UK Pension Transfer While Living Abroad: Step by Step Guide

Many expats find themselves living abroad and uncertain about how to access or manage a UK pension. Changing tax rules, currency fluctuations, and administrative differences can make the process feel complex.

Transferring your UK pension overseas may offer certain advantages, such as greater flexibility or alignment with your circumstances abroad. However, transferring is not suitable for everyone, and the wrong approach could create unnecessary tax exposure or other unfavourable outcomes.

This guide sets out how a transfer works, when it may be appropriate, and how to approach the process responsibly.

Offshore pensions are not suitable for everyone and depend on personal circumstances, tax residency, long term location, and regulatory considerations.

At Hoxton Wealth, we have supported many British expatriates worldwide with the management and transfer of their pensions.

Our advisers are knowledgeable in cross border financial planning and pension transfers, helping to support compliance with HMRC regulations and local tax laws. This international experience provides useful insight into how to approach a UK pension while living overseas.

Services are delivered only by the appropriately regulated Hoxton entity based on client location and regulatory permissions. This helps provide protection across UK, EU, UAE, Asia and US regulatory regimes.

A UK pension transfer involves moving accumulated retirement funds from one pension scheme to another. Within the UK, this may involve consolidating pensions or changing providers.

For those living abroad, a transfer may involve moving a UK pension into an international structure that aligns with long term plans and residency, such as a Qualifying Recognised Overseas Pension Scheme (QROPS) or an International SIPP. Each option has its own criteria and considerations.

Offshore pensions do not offer guaranteed tax advantages. Any potential benefits depend on personal tax residency, local laws, and double tax treaty arrangements.

Some expatriates consider international pension structures for reasons such as:

• Currency alignment
• Potentially more appropriate tax arrangements depending on jurisdiction
• Broader investment choice
• Estate planning considerations
• Consolidation of multiple pensions
• Flexibility to support overseas retirement income planning

Benefits vary significantly by jurisdiction, personal tax position, residency rules, and scheme structure. Professional regulated advice is essential before taking action.

Step 1: Assess your situation and eligibility

Consider:

• Your residency status and whether you expect to return to the UK
• The type of pension you hold
• Possible tax implications, including overseas transfer charges
• Your long term retirement plans

Not all pension schemes allow or recommend transfers to offshore structures, and many UK defined benefit (DB) schemes consider transfers irreversible and high risk.

Step 2: Seek regulated financial advice

A regulated adviser can help assess whether a transfer may be appropriate. FCA rules require advice if you hold a UK defined benefit pension valued above £30,000.

A qualified international adviser can examine suitability, highlight local tax considerations, and explain the relative merits and risks of each available structure.

Step 3: Choose the right transfer option

Option 1: QROPS (Qualifying Recognised Overseas Pension Scheme)

A QROPS is a pension scheme that meets HMRC conditions for overseas transfers. It may offer multi currency flexibility and certain jurisdiction specific features depending on the country of residence.

Important considerations:

• A 25% Overseas Transfer Charge (OTC) may apply if your residency does not align with the scheme jurisdiction.
• Transfers to non recognised schemes can trigger unauthorised payment charges of up to 55%.
• HMRC requires ten years of reporting on payments and withdrawals after leaving the UK.
• HMRC anti avoidance rules apply and can override local tax treatment.

A full Transfer Value Analysis (TVAS) or an equivalent suitability assessment is required before any pension transfer decision.

Option 2: International SIPP

An International SIPP is a UK regulated structure designed for individuals living abroad who wish to retain FCA oversight. It may be suitable for those who expect to move countries or potentially return to the UK.

Step 4: Select your receiving scheme

After choosing your transfer route, the next step is selecting a suitable provider. Not all schemes are
created equal. Differences in fees, investment choice, service, and jurisdiction can significantly affect
your long-term returns.

Key factors to review:

• Regulatory status of the receiving scheme and its jurisdiction
• Fees (setup, management, and transaction costs)
• Investment platform and available asset classes
• Service reputation and reporting transparency

Hoxton Wealth partners only with trusted, regulated pension administrators who meet strict compliance and client service standards.

Step 5: Request a transfer value

Your UK pension provider will issue a Cash Equivalent Transfer Value (CETV). This sets out the value available if you proceed with a transfer. Providers typically issue CETVs within three months of a request.

Step 6: Submit transfer paperwork

This usually includes transfer forms, identity and residency documents, and confirmation from the receiving scheme. Once complete, transfers frequently take between four and twelve weeks, although timing varies.

Step 7: Monitor completion and confirm setup

After completion, review fund allocation, fee schedules, investment arrangements, and any currency related features. Ongoing monitoring is important because tax rules, markets, and personal circumstances can change over time.

• Confirm that any overseas scheme is appropriately regulated and, if relevant, HMRC recognised
• Review double tax treaty arrangements
• Consider currency management early in the process
• Understand all fees before transferring
• Assess long term flexibility in case of future relocations or changes in circumstances

Transferring your UK pension while living overseas is often a significant financial decision. When managed appropriately, a transfer may offer flexibility and alignment with your plans. However, a poorly considered approach may create unnecessary costs or the loss of certain UK protections.

Regulated advice plays an important role in helping assess whether a transfer is suitable or whether retaining your pension in the UK might be more appropriate.

If you are considering your pension options as a UK expat, speak with a regulated adviser to understand which structure, if any, may be appropriate for your circumstances.

This article is for information only and does not constitute personal financial advice.

Offshore pension planning depends on your individual circumstances, residency status, and local regulations. Hoxton Wealth does not provide tax or legal advice.

Tax treatment depends on personal circumstances and may change. Recommendations are provided only by the appropriately regulated Hoxton Group entity, depending on the client’s location at the time of advice.

The value of investments can fall as well as rise, and you may get back less than you invested. Overseas pension transfers can involve additional tax charges and the loss of certain UK protections.

Always obtain regulated advice before acting on pension information.