Pension Transfer Guide For Non-UK Residents & Expats
For UK expats living abroad, or planning to move or retire overseas in the future, your pension options are probably high on the list of financial priorities. One of the key questions many expats face is whether to leave their pension in the UK or transfer it to their new country of residence.
The good news is that UK expats do have several options when it comes to managing their pensions and accessing benefits once they are no longer UK residents. Our guide will walk you through these pension transfer options and some key benefits and considerations.
With the right information and support, you can make a well-informed decision that’s right for your future, minimising stress and giving you greater confidence in your financial planning and retirement.
Should You Transfer Your UK Pension Overseas?
The first step in managing your pension as a UK expat is to determine whether a pension transfer is the right move for you. It’s important to know that leaving your pension where it is with your current UK provider is still an option, and for some, it might be the best one.
The right choice depends entirely on your personal circumstances and future plans. Are you planning to retire abroad long-term, or is there a chance you might move back to the UK one day?
If you do plan to retire overseas, a good starting point is to contact your UK pension provider and ask how you will be able to access your pension benefits once you're no longer a UK resident. Some pension features and access may become limited once you move abroad, so understanding how your specific scheme may be affected is essential.
Ask whether you’ll still be able to access your pension on your own terms, ideally through full flexible access drawdown. This allows you to withdraw money from your pension as and when you need it, without restrictions. For expats, this flexibility can be especially valuable, as life overseas can change quickly, and your income needs may vary from year to year.
Unfortunately, since Brexit, many UK pension providers have introduced tighter restrictions for non-UK residents. Some may only allow you to take your pension as a one-off lump sum, which could lead to terrible tax consequences and leave your money out of the market, missing out on potential long-term growth.
Some UK providers may refuse to make payments to non-UK bank accounts, which may be an issue as many expats struggle to maintain bank accounts in the UK. Additionally, you might lose the ability to manage and adjust the underlying investments within your pension.
If you find yourself facing any of these limitations, it could be time to explore pension transfer options. Understanding your choices now will help you take control of your financial future and ensure that your pension savings are working for you.
Benefits of Transferring Your Pension Abroad
Flexible Access In Retirement
A pension transfer could help you maintain the flexible access that's often essential for expat life, especially given the potential changes and uncertainties that can come with living abroad. The International SIPP, for example, offers the ability to start making withdrawals from age 55. Crucially, it allows you to choose both the amount and the frequency of those withdrawals. This kind of flexibility can be a real advantage when it comes to managing your income tax efficiently, helping you stay in control of your tax brackets and overall financial plan.
Multi- Currency Options
Most expats living abroad will at some point be holding, earning, investing, and spending money in multiple currencies. This introduces a greater degree of currency risk, meaning your wealth could be negatively impacted by unfavourable exchange rate fluctuations. Many international pension solutions offer the ability to hold and withdraw funds in multiple currencies, helping to mitigate this risk. This flexibility can make managing your finances across borders effortless, and ensures that transferring between currencies is easy, efficient, and less likely to eat into your wealth over the long term.
Pension Consolidation
Another key benefit of a pension transfer for expats is the opportunity to consolidate multiple UK pension pots into a single, more manageable policy. It's common for people to accumulate several pensions over the course of their career, especially if they've changed jobs frequently. Some of these pensions can become dormant or forgotten altogether. Consolidating your pensions not only helps you keep track of your retirement savings more efficiently, but it can also streamline your financial management and potentially lead to significant reductions in costs and fees over time.
Control Over Your Investments
Many UK pensions, particularly workplace pensions, do not allow policyholders to manage the underlying investments. This lack of control could mean missing out on valuable opportunities for investment growth, which in turn could impact the overall growth of your retirement funds and long-term wealth. Over time, this can make a significant difference to the lifestyle you’re able to enjoy in retirement. Pension solutions such as the International SIPP offer a more flexible alternative, allowing you to choose from a wide range of investment opportunities. This ensures that your pension is actively aligned with your overall financial goals, and that your money is going further.
