What Can I Do with My UK Pensions If I Move Overseas?

Taking Your Pension Abroad — What You Need to Know

Relocating overseas is an exciting step, offering new opportunities and lifestyles. But for many UK nationals, one question arises quickly: what happens to my pension when I move abroad?

Whether you’re retiring to Portugal, starting a new career in Spain, or seeking a sunnier life elsewhere, your UK pension remains one of your most valuable assets. How you manage it after you move can have a major impact on your retirement income, tax position, and long-term financial security.

At Blacktower Financial Management, we’ve been helping expatriates structure and manage their pensions for over four decades. Here’s what you need to know about your options.

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1. Keep Your Pension in the UK

For many people, the simplest approach is to leave your pension where it is. You can usually continue to hold your pension in the UK, even as a non-resident, and start drawing benefits from abroad once you reach retirement age.

Advantages:

• No immediate transfer costs or complexity — you stay in your existing scheme.
• UK pension protections remain in place (including FSCS coverage and trustee oversight).
• Access to a wide choice of investment options in personal or workplace schemes.

Considerations:

• Your pension income will be paid in pounds sterling, exposing you to currency risk if you’re spending in euros, dollars, or another currency.
• Some UK providers will only pay benefits into UK bank accounts.
• Taxation can be complex — you may be liable in both the UK and your country of residence unless a Double Taxation Agreement (DTA) applies.

If you plan to move back to the UK in the future, keeping your pension there can make sense. However, if your move abroad is permanent, a more flexible international structure may be worth exploring.

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2. Transfer to an International SIPP

An increasingly popular option for expats is an International Self-Invested Personal Pension (SIPP). This is a UK-regulated pension designed specifically for people living overseas.

Benefits of an International SIPP:

• Regulated in the UK, so it maintains FCA oversight and familiar consumer protections.
• Provides global flexibility, allowing you to manage your pension while living abroad.
• Offers multi-currency investment and payment options, reducing exchange-rate exposure.
• Simplifies tax reporting and consolidates multiple pension pots into one structure.
• Enables professional investment management suited to your risk profile and residency status.

An International SIPP remains subject to UK pension rules, meaning you’ll typically have access from age 55 (rising to 57 from 2028), with up to 25% tax-free lump sum (depending on jurisdiction).

This solution is particularly suited to British expats who want to keep their pension under the UK regulatory system while gaining flexibility in how it’s managed and drawn overseas.

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3. Transfer to a QROPS (Qualifying Recognised Overseas Pension Scheme)

For some expatriates, particularly those permanently settled abroad, a QROPS may offer additional advantages.

A QROPS is an overseas pension scheme that meets HMRC criteria to receive transfers from UK pensions. It’s often used by individuals who have left the UK indefinitely or are retiring in another jurisdiction.

Potential Benefits of a QROPS:

• Local currency payments, avoiding exchange-rate volatility.
• Flexible investment choices, sometimes broader than UK-based schemes.
• Can be structured for local tax efficiency in the country of residence.
• In certain cases, may simplify estate planning, allowing benefits to pass directly to heirs.

Important Considerations:

• QROPS are not suitable for everyone — transfers can involve charges and may affect UK tax protections.
• A 25% Overseas Transfer Charge applies in some cases (for example, if you live outside the EU and your QROPS is based in an EU country).
• Regulatory standards vary between jurisdictions — it’s essential to choose a reputable provider.

Common QROPS jurisdictions include Malta, Gibraltar, and the Isle of Man, offering strong regulation and established pension frameworks for international clients.

Blacktower’s advisers can assess whether a QROPS or International SIPP best aligns with your residency status, goals, and long-term plans.

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4. Understand the Tax Implications

Before making any pension decision, it’s essential to consider how your income will be taxed once you live abroad.

If your new country has a Double Taxation Agreement with the UK, you may be able to receive pension income free of UK tax, paying tax only in your country of residence. Without one, you could be taxed twice — once by HMRC and again locally.

Also consider:

• Lump sum withdrawals may be taxed differently overseas.
• Some countries treat UK pensions as foreign income, subject to their local rates.
• For defined benefit (final salary) schemes, tax treatment and transfer values can be particularly complex.

A qualified cross-border financial adviser can coordinate with tax professionals to ensure your pension income is structured efficiently and compliantly.

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5. Factor in Currency and Investment Management

Currency risk can have a huge impact on retirement income. If you’re drawing a UK pension but spending in euros or another currency, exchange-rate movements can erode your spending power.

Options include:

• Holding investments in multi-currency funds or accounts.
• Setting up regular currency transfers to manage rates.
• Using investment strategies aligned with your residency and future liabilities.

Professional portfolio management can help preserve value and deliver sustainable income, regardless of where you live.

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6. Don’t Forget Estate Planning

Moving abroad can affect how your pension benefits are inherited. Rules differ by jurisdiction, and local succession laws (including forced heirship provisions) may conflict with your UK arrangements.

Both SIPPs and QROPS can offer greater control over death benefits, often allowing funds to be passed to chosen beneficiaries without UK inheritance tax, depending on the structure and timing of benefits.

Before transferring, review your beneficiary nominations and ensure your overall estate plan remains coordinated across borders.

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7. Seek Specialist Advice Before You Move

Every expat’s situation is unique. The right pension solution depends on:

• Your country of residence
• The type and value of your pensions
• Your retirement timeline
• Your tax and estate planning goals

At Blacktower Financial Management, our international advisers specialise in helping expatriates navigate UK pension rules, overseas transfers, and cross-border tax planning. With offices across Europe and beyond, we offer local expertise backed by over 40 years of global experience.

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Final Thoughts

Your UK pension will likely remain one of your most important assets after you move abroad. Understanding your options — from keeping it in the UK to transferring it to an International SIPP or QROPS — ensures you maintain control, flexibility, and tax efficiency wherever life takes you.

With the right advice, you can protect your retirement income, minimise tax, and build a structure that supports your financial goals internationally.

Blacktower Financial Management are not tax experts. You should seek advice from a qualified local tax professional before making any financial decisions.

Estate Planning, Inheritance Tax Planning, and Tax Planning are not regulated by the Financial Conduct Authority.