emigrating uk pension

Emigrating ~ What Happens To My UK Pension?

2012 has now officially been recognised as the wettest year since records began. It’s no wonder then that many people approaching retirement are considering a move abroad hoping to enjoy warm evenings, good food and sea views with the stress of work being a thing of the past. To make this dream a reality you need to know where you stand with your finances, especially what will happen with your UK pension which you’ve been contributing to for the majority of your working life.

Will You Still Be Entitled To Your UK pension If You Emigrate?

The good news is that you’ll still be entitled to receive your UK pension if you do decide to emigrate. How much you will receive may differ slightly depending on where you move to. If you move to a country that lies within the EEA (European Economic Area) you will receive your full pension entitlement plus any yearly increases due. If you move outside the EEA you will likely not be entitled to receive your yearly pension increases, unless the country you’re moving to has a specific agreement in place with the UK to allow you to still receive these increases.

Should I Take My Pension With Me?

For tax purposes it can sometimes be wise to transfer your UK pension over to the country you’re emigrating to, especially if you’re planning on withdrawing a lump sum in future. Different countries have different rules regarding the amount of your pension you can withdraw as a lump sum. Australia for example will allow you to withdraw 100% of your pension as a tax free lump sum, here in the UK its 25%, that’s a big difference. If you do plan to move your UK pension over to another country, it’s worth getting expert advice as you’ll need to move it to a ‘Qualifying Recognised Overseas Pension Scheme’ or QROPS.

Be Sure Of The Value Of Your Pension

If you’re going to be reliant on your UK pension as a large percentage of your income in retirement, it’s vital that you get a pension forecast before you make the move. This might sound like an obvious thing to do but it’s surprising how many people move abroad assuming they have more in the pension pot than they actually do.

Inform HMRC

The most important thing you can do when emigrating is to let the government know you’ve gone. The sooner you let HMRC know you’ve moved, the sooner they can make any necessary changes to the details of your pension.

This article is here to reassure you that you can still gain access to your UK pension if you decide to move abroad. There is a wealth of information on the Internet to help you understand the financial implications of emigrating, so keep searching the web and be sure to research the specific pension arrangements of the country you plan to move to. When it comes to something as important as your pension though, I’d always recommend getting some professional advice.

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4 Responses to Emigrating ~ What Happens To My UK Pension?

  1. This is something that not many people think about until AFTER they’ve made their decision. Great post. Nobody wants to unknowingly lose a bunch of cash, and a pension isn’t something that usually is integrated in the decision making process.

  2. I haven’t moved my pension from the UK to Canada but I’m still looking into it. I’m one of those people that said, I’ll look into it. I probably should have done more research before moving. Thanks for the reminder. Mr.CBB
    Canadian Budget Binder recently posted..Get Out of Debt First, Then Focus on SavingMy Profile

  3. Matt says:

    That’s very interesting. Moving to Australia looks like a good move then, as I’m pretty sure decent investments would return a much better rate than a lot of the annuities currently on offer in the UK.
    But what about the tax situation? If you get tax relief on your UK pension plan, which the government gets back by taxing your pension when you draw it, what happens to the tax situation when you move abroad? Do they reclaim any of it??
    Matt recently posted..New Year’s Resolution – Getting FitterMy Profile

    • Hi Matt, the tax implications of schemes like these change regularly so I wouldn’t feel right advising anyone on that. As mentioned in the post I’d recommend speaking to a qualified advisor to check the current rules before making a move, better to be safe than sorry. Thanks for the comment!

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