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Retirement PlanningSeptember 30, 2025

Not Just Final Salary: Exploring Your UK Retirement Options as an Expat

Hoxton BlogNot Just Final Salary: Exploring Your UK Retirement Options as an Expat

  • Retirement Planning

So, you’ve left the UK, settled into life abroad, and begun integrating into a new culture. But have you thought about your pension?

Once you move abroad, the rules around tax relief, pension transfers, and access to local retirement schemes can change significantly. 

While you can usually keep and draw from UK private pensions, your ability to contribute may be limited. 

For some people, transferring to an overseas scheme such as a QROPS or setting up an expat-focused plan like a QNUPS could provide tax and currency advantages – if the structure is right. 

Of course, it is very important to keep in mind that this path is not right for everyone, and that is why seeking advice from a regulated adviser is so important before making any changes. 

At the same time, the complexity of transfer charges, contribution allowances, and double taxation agreements means careful planning is essential. 

The best approach often involves balancing UK-based pensions with international solutions and local retirement vehicles. 

Done well, and with the help of a financial adviser, this can help you minimise tax exposure, stay flexible if you move again, and can safeguard your long-term retirement income. 

Up to this point in our series, we’ve focused on the options for defined benefit pensions when moving overseas. However, that’s only part of the picture. 

There are several other ways to save for retirement, and each is worth considering carefully if you move abroad. 

UK Private Pensions

As an expat, you don’t lose your UK private pensions when you move abroad. 

Whether you hold a workplace scheme or a SIPP, your pension remains in place and accessible, even once you’re living overseas. 

What does change, however, are the rules around how much you can contribute and the tax relief you can receive. 

To qualify for tax relief, you’ll need to meet the definition of a “Relevant UK Individual.”  

This typically applies if you still have earnings taxable in the UK, or if you’ve been a UK resident within the past five years and are already a member of a UK-registered pension scheme. 

If you fall outside of these conditions, contributions can usually still be made, but without the benefit of tax relief. 

Where relief does apply, the limit is the higher of 100% of your relevant UK earnings or £3,600 gross per year. 

For expats with no UK earnings, this means you can still contribute up to £3,600 annually and receive tax relief for up to five tax years after leaving the UK. 

Once that period passes, unless you regain relevant UK income, tax relief will no longer be available. 

It’s also important to remember that all contributions are subject to the UK’s Annual Allowance, currently set at £60,000. 

For higher earners, the allowance may taper down, and those who have accessed their pensions flexibly could be restricted by the Money Purchase Annual Allowance. Exceeding these limits can trigger tax charges, so careful planning is key. 

Overseas Pension Transfers to a QROPS

For many expats, moving a UK pension overseas can seem like a good idea – but it doesn’t suit everyone. Once you transfer, your pension is no longer covered by UK rules and protections. That means you lose safeguards such as compensation if a provider fails, or the right to complain to the UK Pensions Ombudsman. You may also give up valuable benefits from your current scheme. 

There’s also the issue of currency risk. If your pension ends up in a different currency to the one you’ll spend in retirement, exchange rate changes could reduce the value of your income. 

Transfers can only go into an HMRC-approved scheme, known as a QROPS. If you move your money into a non-approved scheme, the UK could treat it as an “unauthorised payment” and hit you with tax charges of 40% or more. Even when the scheme is approved, you may still face the Overseas Transfer Charge – a 25% tax – unless you meet certain exemptions, such as living in the same country as the scheme. 

There’s also a limit, called the Overseas Transfer Allowance, currently set at just over £1 million. Any transfer above this could face extra tax. 

In short, while QROPS can help with things like currency access and estate planning, the risks and charges are significant. Professional advice is essential before making any move. 

International or Expat-Focused Pensions

Qualified Non-UK Pension Schemes (QNUPS) are pension arrangements provided for under UK legislation. 

They do not receive UK pension tax relief on contributions and are not HMRC-approved products. Suitability depends on personal circumstances and local law. 

They were created in 2010 and can help people save for retirement, especially those living or working abroad. 

Unlike UK pensions, QNUPS don’t have strict limits on how much you can pay in. This makes them useful for people who have already put as much as possible into a UK pension, or for those with larger sums to invest. 

They also allow investments in a wide range of assets, including property and shares, across different countries. 

