Pillar 2 and Pillar 3a: how Swiss pensions work for Brits, and where your UK pensions fit
Switzerland builds retirement on three pillars, and your payslip quietly funds the first two. The third, Pillar 3a, is the closest thing the Swiss have to an ISA with a tax break attached, and most Brits leave money on the table by ignoring it.
The short version
- Pillar 1 is the state AHV pension, funded from every payslip. In 2026 it ranges from CHF 1,260 to CHF 2,520 a month for a single person, and a 13th monthly payment arrives for the first time in December 2026 [1].
- Pillar 2 is your workplace pension fund (Pensionskasse), compulsory if you earn at least CHF 22,680 a year [2]. You can make tax-deductible buy-ins to fill gaps.
- Pillar 3a is voluntary and tax-deductible: up to CHF 7,258 (about £6,610) in 2026 if you have a pension fund, rising to CHF 7,373 in 2027 [4][10].
- From 2026 you can catch up on missed 3a years, going back to 2025 [4].
- UK pensions stay where they are unless you get regulated advice. Your UK State Pension is uprated in Switzerland [6][7].
Pillar 1: the AHV
The AHV (Alters- und Hinterlassenenversicherung, or OASI in English) is the Swiss state pension. Contributions come off your salary like National Insurance, with your employer paying the same again. The retirement ("reference") age is 65. A full pension needs a full contribution record, and each missing year cuts it by about 2.3%, so someone who arrives at 40 will get a partial AHV pension [1]. Couples' pensions are capped at 150% of the maximum single pension [1].
Your Swiss and UK records don't merge, but Swiss contributions can be counted to help you meet the qualifying conditions for the UK State Pension [6]. You get two separate pensions, each paid by its own country.
Pillar 2: your pension fund
If you're employed, aged at least 17 and earn at least CHF 22,680 a year (about £20,660), you must be in your employer's pension fund [2]. You and your employer each pay at least half of the contributions, and it all comes off your pay automatically [2]. Each fund has its own rules, so the plan at a bank on Paradeplatz may be far more generous than the legal minimum.
At retirement the fund turns your savings into a pension using a conversion rate; the legal minimum is 6.8% on the compulsory part, so CHF 200,000 buys about CHF 13,600 a year [1]. Many funds let you take part or all of it as a lump sum instead [1], which is taxed separately at a special rate.
Buy-ins: the move most Brits haven't heard of
Arrive in Switzerland mid-career and your pension fund will show a large gap between what you have and what you'd have if you'd been paying in since your twenties. You can fill it with voluntary buy-ins (Einkäufe), and the amount you pay in is deductible from taxable income [2]. For higher earners in Zurich that can mean a sizeable tax saving.
Before you write a cheque:
- Ask your fund for your maximum buy-in. It's on your annual statement or available on request.
- Mind the three-year rule. Benefits from a buy-in can't be taken as a lump sum within three years, and that includes cashing out if you leave Switzerland. If you might go home soon, a buy-in may not pay off.
- Check your tax status. If you pay tax at source, you'll need an ordinary assessment to get the deduction; see our guide to withholding tax.
- Think about the fund's health. You're tying money up for years in one employer's scheme.
Leaving your job, or leaving Switzerland
Change jobs and the money follows you to the new fund. Stop working or leave for a while and it goes into a vested benefits account (Freizügigkeitskonto) at a bank or foundation of your choice [2].
Leave Switzerland for good and you can normally take your Pillar 2 savings as cash. The exception is a move to an EU or EFTA country, where the compulsory part must stay in Switzerland until retirement age [2]. The UK is neither, so Brits returning home are normally outside that block, but confirm with your fund before you rely on it, especially if you're heading to Spain or France rather than Surrey. Under the UK–Swiss tax convention, a lump sum from a Swiss scheme is taxable only in Switzerland [5], where it's taxed separately at a special rate.
Pillar 3a: the Swiss tax break
Pillar 3a is a restricted pension account at a bank or insurer [3]. What you pay in comes off your taxable income; what you take out is taxed once at a special rate. The 2027 limits below were set by the Federal Council in October 2026 [10].
| 2025 | 2026 | 2027 | |
|---|---|---|---|
| Employees with a pension fund | CHF 7,258 | CHF 7,258 (about £6,610) | CHF 7,373 (about £6,720) |
| Self-employed with no pension fund | 20% of income, up to CHF 36,288 | 20% of income, up to CHF 36,288 (about £33,060) | 20% of income, up to CHF 36,864 (about £33,590) |
Sources: Federal Social Insurance Office [4] and ch.ch [3] for 2025 and 2026. The 2027 figures follow the Federal Council's autumn 2026 pension adjustment; check them with your provider.
The catch-up rule. Since 2026, anyone working in Switzerland who didn't pay the full amount in a year from 2025 onwards can make it up later, up to ten years back. Each year you can pay one extra "small contribution" on top of your normal one (up to CHF 7,258 in 2026), but only if you've paid the full normal amount for the current year and had AHV-liable earnings in both years [4]. The first catch-up for 2025 can be made in 2026 [4].
Getting the money out. 3a savings are locked until five years before the reference age, with early access if you buy a home to live in, start your own business, buy into your pension fund or leave Switzerland for good [3][4]. You must withdraw a whole account at once [3], which is why many people open several accounts and stagger withdrawals.
Two practical points. The deduction only counts in full if you're assessed properly, so people on tax at source need to apply for an ordinary assessment by 31 March. And 3a accounts sit inside banks: our guide to banking in Switzerland covers how deposits are protected.
Where your UK pensions fit
The UK State Pension. Switzerland is on the DWP's uprating list [7], so your State Pension rises every April as it would back home. The full new State Pension is £241.30 a week in 2026/27 [9]. See Swiss taxes for Brits for the tax side.
UK workplace and private pensions. You can leave them where they are and draw them from Zurich. Under Article 18 of the UK–Swiss convention, a UK pension paid to a Swiss resident is taxable only in Switzerland, while a lump sum from a UK scheme is taxable only in the UK [5]. Ask your UK provider about a treaty claim so it stops deducting UK tax from the income.
Transfers. You'll meet people who'll offer to move your UK pots into a Swiss or offshore scheme. Don't do it without regulated financial advice: a 25% overseas transfer charge can apply, defined benefit transfers usually need specialist advice by law, and pension scams are common. Check any firm on the FCA Register and Warning List first [8]. Our guide to UK pensions abroad and the transfer warnings explains the rules.
Keeping the UK record going. If you might retire back home, look at voluntary National Insurance from abroad.
Pension questions, especially "should I buy in?", come up all the time in our community group for Brits in Switzerland, and it's a good place to compare notes on how different employers' funds work.
Pound conversions use the Bank of England spot rate of 5 November 2026 (£1 = CHF 1.0976). Pensions and tax are general information, not advice.
Sources
- ch.ch: Retirement income in Switzerland
- ch.ch: The 2nd pillar
- ch.ch: The 3rd pillar
- Federal Social Insurance Office: Die dritte Säule (10 February 2026)
- GOV.UK (HMRC): 1977 UK–Switzerland Double Taxation Convention as amended by the 2017 Protocol
- GOV.UK: Benefits and pensions for UK nationals in the EEA or Switzerland
- GOV.UK (DWP): Countries where we pay an annual increase in the State Pension
- FCA: ScamSmart
- GOV.UK: The new State Pension, what you'll get
- Federal Social Insurance Office: AHV/IV-Minimalrente steigt um 20 Franken (2 October 2026; Pillar 3a limits from 1 January 2027)