UK Pension Abroad
Your UK pension doesn't disappear when you leave — but where you take it determines how much of it you actually keep.
The UK pension system has three layers: state pension, workplace pension, and personal pension. All three are payable abroad. But "payable" and "optimal" are different things. Your state pension may be frozen. Your workplace pension may be taxed differently. And transferring via QROPS may cost you 25% upfront. This page covers the full picture.
State pension: the frozen pension trap
UK state pension is payable worldwide — but annual uprating (the triple lock) only applies in certain countries.
✅ Uprated (increases annually)
- EU/EEA countries (all 27 + Iceland, Norway, Liechtenstein)
- Switzerland
- USA
- Countries with bilateral agreements (Turkey, Israel, Jamaica, etc.)
🚫 Frozen (locked at departure rate)
- Australia
- Canada
- New Zealand
- South Africa
- Most Commonwealth countries
Over a 25-year retirement, the difference between frozen and uprated pension can exceed £80,000.
QROPS: Qualifying Recognised Overseas Pension Scheme
QROPS lets you transfer UK pension funds to a qualifying scheme abroad. The benefits can include: local currency denomination, local tax treatment, and estate planning advantages. The risks include: 25% OTC, loss of UK tax-free lump sum rights, and transfer costs.
The 25% overseas transfer charge
HMRC charges 25% on transfers to QROPS that aren't in the same country where you're tax-resident, or in the EEA. Post-Brexit, the UK is outside the EEA — so transfers from UK schemes to EU QROPS by UK residents trigger the OTC. Transfers by people already tax-resident in the EU country may be exempt. The rules are complicated and the amounts at stake are large. This is not a DIY decision.
❓ Common Questions
Is my UK state pension paid abroad?▾
Yes. The UK state pension is payable in any country. However, annual uprating (triple lock increases) only applies in countries with a bilateral social security agreement or in the EU/EEA. In countries like Australia, Canada, and New Zealand, your pension is frozen at the rate when you leave. This can cost tens of thousands over a retirement.
What is the 25% overseas transfer charge?▾
When you transfer a UK pension to a QROPS outside the UK, HMRC may charge a 25% OTC (overseas transfer charge) if the receiving scheme is not in the same country where you're tax-resident, or in the EEA. Post-Brexit, transfers to EU schemes by UK residents may attract the OTC since the UK is no longer in the EEA. Get specialist advice — the rules are complex and the stakes are high.
Should I transfer my pension via QROPS?▾
It depends on your destination, pension size, and tax situation. QROPS can be beneficial for: avoiding UK income tax on drawdowns, consolidating into the local currency, and estate planning. But the 25% OTC, loss of UK tax-free lump sum, and transfer costs can outweigh the benefits. For pensions under £100k, the costs often don't justify it. For larger pensions, a specialist IFA is essential.
What happens to my workplace pension?▾
Defined Contribution (DC) pensions remain in the UK scheme — you can draw them from abroad via bank transfer. No tax is withheld if you register non-resident status with HMRC and the DTA allocates taxing rights to your residence country. Defined Benefit (DB) pensions pay a fixed amount — also payable abroad. DB pensions can be transferred to QROPS but this means giving up the guaranteed income, which is rarely advisable.
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