Retiring abroad

Money Advice Service

Many people dream of retiring abroad or travelling long term. If you’re thinking of retiring abroad, it’s important to understand how your pensions might be affected.

Your State Pension

You can claim your State Pension if you live abroad, but Pension Credit – a benefit which tops up your weekly income, stops when you move overseas permanently.

When you move, you must let the International Pension Centre know (and the Northern Ireland Pension Centre if you’re from Northern Ireland).

You should also contact HMRC to ensure you pay the right amount of tax.

Your State Pension can be paid to a UK bank or building society account or to an overseas account in the local currency.

Just as in the UK, you can choose to defer your State Pension and get extra State Pension.

For information on how to claim your State Pension abroad, see:

To find out more about deferring your State Pension read our guide on the State Pension.

State Pension increases when you’re abroad

If you live in the UK, your State Pension usually rises each year.

But if you move overseas, you’re only entitled to an annual increase if you live in:

  • Gibraltar or Switzerland
  • The European Economic Area
  • A country that has a social security agreement with the UK

For a full list of countries where you’re entitled to an annual increase see GOV.UK.

Your workplace and personal pensions

Personal or workplace pensions can be paid to you wherever you live.

And you’ll be entitled to any built-in annual increases in the same way as if you were living in the UK.

Talk to your pension scheme or provider before you move.

Some only pay into a UK bank account but others might pay into an overseas one if you ask.

There might be extra charges to pay.

Bear in mind that your pension income will be paid in pound sterling.

That means it will be affected by fluctuations in exchange rates when you convert it to your local currency.

You need to be prepared for your income to rise and fall because of this.

If rates go against you, it can seriously affect how much you have to live on.

Moving before you take your pension income

If you move abroad before you start to take any pension income, you can:

  • Stop paying into your pension and access your money at a later date (from age 55 at the earliest).
  • Continue paying into your pension. But you might not qualify for tax relief on your contributions or the amount might be limited.

Once you decide to start taking money from your pension pot, you have the same options as you would if you were living in the UK.

However, the tax situation is more complicated if you’re abroad and this can affect which options are best for you.

For example, if you haven’t taken your tax-free cash lump sum from your pension before you move, you might be taxed on it as income in the country you live in.

We recommend you get financial advice from a tax and pensions specialist before making any decisions.

You also have the option, in some cases, of transferring your pension to an overseas scheme. Again, you should seek financial advice before doing this.

You can find FCA registered financial advisers who specialise in retirement planning in our Retirement adviser directory.

Read our guide to learn more on Your options for using your pension pot.

Tax and your pension income

If you live abroad you’re likely to be classed as a non-UK resident.

This means you don’t usually pay UK tax on your State Pension.

But you might pay tax in the country you live.

You might have to pay UK tax on your other pension income because it’s classed as UK income.

And you might also be taxed in the country you live in.

However, if you live in a country which has a double-taxation agreement with the UK, you won’t have to pay tax twice.

For more information on tax if you move abroad, see GOV.UK.

Returning to the UK

If you come back to the UK, you should tell the Pension Service (International Pension Centre or the Northern Ireland Pension Centre).

If your State Pension hasn’t been rising while you’ve been abroad and you remain in the UK for more than six months, it will be increased to the current rate and will start increasing again each year.

It’s also important to notify HMRC by calling the HMRC Residency helpline on 0300 200 3300 in the UK, or +44 151 210 2222 from outside the UK.

You should also notify any pension schemes you belong to.

Useful contacts

This article is provided by the Money Advice Service.

Some important information about Rest Less Money

We want you to understand the positives, but also the limitations of using our site. We operate in a journalistic manner and therefore all information, guidance or suggestions provided are intended to be general in nature, and you should not rely on any of the information on the site in connection with the making of any financial decision.

When we set out to build Rest Less Money, we wanted to be a trusted place where you could find helpful information about financial matters affecting the over 50s. As a free to use resource, we try hard to provide the best information we can, but we cannot guarantee that we won’t occasionally make mistakes. So please note that you use the information on our site at your own risk, and we can’t accept liability if things go wrong.

