Pension Transfers & Defined Benefit Pensions UK

Can I Transfer My Pension Abroad UK?

Moving your UK pension overseas. QROPS rules, tax implications, and what happens to your pension if you emigrate from the UK.

· · 4 min read

Pension information is based on current UK legislation. Pensions are regulated by the FCA and The Pensions Regulator. This is not financial advice — consider consulting an FCA-regulated financial adviser.

Transferring UK pensions abroad is possible but heavily regulated. Here’s what you need to know.

Your Options

When Moving Abroad

Option Description
Leave in UK Draw when retired
Transfer to QROPS Move to overseas scheme
Combination Move some, leave some

Comparison

Factor Leave in UK Transfer to QROPS
Tax charge None 25% (unless exempt)
UK rules Continue New country’s rules
Currency GBP Foreign currency
Protection UK regulated Varies
Flexibility UK options Depends on scheme

QROPS Explained

What Is QROPS?

Feature Details
Qualifying Meets HMRC requirements
Recognised Listed by HMRC
Overseas Outside UK
Pension Scheme Regulated pension

HMRC Requirements

Requirement Details
Regulated By local authority
Reports to HMRC For 10 years
Meets local rules Tax treatment
On HMRC list Published online

Finding QROPS

Step How
HMRC list Online publication
Country-specific Check destination
Updates regularly Schemes added/removed
Verify current Before transferring

The 25% Charge

When It Applies

Scenario 25% Charge?
Resident in different country to scheme Yes
Resident and scheme both in UK No (not a transfer abroad)
You’re in same country as scheme No
You and scheme both in EEA No
Non-EEA transfer Yes

Exemptions

Exemption Example
Same country Live in Australia, transfer to Australian QROPS
EEA-EEA Live in Spain, transfer to Spanish QROPS
Employment Working for employer requiring overseas pension

Example

Scenario Charge
UK → Australian scheme, you live in Australia 0%
UK → Gibraltar scheme, you live in UK 25%
UK → Malta scheme, you live in Malta (EEA) 0%
UK → Jersey scheme, you live in Jersey May apply

The Transfer Process

Steps

Step Action
1 Choose QROPS from HMRC list
2 Get transfer value from UK scheme
3 Complete forms for both schemes
4 Tax charge assessed (if applicable)
5 Transfer processed
6 HMRC monitors for 10 years

Documentation

Required Purpose
QROPS details Receiving scheme
Transfer forms Authorisation
ID/residency proof Tax exemption if applicable
Declaration HMRC reporting

Timeline

Stage Typical Time
Initial enquiry 1-2 weeks
Transfer value 2-4 weeks
Processing 4-12 weeks
Total 3-6 months

Tax Implications

During Transfer

Tax When
25% charge If applicable
Deducted Before transfer
From pension Reduces fund

After Transfer

Aspect Treatment
UK tax rules 10-year monitoring
Unauthorised payments UK tax charges possible
Local tax New country’s rules
Tax treaty May affect treatment

UK Monitoring Period

HMRC Monitors For 10 Years
Unauthorised payments Tax charges
Scheme changes Status checks
Your residence For charge purposes

Specific Situations

Defined Benefit Pensions

Consideration Details
Guaranteed income Lost if transferred
Final salary link Lost
Inflation protection May be lost
Spouse pension May be lost
Think very carefully Usually keep

State Pension

Rule Details
Cannot transfer State pension
Still receive Wherever you live
Frozen vs unfrozen Depends on country

State Pension Abroad

Country Annual Increases
EU/EEA Yes (triple lock)
USA Yes
Australia No (frozen)
Canada No (frozen)
New Zealand Subject to agreement

Leaving Pension in UK

Advantages

Benefit Details
No transfer charge 25% avoided
UK protections FSCS, regulation
Known rules Familiar system
GBP stability If returning possible
Tax treaties Often favourable

How to Draw Abroad

Method Process
Keep UK pension Until retirement
Draw at pension age 55+/57+
Transfer to overseas bank Then spend
Tax where resident Use tax treaty

Tax Treaties

Treaty Provides Details
Which country taxes Usually residence
Double taxation relief Avoid paying twice
Specific rules Per country

Red Flags

Pension Scam Warning Signs

Warning Risk
Cold call Scam
“Beat the tax charge” Suspicious
Unusual investment Risky
Pressure to transfer Red flag
Unregulated scheme Danger

Protect Yourself

Action Why
Check QROPS list Must be on it
Regulated advice FCA registered
No cold calls Always scam
Take time No rush

Getting Advice

When Essential

Situation Advice Needed
Large pension Significant decision
Defined benefit Complex consideration
Tax implications Professional guidance
Any transfer Worth checking

Who Can Advise

Advisor Regulation
UK IFA FCA regulated
Overseas advisor Check local regulation
Pension specialist Abroad experience
Tax advisor Cross-border expertise

Summary

Key Point Details
Transfer possible To QROPS only
25% charge Unless exempt
Usually better Leave in UK
State pension Cannot transfer
Get advice Essential for decisions
Decision Factors Consider
Tax charge 25% is significant
Currency risk Both ways
Protection UK vs overseas
Benefits lost Especially DB
Return possible? If might come back

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Sources

  1. GOV.UK — Pension and retirement
  2. MoneyHelper — Pensions guidance