Access My UK Pension?
If you can't access your pension or, you can only en-cash the full amount, you should consider transferring your pension out of the existing arrangement.
What Are My Pension Options When I Live Abroad?
If you can access your pension, don't want any ongoing advice, and are not concerned about currency risk or ongoing management, you can leave it where it is and drawdown as you wish.
Transfer your pension to an Overseas Scheme also known as a Qualifying Recognised Overseas Pension Scheme QROPS. This option can be considered if you live within the European Economic Area EEA, or a country with a Recognised Pension Scheme ROPS. A list of which can be found here.
Transfer to a UK scheme for non-UK residents. Known as an International SIPP, this type of pension scheme retains the protection of UK regulators such as the Financial Conduct Authority, Financial Service Compensation Scheme, and the Pensions Regulator. At the same time it allows for flexible access and control over your investments, ongoing management, and mitigation of currency risk.
Do I Need Expat Financial Advice?
For personal pensions including SIPP's, a workplace pension scheme, and most defined contribution schemes, it should not be mandatory.
If you need help choosing pension providers or allocating funds, talking to an expert is a good idea. The same goes for managing pension income or dealing with inheritance taxes. We can provide valuable assistance in these areas.
However, solutions are available that do not require the use of a financial adviser. You can find a comparison of the International SIPPs avaiable here.
For all Defined Benefit Pension Schemes you will need a Pension Transfer Specialist who is regulated and authorised by the FCA. You will also need a European-regulated financial adviser to assist with product selection and fund allocation.
To understand how our expert and regulated team can help with your retirement abroad, schedule a free initial consultation using the button below.
FAQs
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Most advisers charge between 1% and
5% based on the value of the pension pots in question.
The Wealth Genesis is the first Expat Adviser to charge the same flat-fec (£3,000) to all clients, regardless of pension value.
A case study detailing the cost of an International SIPP can be found here. -
France no longer has a recognised scheme to transfer to, previously a PERPS.
As such, your options would be as outlined above.
So, keep it where it is, transfer it to a QROPS, or transfer to an International SIPP. -
Like France, there are no recognised schemes in Spain, so the options would be the same.
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If you are over age 55 you can transfer to a Super Annuation scheme as long as it's on HMRC's list of QROPS.
Alternatively, or perhaps more suitable depending on your exact position and requirements, would be to transfer to an International SIPPFurther information is available here.
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You cannot transfer your UK pension to the US but options are available.
Further information is available here.
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As an International SIPP is a UK pension it is UK compliant and you can continue to use it with no changes required.
If the move is permanent then it may be sensible to transfer to an onshore solution to enable ongoing management from a local FCA authorised adviser and to reduce costs.
For a QROPS it will depend on which overseas scheme you have transferred to and the flexibility offered by the provider.
Any pension income would need to be declared to HMRC and the relevant tax paid. For an International SIPP, payments are made via the PAYE system with tax held back at source and paid to HMRC directly.
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Contact the International Pension Centre on the below information;
Telephone: +44 (0) 191 218 7777
Textphone: +44 (0) 191 218 7280
Monday to Friday, 8 am to 6 pm GMT