Key things to remember when using Rest Less Money:

We do not offer financial advice – As a journalistic site, it’s important to know that we do not provide financial advice. You should always do your own research before choosing any financial product so that you can be certain it is right for you and your specific circumstances. If you are in any doubt, please seek professional financial advice from a regulated financial advisor.

No Liability – please note that you use the information on Rest Less Money at your own risk and we can’t accept liability for how you choose to use the information given on our site. We will often provide links to content or products and services available on other third-party websites. These are provided purely for your convenience and we cannot be held responsible for any content, or any of the products and services offered on any website that we link to.

 

Accuracy of Information – We try to make sure that all the information provided on Rest Less Money is correct at the time of publishing as we want it to be the most helpful resource possible. Sadly, we are not perfect however, and so we can make no guarantees as to the completeness, accuracy, adequacy or suitability of the information available on the site.
Whilst we work hard to try and provide accurate information, deals and prices can change, so whilst they may be correct at the time of writing, providers may subsequently decide to alter them later – so always double check first.

A final note on the Rest Less Community Forums – always remember that anyone can post their opinion on the Rest Less Community Forums, so it can be very different from our own opinion and may not be factual or well researched. Always be wary of any content posted on the forums and be sure to do your own research and due diligence on anything suggested. 

We hope you find Rest Less Money a useful resource and we would welcome your feedback at [email protected] on how to make it even better. For more information on any of the above you can read our full terms and conditions.

Some important information about Rest Less Money

We want you to understand the positives, but also the limitations of using our site. We operate in a journalistic manner and therefore all information, guidance or suggestions provided are intended to be general in nature, and you should not rely on any of the information on the site in connection with the making of any financial decision.

When we set out to build Rest Less Money, we wanted to be a trusted place where you could find helpful information about financial matters affecting the over 50s. As a free to use resource, we try hard to provide the best information we can, but we cannot guarantee that we won’t occasionally make mistakes. So please note that you use the information on our site at your own risk, and we can’t accept liability if things go wrong.

Key things to remember when using Rest Less Money:

We do not offer financial advice – As a journalistic site, it’s important to know that we do not provide financial advice. You should always do your own research before choosing any financial product so that you can be certain it is right for you and your specific circumstances. If you are in any doubt, please seek professional financial advice from a regulated financial advisor.

No Liability – please note that you use the information on Rest Less Money at your own risk and we can’t accept liability for how you choose to use the information given on our site. We will often provide links to content or products and services available on other third-party websites. These are provided purely for your convenience and we cannot be held responsible for any content, or any of the products and services offered on any website that we link to.

 

Accuracy of Information – We try to make sure that all the information provided on Rest Less Money is correct at the time of publishing as we want it to be the most helpful resource possible. Sadly, we are not perfect however, and so we can make no guarantees as to the completeness, accuracy, adequacy or suitability of the information available on the site.
Whilst we work hard to try and provide accurate information, deals and prices can change, so whilst they may be correct at the time of writing, providers may subsequently decide to alter them later – so always double check first.

A final note on the Rest Less Community Forums – always remember that anyone can post their opinion on the Rest Less Community Forums, so it can be very different from our own opinion and may not be factual or well researched. Always be wary of any content posted on the forums and be sure to do your own research and due diligence on anything suggested. 

We hope you find Rest Less Money a useful resource and we would welcome your feedback at [email protected] on how to make it even better. For more information on any of the above you can read our full terms and conditions.

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on email

Join Rest Less Money Club

Helpful tips and guidance for making the most of your money – straight to your inbox

By providing us your email address you agree to receive emails and communications from us and acknowledge that your personal data will be used in accordance with our Privacy Policy and Terms and Conditions. You can unsubscribe at any time by following the link in our emails.

Join the Rest Less Money Club

Helpful tips and guidance for making the most of your money – straight to your inbox

Good luck with your application

Before you go, we’d love to stay in touch to find out how you get on. Sign up to Rest Less today to get free job alerts and inspiring content sent straight to your inbox.
By providing your email you agree to receive emails and communications from us and acknowledge that your personal data will be used in accordance with our Privacy Policy and Terms and Conditions. You can unsubscribe at any time through the link in our emails.