Inheritance Benefits
Some UK pension schemes don’t allow you to choose a beneficiary to inherit your pension pot if you pass away. By transferring to another type of pension scheme, such as an International SIPP, you can take greater control over your legacy. These options allow you to name a beneficiary and ensure that 100% of your remaining pension can be left to them, offering both peace of mind and greater flexibility in your estate planning.
Pension Transfer Options For UK Expats
If you feel that keeping your pension in the UK is going to limit you once you have retired abroad, there are a few options to explore:
The International SIPP
For UK expats, one of the best pension options available is undoubtedly the International SIPP (Self-Invested Personal Pension). This tax-efficient scheme has been designed specifically for expats, offering the flexibility and features needed for international living. As the scheme remains in the UK, it will be regulated by the Financial Conduct Authority (FCA) and protected by the Financial Services Compensation Scheme (FSCS), providing a high level of consumer protection and peace of mind.
The International SIPP allows flexible drawdown from age 55 (rising to 57 from 2028), giving you control over how and when you access your pension income. It also offers access to a broad range of investment options, including shares, ETFs, bonds, and funds, enabling you to tailor your portfolio to match your personal risk profile and long-term financial goals.
For more information about the International SIPP, visit our dedicated page here.
QROPS (Qualifying Recognised Overseas Pension Scheme)
A QROPS (Qualifying Recognised Overseas Pension Scheme) is a type of pension solution that allows you to move your pension funds out of the UK to a scheme that’s still recognised by HMRC.
Although this used to be a popular and tax-efficient option for UK expats looking to transfer their pensions abroad, recent changes in regulations have made it far less attractive. Now, if an expat transfers their pension to a QROPS located outside their country of residence, they are required to pay the Overseas Transfer Charge- a staggering 25% of the total transfer value.
Since most QROPS are based in jurisdictions like Malta and Gibraltar, this charge makes the option largely unviable for anyone not living in those countries. In short, unless you are a resident of one of the few locations where a QROPS is based, you could end up losing a significant portion of your pension through charges alone.
UK Expat Pension Transfer Process
The process of transferring your pension abroad will largely depend on the type of UK pension scheme you hold. If you have a Defined Contribution (DC) scheme, the transfer process is usually fairly straightforward and can move quickly, sometimes taking just a few weeks. However, if your pension includes more complex assets such as shares, funds, or international equities, this could delay the transfer.
For those with a Defined Benefit (DB) scheme, the process is more complex. You’ll need to exchange your final salary pension for a specific sum known as the Cash Equivalent Transfer Value (CETV), which can then be moved into a new pension product of your choice.
Obtaining a CETV can take up to three months, and if your CETV is £30,000 or more, The Financial Conduct Authority requires you to work with a regulated financial adviser before proceeding with the transfer. It’s also important to note that once you begin drawing income from a DB scheme, you will no longer be able to transfer it, so timing and advice are key.
UK Expat Pension Transfer Costs
If you’re considering a pension transfer, it’s important to factor in the associated costs and to make sure you have a clear understanding of any fees involved when seeking financial advice. Unfortunately, some firms may charge hidden commissions, ongoing annual fees, or tie their recommendations to products that benefit them rather than you.
At The Wealth Genesis, we pride ourselves on offering a uniquely transparent and competitive charging model. We charge a flat initial advice fee of £3,000 for all clients, along with a fixed ongoing charge of 0.85%. There are no hidden fees, no surprise costs, and no commissions, as we are a completely independent firm. This means you’ll always know exactly what you’re paying and can move forward with confidence. With our upfront and honest approach, our clients get a clear picture of what their pension transfer will cost from the very beginning.
Independent Financial Advice For Non-UK Residents
At The Wealth Genesis, we specialise in helping expats around the world find the pension solution that best suits their individual needs. We work closely with you to first determine whether a pension transfer is necessary and truly in your best interest. If it is, we’ll guide you through the best course of action based on your unique circumstances.