One big advantage is linked to inheritance tax (IHT). If a QNUPS is set up properly and genuinely used as a pension, the money inside it is usually not counted as part of your estate when you die. This means it can often be passed on to your heirs without a large IHT bill. 

However, from 6 April 2027, UK policy changes will bring most unused pension funds and death benefits into the estate for IHT, not just for UK-registered schemes – the indication is that QNUPS will also be caught. Details are being finalised, but the direction is clear, so it is best to plan on this basis. 

It is also important to bear in mind that QNUPS are not risk-free. They don’t qualify for UK pension tax relief on contributions, they can be expensive to set up and run, and the rules vary depending on the country where the scheme is based.  

HMRC can also challenge schemes if they think they are being used mainly to dodge tax. Because of these risks, expert advice is essential before moving money into a QNUPS. 

Tax Relief on Contributions to Overseas Schemes

You may claim UK tax relief on contributions made to certain overseas pension schemes under conditions such as: 

Migrant Member Relief: if you contributed before moving to the UK and were already receiving tax relief. 

Double Taxation Relief: if a UK treaty with the relevant country covers your contributions. 

Transitional Corresponding Relief: for schemes where you had relief around the 2005-2006 period.  

You must report these contributions correctly in your Self Assessment tax return, including full details of the scheme and relief claimed.  

General Investment and Non-Pension Retirement Savings 

Beyond pensions, expats have other ways to save for retirement, such as general investment accounts, offshore bonds, or a mix of other investment products. 

These can offer flexibility and access to different types of investments, which may suit people living and working internationally. 

However, these options come with important considerations. The biggest is tax. Every country has its own rules on how investments are taxed, and what may be tax-efficient in one place could be very costly in another. 

Some countries also have double taxation treaties with the UK, which are designed to stop the same income being taxed twice – but how these treaties apply can be complex and depends on your personal circumstances. 

Another key issue is currency risk. If your investments are held in a different currency from the one you plan to retire in, exchange rate movements could significantly affect the value of your savings. 

For example, if you save in U.S. dollars but plan to retire in Europe, a shift in exchange rates could reduce the spending power of your retirement income. 

Because of these risks, careful planning and professional advice are vital to ensure your savings are structured in the most efficient and secure way for your future. 

A Summary of Your Options

Option 

Benefits 

Drawbacks and Rules 

UK Private Pensions 

Familiar structure, keep contributions 

Tax relief limited if non-UK relevant earnings 

QROPS Transfers 

Local currency, consolidation 

Subject to 25% charge and must meet HMRC rules 

QNUPS & Offshore Plans 

Contribution flexibility, IHT planning 

Higher fees, complex setup, jurisdiction risk 

Overseas Tax Relief 

Potential relief via treaties or rules 

Strict eligibility and reporting required 

General Investments 

Flexibility and diversification 

Tax treatment varies by country & risk level 

Making Sense of Complex Retirement Choices Abroad

Planning for retirement as an expat can be complicated, with rules and tax treatments varying widely from country to country. 

At Hoxton Wealth, we specialise in helping internationally-mobile clients understand their options and make informed choices. 

Whether you’re considering transferring a UK pension overseas, looking at alternative vehicles such as QROPS or QNUPS, or simply want to explore other savings and investment strategies, our advisers can help explain the pros and cons in clear, straightforward terms. 

We take time to understand your personal circumstances – where you live now, where you may retire, your family needs, and your long-term goals. 

With this in mind, we assess the full range of retirement planning tools available to you, from local and offshore pension schemes to flexible investment accounts and tax-efficient solutions. 

Our aim is to help you structure your savings so they are secure, efficient, and aligned with your lifestyle, while keeping you aware of the risks and regulatory requirements. 

Wherever life takes you, the right plan ensures your retirement stays on track. 

Disclaimer:This article is for information only and does not constitute personal advice. The rules around pensions and tax are complex and subject to change. 

Any decision to transfer or restructure your pension should be based on regulated financial advice tailored to your circumstances. 

Hoxton Wealth UK Limited is authorised and regulated by the Financial Conduct Authority (FRN 586130). 

If you are outside the UK, you may also need to seek advice from a locally regulated adviser in your country of residence. 

Hoxton Wealth UK can advise UK clients and some expatriates depending on local jurisdictional rules 

If you live overseas, you should check whether we are able to provide regulated advice in your country of residence.

About Author

Lois Vallely

September 30, 2025

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