UK pensions abroad and the transfer warnings

Moving abroad doesn't mean you have to move your pensions. For most people the dullest option, leaving them where they are, is also the safest.

The short version

UK workplace and personal pensions can usually stay in the UK and pay you wherever you live.
Transfers to an overseas scheme must go to a QROPS, and since 30 October 2024 many of them, including those to EU schemes, face a 25% overseas transfer charge [1][2].
If your final salary (defined benefit) pension is worth more than £30,000, you must by law take regulated financial advice before transferring [3].
Cold calls about your pension are illegal and probably a scam [4]. Never take advice from a firm that contacted you out of the blue.
These are general information. We never recommend a transfer, and any transfer needs regulated financial advice.

Your options when you move abroad

Most Brits who move abroad end up with a mix of pension types: a final salary scheme from an old employer, a workplace pot from auto-enrolment, maybe a SIPP or personal pension. Here's how the main options compare.

Option	What it means	Main catches
Leave it where it is	The pension stays with the UK scheme and pays you when you're ready	Some providers restrict services or payments for people living abroad; currency swings
Draw it from abroad	Take income or lump sums, paid to a UK or overseas account	Tax rules depend on your new country and any double taxation agreement
Consolidate within the UK	Move several UK pots into one UK pension	Fees and lost guarantees; still needs care and often advice
Transfer to a QROPS	Move it to a recognised overseas scheme	Possible 25% overseas transfer charge, at least 40% tax if the scheme isn't a QROPS, scam risk [2]

Leaving your pensions in the UK

For a lot of people, the best move is no move. A UK pension is protected by UK regulation, and leaving it alone keeps any valuable guarantees, such as a guaranteed income from a final salary scheme.

A few housekeeping jobs before you go:

Track down every pot. Old workplace pensions get forgotten. The government's Pension Tracing Service can help you find lost schemes.
Give each scheme your new address and an email. Post goes missing abroad, and schemes need to reach you.
Ask each provider what it offers to non-UK residents. Some don't let people abroad open new products, change investments online or receive payments into foreign accounts. Better to know now than at 60.
Keep a UK bank account if your provider will only pay into one. Our guide to keeping a UK bank account when you live abroad covers the practicalities.
Nominate beneficiaries and keep the forms up to date.

Drawing your UK pensions from abroad

The pension freedoms work the same whether you live in Lancaster or Lanzarote. For most defined contribution pensions the minimum age to access your money is 55, rising to 57 in 2028 [4]. Anyone offering you cash from your pension before then is almost certainly running a scam [4].

Defined benefit schemes pay you an income from the scheme's normal pension age, with early or late options depending on the scheme rules.

Tax on UK pensions while you live abroad

This is where it gets fiddly. Whether the UK or your new country taxes your pension depends on where you're resident and on the double taxation agreement between the two countries, if there is one.

Under many agreements, private and workplace pensions are taxed only in the country where you live. You then apply to HMRC so your provider can pay you without UK tax, or reclaim tax already taken.
Government service pensions, for example from the civil service, armed forces, NHS or teaching, are often taxed only in the UK, though there are exceptions.
Some countries tax lump sums that would be tax-free in the UK.

Our guides to UK income while you live abroad and double taxation agreements and reliefs go into the detail. A tax adviser who knows both countries can check your case before you take a big lump sum.

Transfers abroad: QROPS and the overseas transfer charge

If you do look at moving a UK pension to a scheme abroad, the receiving scheme must be a qualifying recognised overseas pension scheme (QROPS). Checking that is your responsibility. If it isn't one, your UK scheme may refuse, or you'll pay at least 40% tax on the transfer [2].

The 25% overseas transfer charge

Transfers to a QROPS face a 25% overseas transfer charge unless an exclusion applies [1]. Before 30 October 2024, transfers to QROPS based in the EEA or Gibraltar were excluded. The Autumn Budget 2024 removed that exclusion for transfers made on or after 30 October 2024 [1]. So a move from a UK pension to a scheme in Spain or France is now treated like one to anywhere else.

The main exclusion left for ordinary savers is when you live in the same country as the QROPS at the time of transfer [1]. Even then, the exclusion only covers transfers within your overseas transfer allowance, which is usually £1,073,100 [2]. Anything above it is charged at 25% [2]. The other exclusions are for people working for the employer or international organisation behind the scheme [1].

The five-year rule

The charge can still bite after the transfer. If you move countries within five years, you must report it on form APSS 241 [2]:

move away from the country where your QROPS is based, and you may have to pay the 25% charge
move to that country, and you may get a refund of a charge you've already paid

Before any transfer, you must give your UK scheme the information on form APSS 263. If you don't provide it within 60 days of asking for the transfer, it's taxed at 25% [2].

Final salary pensions and the £30,000 rule

If your defined benefit pension is worth more than £30,000, you must by law get advice from a regulated financial adviser before you can transfer it [3]. The FCA's view is blunt: "We believe most people would be best advised not to transfer their DB pension" [3]. Giving up a guaranteed income for life, often linked to inflation, is a big decision and very hard to reverse.

Whatever the size or type of pension, a transfer needs regulated financial advice. Check any adviser on the FCA register yourself, and be wary of advice from people based abroad who aren't regulated by the FCA.

Spotting a pension scam

Brits abroad are a favourite target. A friendly voice at the British club, a "free pension review" or a cold call can all be the start of something that empties a lifetime's savings. The FCA lists the warning signs [4]:

a cold call, email or text about your pension. Pension cold calls are illegal and probably a scam; hang up and report it to the Information Commissioner's Office
a "free pension review". Professional pension advice isn't free
a guaranteed better return than your current scheme
unusual, unregulated, high-risk investments, such as overseas property
cash from your pension before 55 (57 from 2028)
high-pressure sales tactics and several firms each taking a fee

UK providers now carry out checks on transfers. If they find a red flag they can stop the transfer altogether. If they find an amber flag, they'll refer you to a free, impartial MoneyHelper Pension Safeguarding Guidance appointment before it can go ahead [5]. Don't see that as red tape. It's a free second opinion.

If you think you've been targeted, report it to Report Fraud, the UK's national fraud reporting service [6]. MoneyHelper, backed by the government, gives free guidance on pensions and scams [5].

UK workplace and private pensions abroad: leave them, draw them, and beware the transfer pitch