UK Pension Guide for Expats

Managing Your SIPP and Retirement Abroad (2025 Edition)

If you hold a UK pension and now live abroad, you've likely encountered unexpected challenges in managing what should be one of your most straightforward assets. This guide explains why these challenges occur, what risks they pose to your retirement planning, and the practical steps you can take to maintain control of your UK pension as a non-resident.

There are three elements to consider regarding holding foreign assets when living abroad: the first is where the assets are held and whatever restrictions or regulations may apply there, the second is where you are residing and what rules you must follow to satisfy the local requirements, and the third is the intermediary that you work with to modify or access your assets.

Quick Tip:

Before finalizing your relocation plans, contact your pension providers to understand their policies regarding non-UK resident account holders.

What Happens When You Move Abroad

When it comes to pensions, HMRC have no restrictions on anyone holding, making changes to, transferring or taking benefits from either their defined benefit or contribution plans back in the UK. Neither foreign governments nor the regulators have any problems with residents holding registered UK schemes as a foreign asset provided that they are reported in the correct manner where required.

The issue always lies with the intermediary and what their ability is to appropriately advise the holder of this type of asset and make the required filings on their behalf. This creates a situation where you still own yourUK pension, but your pension provider cannot legally help you manage it properly.

Restrictions on Foreign Assets

Under their license with the FCA, UK based providers are only permitted to offer advice to people that reside within the UK and, with most services today being considered as 'advice' in some form or other, are forced to place restrictions on any account that is held by a foreign resident.

! Common Restrictions Include: 

• Changes to any portfolio 

• Consolidation of multiple schemes 

• A drawdown plan from your plan 

• Access to online services and valuations

 Warning:

Recent data suggests that today, less than 30% of SIPP providers accept non-UK residents.Providers are rarely proactive in warning you of these restrictions, so problems tend to surface when you need action most.

Common Pain Points for Expatriates

UK pension holders living abroad face numerous challenges when managing their retirement accounts. Understanding these pain points is the first step toward finding effective solutions:

Risks of Inaction: What's at Stake

Without proper management, your UK pension faces several significant risks: 

Types of UK Pension

There are two primary types of UK Pensions:

Defined Contribution Schemes

Pension plans where the holder contributes to a plan (sometimes with matching contributions from an employer) that is then invested according to an investment profile to grow over time. These contributions are made in a tax efficient manner and are available to be drawn from once the holder reaches the legal retirement age.

Defined Benefit Scheme (Final Salary Pensions)

Set up by employers and typically offer one sixtieth of the leaver's final salary for each year of service.This figure is then paid out as an income at the legal retirement age. The majority of defined benefit schemes are underfunded with many at serious risk of falling into the Pension Protection Fund (where a considerable amount of their value can be lost) or disappearing completely in the event that the company can no longer sustain it.

To understand more on the risks and what your options are for your defined benefit plan, please refer to specialist guidance or speak to one of our advisors.

Practical Solutions for UK Pension Holders

Solutions for Transfer and Ongoing Management of Your Plan

International Self Invested Pension Plans

Like the typical UK defined contribution or personal pension plan, International Self Invested Pension Plans (or SIPPs) are still based in the UK and both licensed by the FCA and registered with the HMRC. However, they are administered by independent trustees with teams that have knowledge and experience in dealing with people that reside overseas.

Benefits of International SIPPs:

• Granting full access from the age of 55

• The ability to consolidate multiple plans into one

• Accept No Tax (NT) codes to avoid double taxation

• Pay monies to bank accounts in other countries

• Access to full market range at institutional rates

• Greater flexibility in accessing funds

Quick Tip:

In some cases, International SIPPs can even handle foreign reporting and filing of the asset on your behalf.

Qualified Recognised Overseas Pension Schemes (QROPS)

Unlike International SIPPs, Qualified Recognised Overseas Pension Schemes (QROPS) are plans that are registered abroad. In transferring to a QROPS, you are removing your pension from the UK and transferring it to a jurisdiction that the HMRC has recognised as suitable for you and your circumstances.

Key Considerations:

The HMRC's focus on QROPS is all about where the holder is residing and, at present, only allows transfers for people that either reside within the European Economic Area or in a country that is a recognised QROPS jurisdiction.

 Important Risks to Consider:

• Several countries, such as the United States, do not recognize a QROPS

• If a transfer is made to a QROPS when you are not residing in a recognised country, the tax (or fine) can be as high as 55% of the entire fund value

Step-by-Step Action Plan

Regardless of which approach you choose, these practical steps will help you take control of your UK pension:

Key Tax Considerations

Proper tax management is essential for UK pension holders living abroad: 

Double Taxation Agreements

The UK holds Double Taxation Agreements (DTAs) with many countries. These treaties generally give primary taxing rights to your country of residence but contain important nuances depending on the country you are residing in, the type of pension held and the distributions that you receive. 

Reporting Requirements

The country within which you reside may have ongoing reporting requirements which may start prior to receiving benefits. Ensure that you are aware of what these are and comply with them where necessary. 

Tax-Efficient Withdrawals

Coordinate your UK pension withdrawals with your overall retirement income strategy to optimize tax efficiency in both countries.

Quick Tip:

If you are taking advantage of a transfer to an International SIPP, be sure to obtain a NT Code (available through the HMRC) to eliminate taxation at source and avoid having to claim taxes back following each withdrawal.

Best Practices and Tips

Successfully managing your UK pension from abroad requires proactive planning and ongoing attention. Follow these best practices to maintain control of your financial future: 

Frequently Asked Questions:

Can I lose my UK pension by moving abroad?

No. Your entitlement to benefits from a UK pension scheme is not affected by your residence. What changes is how you can access and manage it.

Do I need to transfer my UK pension when moving abroad?

No, there is no requirement to transfer your pension.

Can I transfer my pension to the country I have moved to?

Only if you are looking to transfer it to a QROPS and reside within either the European Economic Area or an HMRC registered jurisdiction. Otherwise you risk being charged up to 55% for any other transfer which will be deemed as an 'unauthorised transfer'.

Will my UK State Pension be payable to me if I move?

Yes. The UK State Pension can be paid regardless of where you reside.

Can I contribute to my UK pension while living abroad?

Generally, tax-advantaged contributions to UK pensions are limited once you're no longer UK tax resident, though some exceptions exist for certain situations.

Can I access my UK pension before age 55?

Generally, no. UK pension.

© 2025 Loadstone Group.

This guide is for informational purposes only and should not be construed as financial advice.