The overseas transfer charge that can apply when moving a UK pension to a QROPS — and since 30 October 2024, transfers to EEA and Gibraltar schemes are no longer excluded (GOV.UK, Autumn Budget 2024).
Can You Take Your State Pension Abroad?
Yes — you can claim and receive the UK State Pension in any country. The catch is annual uprating. Per GOV.UK, your State Pension only rises each year if you live in the EEA, Gibraltar, Switzerland, or a country with a social security agreement that provides for increases — and GOV.UK specifically notes that increases are not paid in Canada or New Zealand despite their agreements. Australia is also absent from GOV.UK's list of uprating countries.
Frozen Pensions: What It Actually Means
Outside the uprating countries your pension is frozen at the rate first payable when you moved (or first claimed abroad). Inflation then erodes it year after year — retirees in Australia, Canada and New Zealand are the largest affected groups. Two features of the rules are worth knowing, both from GOV.UK:
- If you return to live in the UK, your pension goes back up to the current standard rate — but the missed increases are not backdated
- The freeze depends on where you live, not your nationality: moving from a frozen country to an uprating country changes your position
| Where you retire | State Pension uprating? |
|---|---|
| EEA countries, Gibraltar, Switzerland | Yes — increases paid each year |
| Countries with qualifying social security agreements (e.g. USA) | Yes, where the agreement provides for increases |
| Canada, New Zealand | No — agreements exist but do not cover uprating (GOV.UK) |
| Australia and most other countries | No — pension frozen at the initial rate |
Workplace and Private Pensions Abroad
Leaving the UK does not move your pension: a UK provider keeps paying it under PAYE, deducting tax through your code. National Insurance is not charged on pension income, so income tax is the whole story. If your new country has a double taxation agreement with the UK that gives it the taxing rights over pensions — most modern treaties do for ordinary private pensions — you can apply to HMRC for an NT ("no tax") code using the form DT-Individual, certified by your new tax authority, so your pension is paid gross and taxed only where you live. Some categories, such as certain government-service pensions, can remain taxable in the UK under the specific treaty — always check the agreement for your country.
Scale matters here. Pension withdrawals are taxed as income, and the personal allowance still tapers above £100,000: someone drawing £150,000 in a single year would face UK income tax of about £53,703 on 2025/26 rates (thresholds frozen to 2028) — with the whole allowance lost. Spreading withdrawals across years, or across the UK/overseas split, can change the bill dramatically. Six-figure retirees should read our £100k tax trap explainer before setting a drawdown plan.
QROPS: Transferring a Pension Overseas
A QROPS (qualifying recognised overseas pension scheme) is a foreign pension scheme that meets HMRC's conditions to receive transfers from UK pensions. The headline risk is the overseas transfer charge (OTC) of 25% of the transferred value. The rules tightened sharply at Autumn Budget 2024: per GOV.UK's overview of tax legislation and rates, from 30 October 2024 the exclusion for transfers to QROPS established in the EEA and Gibraltar was removed, closing off the common "transfer to Malta while living in the UK" route.
Exclusions from the 25% charge still exist — broadly where you are resident in the same country as the QROPS, or the scheme is an occupational, overseas public service or international organisation scheme connected to your employer. QROPS transfers are complex, irreversible decisions with heavy fees in parts of the market: this page is an overview, not a recommendation, and you should take regulated financial advice before transferring anything.
Double-tax treaties are your friend. The UK has one of the world's largest treaty networks. Before you retire abroad, check the pension article of the UK treaty with your destination — it usually determines whether you need an NT code, whether the State Pension is taxed there, and how lump sums are treated. HMRC lists treaties country by country on GOV.UK.
Planning Points Before You Go
- Check your uprating position against GOV.UK's country list — a frozen pension changes the destination arithmetic
- Voluntary NI: if you retire early abroad, voluntary contributions can protect your State Pension record (GOV.UK)
- Time large withdrawals: the 25% tax-free lump sum and the £100,000 allowance taper interact badly with one-off big drawdowns
- Confirm residence dates: split-year treatment (see our moving abroad guide) decides which country taxes the income around your move
For perspective: the full UK median full-time salary is £39,039 (ONS, April 2025), and a UK-resident worker on it keeps roughly £31,628. A retiree drawing the same £39,039 from a pension pays income tax but no NI — and if an NT code applies, potentially no UK tax at all, with the bill moving to their new country instead.
Frequently Asked Questions
Does my State Pension increase if I retire abroad?
Only in some countries. GOV.UK confirms increases are paid in the EEA, Gibraltar, Switzerland and countries whose social security agreements cover uprating — but not in Canada or New Zealand, and not in Australia. Elsewhere your pension is frozen at the rate when you moved.
Will my UK pension be taxed twice if I live abroad?
Usually not, if you act. Where a double taxation agreement gives your new country the taxing rights, you can apply for an NT code (form DT-Individual) so UK providers pay you gross and you are taxed only where you live. Without it, UK PAYE continues and you reclaim under the treaty.
What is a QROPS and should I transfer to one?
A qualifying recognised overseas pension scheme — a foreign scheme HMRC recognises for UK pension transfers. Since 30 October 2024, transfers to EEA/Gibraltar schemes lost their exemption from the 25% overseas transfer charge (GOV.UK), so most transfers now only avoid the charge if you live in the same country as the scheme. Take regulated advice; transfers are usually irreversible.
Do I pay National Insurance on pension income?
No — NI is charged on earnings from work, not pensions. A retiree's UK deductions are income tax only, which also means pension income never suffers the 2% upper-rate NI that salaries do.
Related Guides
Keep reading with these related guides and articles:
- Tax When Moving Abroad — residence, P85 and split-year treatment
- UK Tax for Non-Residents — rent, allowances and NT codes once you've left
- Workplace Pensions Explained — how UK pensions are built up in the first place
- How Much Do You Need to Retire? — the target-pot arithmetic
- The £100k Tax Trap — why big drawdown years are punished
- High Earner Tax Tips — planning ideas for six-figure incomes
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