Can Tax Relief be Claimed on UK Pension for Expats
Tax is due on UK income regardless of whether an individual is a UK resident or non-UK resident. This includes income from wages, rental property, savings interest, and pensions.

A UK pension provider will, therefore, tax and report any pension income for an overseas resident under normal UK rules. Initially, this means that income will be taxed using the emergency tax code (currently 1257L) on a Week 1/ Month 1 basis (unless a P45 is provided).
Detailed information about the UK pension for expats can be found in the CWG2 guide to PAYE and NIC.
Can I get my UK pension living abroad?
The UK pension living abroad (personal or workplace) can be paid to you wherever you live. You’ll be entitled to any built-in annual increases in the same way you would be if you were living in the UK.
If you’re thinking of moving abroad, make sure you talk to your pension scheme or provider before you move. Some providers might only be able to pay into a UK bank account.
Other providers might pay into an overseas bank account if you ask. Be aware that there might be extra charges to pay.
Bear in mind that your pension income will be paid in pounds. This 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.
Do I pay tax on my UK pension if I live or move abroad?
If you live abroad, you’ll be involved in non-resident tax, and it can be complex depending on your situation.
You might have to pay UK tax on your pension income. This is because it’s classed as UK income. You might also have to pay tax on it in the country you live in.
If it has a double-taxation agreement with the UK, you may be able to apply for tax relief or a refund.
Find out more about non-resident tax UK at GOV.UK.
Moving before you begin taking income from your pension
If you move abroad before you start to take any pension income, you have two options:
- Stop paying into your pension and take your money at a later date – from age 55 at the earliest (this is due to change to 57 in 2028).
- Continue paying into your pension. But be aware that the amount of tax relief on your contributions might be limited.
If your pension provider doesn’t offer the payment option you want
Some pension providers won’t allow an overseas resident to set up a new policy. This could limit your ability to shop around.
Transferring pensions when moving abroad
It might be possible to transfer the UK pension for expats to a pension arrangement overseas if the pension plan is a Qualifying Recognised Overseas Pension Scheme (QROPS). To qualify as a QROPS, certain conditions must be met.
Can I save money on a UK pension plan if I live abroad?
You can live abroad and save in a UK pension scheme. But there are limits to the tax relief you can claim on your contributions.
Living abroad or working for an employer who is based overseas means tax relief on contributions might be limited – or not available at all.
Do you qualify for tax relief?
Tax relief on your contributions is limited to whichever of these amounts is higher:
- your relevant UK earnings chargeable to UK income tax for that tax year or
- the basic amount of £3,600 where relief at source is provided.
The total amount of tax relief you can benefit from is also limited by the annual allowance. Your annual allowance is the most you can save in your pension pots in a tax year (6 April to 5 April) before you have to pay a tax charge.
To get tax relief on your contributions, you must have been a relevant UK individual for that tax year. You are a UK-relevant individual if:
- You have relevant UK earnings chargeable to UK income tax for that tax year
- You are a resident of the UK or
- You were resident in the UK in one of the previous five tax years and, at the time you were resident, you became a member of a UK registered pension scheme or
- You’re a Crown Servant – or a spouse/civil partner of a Crown Servant – and your earnings are subject to UK tax.
What happens to my UK state pension if I move abroad?
As long as you’ve paid enough National Insurance contributions, you can access your UK state pension in another country. In order to do so, you need to either contact the International Pension Centre or send them an international claim form.
Your pension will then either be paid into a UK bank or a bank in the country you’re living in. If you choose the latter, you’ll then get paid in that country’s local currency. This means that you might not get the same amount of money each month due to currency fluctuations.
Does my UK state pension increase if I live overseas?
We’ve come to the big question - does my UK state pension increase if I live abroad? The answer depends on where you plan on moving to.
The UK pension for expats will increase each year if you move to the EEA, Gibraltar, Switzerland, or certain countries that have a social security agreement with the UK.
For a full list of countries where you’re entitled to an annual increase, visit GOV.UK.
Countries without pension increases
Your UK state pension will be frozen if you move to any country other than those listed above link. Remember that although Canada and New Zealand have social security agreements with the UK, you can’t get a yearly increase in your UK state pension there.
Returning to the UK
If you return to the UK, you need to notify the International Pension Centre; their contact details are at GOV.UK.
If you’re from Northern Ireland, you need to notify the Northern Ireland Pension Centre; their contact details are indirect.
You also need to contact HMRC to make sure you pay the right amount of tax. Their contact details are at GOV.UK.
Bottomline
If you decide to retire abroad, you can still receive your UK state pension. In fact, there’s a lengthy list of countries where your pension will continue to increase each year.
FAQs
1. Do expats pay tax on UK pensions?
The UK pension for expats can be taxed by the UK and the country where you live. If you pay tax twice, you can usually claim tax relief to get all or some of it back. If the country you live in has a 'double taxation agreement' with the UK, you'll only pay tax on your pension once.
2. Can I get my pension contributions back if I leave the UK?
Suppose you worked at your job for less than 2 years before you left. If you were in a defined benefit pension scheme for less than 2 years, you might be able to get a refund for what you contributed. Transfer the value of its benefits to another scheme (a 'cash sum transfer').
3. Which countries freeze the UK pension for expats?
Most British Commonwealth countries are on the frozen list, including Australia, Canada, South Africa, New Zealand, and India, as well as British Overseas Territories such as the Falkland Islands. Thailand is also on the list.
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