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Moving, living and retiring abroad

By Thu, October 14 2021 2:44 BSTNo Comments

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Can I get my pension if I live abroad?

Personal or workplace pensions can be paid to you wherever you live.

You’ll be entitled to any built-in annual increases in the same way as if you were living in the UK.

If you’re thinking of moving abroad, make sure you talk to your pension scheme or provider before you move.

Some providers might only be able to pay into a UK bank account.

Other providers might pay into an overseas bank account if you ask. Be aware that there might be extra charges to pay.

And bear in mind that your pension income will be paid in pounds sterling. This means it will be affected by fluctuations in exchange rates when you convert it to your local currency.

You need to be prepared for your income to rise and fall because of this.

If rates go against you, it can seriously affect how much you have to live on.

Need more information on pensions?

Call our helpline for the self-employed free on 0800 011 3797 or use our webchatOpens in a new window. One of our pension specialists will be happy to answer your questions.

 

Our help is impartial and free to use, whether that’s online or over the phone.

Opening times: Monday to Friday, 9am to 5pm. Closed on bank holidays.

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Do I pay tax on my UK pension if I live or move abroad?

If you live abroad, you’re likely to be classed as a non-UK resident and may have a complex tax situation.

You might have to pay UK tax on your pension income. This is because it’s classed as UK income. You might also have to pay tax on it in the country you live in.

If it has a double-taxation agreementOpens in a new window with the UK, you may be able to apply for tax relief or a refund. Find out more about tax if you move abroadOpens in a new window at GOV.UK.

Overseas tax laws might prevent you from taking any money from your pension tax free. This can affect which pension options are best for you.

For example, if you haven’t taken your tax-free cash lump sum from your pension before you move, you might be taxed on it as income in the country you live in.

If you're considering moving abroad or are already living abroad, it’s worth getting specialist cross-border regulated advice on your pension and how it's taxed. You can use our tool to find a retirement adviser, but you may need to do further research find a local specialist in your country of residence.

To find out more about overseas tax lawsOpens in a new window visit GOV.UK
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Moving before you begin taking income from your pension

If you move abroad before you start to take any pension income, you have two options:

It’s important to ask for regular updates on your pension if they’re not provided automatically.

When you decide to start taking money from your pension, you generally have the same options as you would if you were living in the UK.

If your pension provider doesn’t offer the payment option you want

Some pension providers won’t allow an overseas resident to set up a new policy. This could limit your ability to shop around.

Transferring pensions when moving abroad

It might be possible to transfer your UK pensions to a pension arrangement overseas if the pension plan is a Qualifying Recognised Overseas Pension Scheme (QROPS).

To qualify as a QROPS, certain conditions must be met. 

It’s important to get regulated financial advice from an expert on pensions and overseas transfers before deciding.

Find out more in our guide Moving your UK pension overseas
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Can I save into a UK pension plan if I live abroad?

You can live abroad and save into a UK pension scheme. But there are limits to the tax relief you can claim on your contributions.

Living abroad, or working for an employer who is based overseas, means tax relief on contributions might be limited – or not available at all.

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Do you qualify for tax relief?

Tax relief on your contributions is limited to whichever of these amounts is higher:

The total amount of tax relief you can benefit from is also limited by the Annual Allowance. Your annual allowance is the most you can save in your pension pots in a tax year (6 April to 5 April) before you have to pay a tax charge.

To get tax relief on your contributions, you must have been a relevant UK individual for that tax year. You are a UK relevant individual if:

Find out more in our guide Tax relief and your pension
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What happens to my State Pension when I move abroad?

Claiming and receiving State Pension when abroad

You can claim and receive a UK State Pension while living overseas.

But Pension Credit stops when you move overseas permanently. This is a means-tested benefit, which can top up your weekly income.

When you move, you need to notify the International Pension Centre, their contact details are at GOV.UKOpens in a new window

If you’re from Northern Ireland, you need to notify the Northern Ireland Pension Centre, their contact details are at nidirectOpens in a new window

You also need to contact HMRC to make sure you pay the right amount of tax, their contact details are at GOV.UKOpens in a new window

Your State Pension can be paid to a UK bank or building society account, or to an overseas account in the local currency.

You’ll need the international bank account number (IBAN) and bank identification code (BIC) numbers if you have an overseas account.

You’ll be paid in the local currency. That could mean the amount you get may change due to exchange rates.

Just as in the UK, you can choose to delay or stop taking your State Pension for a time and get extra State Pension.

If you move to a European Economic Area country on or after 1 January 2021, your right to some UK benefits might change. For the latest information, please go to GOV.UKOpens in a new window

Find out more about claiming State Pensions and benefits if you live or have lived abroad, at GOV.UKOpens in a new window
 
If you’re from Northern Ireland, find out more about your State Pension at nidirectOpens in a new window
 
Find out about your State Pension in our guide State Pension: an overview

Increases and tax once in payment

If you live abroad, you’re likely to be classed as a non-UK resident. This means you don’t usually pay UK tax on your State Pension.

But you might pay tax in the country you live.

Find out more about tax on your UK income if you live abroad at GOV.UK Opens in a new window

If you live in the UK, your State Pension usually rises each year. But if you move overseas, you’re only entitled to an annual increase if you live in:

If you move to a European Economic Area country on or after 1 January 2021, your right to some UK benefits may change. For the latest information, visit GOV.UKOpens in a new window

For a list of European Economic Area countriesOpens in a new window  go to GOV.UK
For a full list of countries where you’re entitled to an annual increaseOpens in a new window visit GOV.UK

If you move back to the UK, you will receive annual increases.

Impact before State Pension age

You will not build up an entitlement to a UK State Pension if you live and work abroad and pay into another country’s social security system. But you can count relevant social security contributions made in certain countries towards meeting the qualifying conditions for a UK State Pension if you pay into the social security system of:

Example

If you move to a European Economic Area country on or after 1 January 2021, your right to some UK benefits may changeOpens in a new window. For the latest information please see the GOV.UK website.

For a list of European Economic Area countriesOpens in a new window go to GOV.UK

You might also be able to claim a State Pension from the country you’re living in if you’re paying into its state pension scheme.

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Returning to the UK

If you return to the UK, you need to notify the International Pension Centre, their contact details are at GOV.UKOpens in a new window

If you’re from Northern Ireland, you need to notify the Northern Ireland Pension Centre, their contact details are at nidirectOpens in a new window

You also need to contact HMRC to make sure you pay the right amount of tax, their contact details are at GOV.UKOpens in a new window

The HMRC Residency helpline is 0300 200 3300 in the UK. Or call +44 135 535 9022 from outside the UK.

It’s also important that you notify your workplace or personal pension providers.

If your State Pension hasn’t been rising while you’ve been abroad and you remain in the UK for more than six months, it will be increased to the current rate.

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If you live abroad, you’re likely to be classed as a non-UK resident.

But you might have to pay UK tax on your pension income. This is because it’s classed as UK income. You might also have to pay tax on it in the country you live in.

If it has a double-taxation agreement with the UK, you can claim tax relief in the UK to avoid being taxed twice.

This article is provided by the MoneyHelper.