Living abroad – what does it mean for your pension plans in the UK?

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In 2024, 77,000 Brits packed their bags and moved overseas. But while moving abroad can mark the start of an exciting chapter in your life, many expats find themselves facing one crucial financial question: how does living overseas impact my pension plans in the UK? Here are a few things you need to be aware of.

What happens to my UK pension plans when I move abroad?

When you move abroad, any pension plans you have in the UK won’t follow you unless you arrange for them to be transferred overseas. 

Instead, they’ll stay with your UK provider. And once you reach 55 (57 from 6 April 2028), you can start taking money from them, even while you’re overseas.

Transferring your UK pensions abroad

You can usually transfer your UK plan(s) to a different pension scheme abroad. But you need to make sure you’re transferring into a ‘Qualifying Recognised Overseas Pension Scheme’ (QROPS). This is essentially a pension scheme that follows similar rules to UK schemes.

You may be able to make this transfer tax-free. Or you might need to pay 25% tax on the amount you’re transferring out of the UK. It depends on your individual circumstances, including where you live when you make that transfer. To find out if this tax charge might apply to you, you can visit GOV.UK. 

There’s also something called the ‘overseas transfer allowance’. This is a cap on the amount of pension savings you can transfer out of the UK. Unless you have protection in place, the overseas transfer allowance is usually £1,073,100. Transfer any more than this and you’ll normally need to pay a 25% tax charge on the excess.

If you try to transfer your UK plans to a scheme that isn’t a QROPS, you could face a 55% tax charge and even extra penalties on top of that. This is because it could be seen as you making an unauthorised payment from your plan. Plus, a transfer to a scheme that isn’t a QROPS probably won’t be regulated, and you might not be able to get any compensation. 

Overall, transferring a pension plan overseas is a big decision, and it won’t be right for everyone. Remember, you could lose valuable benefits and guarantees. Do consider getting financial advice if you’re thinking about transferring, as it can be quite complicated. It could be worth finding an adviser in the UK and in the country you’re living in. 

If you’re trying to transfer a defined benefit plan worth more than £30,000, you legally need to get financial advice. 

How can I take my money from my UK pension plans?

When you live in the UK, there are a few different ways you can take money from a pension plan.

But if you’re abroad, you might find that your options for taking your money are more limited than if you were living in the UK. So do get in touch with your provider to see what options they offer if you live overseas. If the option you want isn’t available with them, you might think about shopping around to see if another UK-based plan or provider offers what you’re looking for. But it’s important to be aware that some providers won’t let you set up a new plan when you’re overseas.

Some providers will be willing to pay into an overseas bank account (although there may be extra charges). Others might only pay into a UK account. Keep in mind the exchange rate will affect how much you get when your pension money is changed into your local currency, and exchange rates can go up and down. 

Again, it could be worth taking financial advice.

How will I be taxed on my UK plans when I live abroad?

When you live abroad, your tax situation can be complex. 

If you take money from a UK pension plan, you might need to pay UK income tax on it, as it counts as UK income. The country you’re living in might also tax you. But the UK does have a ‘double-taxation agreement’ with lots of countries. This means that you may either be able to get tax relief or a refund, so you won’t end up needing to pay tax on your pension savings twice. 

You can find out more about tax on your UK income when you live abroad on GOV.UK. 

In the UK, you can normally take up to 25% of your pension plan tax-free. The total amount you can normally take tax-free across all your pension plans is £268,275. But you might not be able to take money tax-free in the country you’ve moved to, and it may be taxed as income. 

Can I keep paying into a UK pension if I live overseas?

Possibly, but it depends on the rules of your pension scheme, so do check with your provider.

And be aware that you may not be eligible to get any tax relief on the payments you make into that plan. Or the amount you do get might be limited. 

Whether you get tax relief and how much you get depends on your own circumstances. For example, you can still get tax relief if, in that particular tax year, you have ‘relevant UK earnings’ that could be taxable in the UK. 'Relevant UK earnings’ include things like income from employment, including salary and overtime. You can find out more about pension tax relief on MoneyHelper.

What happens to my State Pension if I move abroad?

You’ll still be able to claim and receive your UK State Pension if you move abroad, as long as you’ve paid enough National Insurance contributions. It can be paid into a UK bank or building society account, or into an overseas account in the local currency. 

However, you’ll need to let HMRC know that you’ve moved to make sure you’re paying the right amount of tax. You typically won’t pay UK tax on your State Pension, but you might need to pay tax in the country that you live. You’ll also only get yearly increases to your State Pension if you live in certain countries. You can find out more about this on the government’s website.

Overall…

If you’re living abroad, there’s a lot to think about when it comes to your pension plans. And a lot of things hinge on your own personal circumstances.

Make sure you review your pension plans regularly. Think very carefully before making any decisions – and if you’re not sure, do think about getting financial advice.

 

The information here is based on our understanding in July 2025 and shouldn’t be taken as financial advice.

A pension is an investment. Its value can go down as well as up and it could be worth less than was paid in.

Your own personal circumstances, including where you live in the UK, will have an impact on the tax you pay. Laws and tax rules may change in the future.

Standard Life accepts no responsibility for information in external websites. These are provided for general information.