UK Pension Advice For Expats | A Clear, Practical Guide For Success
Moving overseas is a big life decision, and for many British expats it comes with freedom, opportunity, and a better lifestyle. But one area that’s often misunderstood, and frequently neglected, is pension planning.
If you’ve left the UK and still have pensions there, you’re not alone. Millions of British expats are in exactly the same position. The good news is that you usually don’t need to do anything straight away. The more important decisions tend to arise later, when you’re approaching retirement or planning how to take your benefits.
This guide explains, in plain English, how UK pensions work once you’ve moved abroad, what’s changed post-Brexit, why QROPS are often not ideal, and why an international SIPP (self-invested personal pension) is, in most cases, the standout solution.
What Happens to Your UK Pension When You Leave the UK?
In most cases, nothing needs to change immediately.
Your pension:
Stays invested with your existing UK provider
Remains exactly where it is
Continues to grow (or fall) in line with the underlying investments
You don’t lose your pension just because you’ve left the UK. It remains your asset, protected by UK regulation.
The real issues usually begin at or near retirement, when you want to:
Start taking income
Access lump sums
Change investments
Plan your drawdown strategy
Understand the tax position in your new country of residence
The Post-Brexit Problem: Why Many UK Providers Now Fall Short
Since Brexit, regulatory permissions have changed. Many major UK pension firms—such as Aviva, Standard Life, Scottish Widows, and others no longer have the licensing to offer full services to non-UK residents.
This can create practical problems, including:
Restrictions on changing investments
Limited drawdown flexibility
Difficulties paying income to overseas bank accounts
Confusion around tax treatment
Slow or inconsistent administration
This is becoming increasingly common for British expats and is one of the main reasons people start exploring alternative pension structures.
QROPS: Why They’re Often Not the Best Solution
In the past, many expats used something called a QROPS (Qualifying Recognised Overseas Pension Scheme).
A QROPS involves transferring your UK pension into an overseas scheme—typically based in places like:
Malta
Gibraltar
Guernsey
While QROPS do offer some additional flexibility, they come with serious downsides:
1. Higher Costs
Trustee fees are often high
Management fees are typically higher than UK-based pensions
These ongoing costs drag on long-term performance
2. Loss of UK Protection
Your pension leaves the UK
You lose the protection of the UK regulatory system
You are no longer covered by the Financial Services Compensation Scheme (FSCS)
3. Jurisdictional Risk
You are exposed to changes in foreign regulations
Political or regulatory shifts in the hosting country can affect your pension
4. Limited Overall Benefit in Most Cases
In our experience, around 90% of scenarios do not justify a QROPS transfer. The costs, risks, and complexity usually outweigh the advantages.
The Standout Solution: The International SIPP For Expats
For most British expats, the most practical, cost-effective, and low-risk solution is an international SIPP.
Let’s demystify what that actually means.
1. It’s Still a UK Pension
An international SIPP is:
Still based in the UK
FCA regulated
Fully covered by the FSCS
Governed by UK pension rules
Your money never leaves the UK.
The key difference is that it is specifically designed for non-UK residents.
What Makes an International SIPP Different?
An international SIPP restores the flexibility that many expats lose with traditional UK pension providers.
Here’s what it allows you to do:
2. Ongoing Investment Management
You can:
Change the underlying investments
Rebalance your portfolio
Work with a regulated advisor to manage your strategy
This is critical for long-term performance and risk control.
3. Full Drawdown Flexibility
Once you reach retirement age, you can take your benefits in a flexible way:
Regular income (e.g. a few thousand pounds per quarter)
Ad-hoc lump sums
A mix of both
There is no rigid structure. You decide how and when you access your money.
4. 25% Pension Commencement Lump Sum
You still retain the standard UK benefit:
25% tax-free pension commencement lump sum
Can be paid into any international bank account in your name
5. Payments Made Gross Using an NT Tax Code
This is one of the most powerful features.
You can apply for an NT (nil tax) code for your international SIPP. Important points:
The NT code is applied to the pension account, not the individual
Once in place, all pension withdrawals are paid gross
No UK tax is deducted at source
This simplifies your life significantly. There’s no need to:
Reclaim tax from HMRC
Rely on double taxation agreements
Deal with complex paperwork
How the Tax Works in Practice
Even though your pension is paid gross, it must still be declared in your country of residence.
The income is simply added to your local tax return and taxed at your marginal income tax rate.
Example:
If you live in the US and:
Earn $100,000 from employment
Withdraw $100,000 (or sterling equivalent) from your international SIPP
Your total taxable income for the year becomes $200,000. Your pension income is not taxed in the UK, but it is taxed locally.
Why Keeping Your Pension in the UK Matters
For many clients, this is the deciding factor.
An international SIPP keeps your pension:
In a highly regulated jurisdiction
Protected by UK legislation
Covered by the FSCS
Away from offshore political and regulatory risk
This provides long-term peace of mind—especially when you’re relying on that money for retirement income.
Choosing the Right International SIPP Provider
There are dozens of international SIPP providers in the market. Not all are created equal.
At The Wealth Genesis, we select providers based on three core criteria:
1. Cost
Lower costs mean better long-term outcomes. Excessive fees compound negatively over time.
2. Administration Quality
We look at:
How quickly they process income payments
How efficiently they handle client queries
How smooth their transfer processes are
Poor administration causes stress—especially when you’re relying on pension income to live on.
3. User Experience
We prioritise providers that offer:
A strong online login
Clear performance reporting
Transparent charges
Easy access to transaction history
You should be able to see exactly what’s happening with your pension at any time, from anywhere in the world.
How The Wealth Genesis Works
We are fully independent and operate on a transparent, no-nonsense fee structure.
Pension Transfer Fee
£3,000 one-off flat fee
Applies to any UK pension transfer
Same fee whether your pension is £100,000 or £1 million
Ongoing Management Fee
0.85% per annum
Industry-leading and lower than many competitors
Covers ongoing advice and portfolio management
We do not take commissions. Our advice is not influenced by product providers.
Everything Is Bespoke
There is no one-size-fits-all solution.
On your initial discovery call, we will:
Understand your goals
Review your pensions
Assess your income, outgoings, assets, and liabilities
Build a long-term cash flow model
Design a draw-down strategy that avoids future shortfalls
Investment Approach
Cautious investors:
A diversified blend of fixed interest, commodities, and equities for stability and incomeGrowth-focused investors:
A higher weighting toward international equities, technology, and growth assets
Every portfolio is tailored to your risk tolerance and long-term objectives.
Final Thoughts
If you’re a British expat with pensions still in the UK, doing nothing may be fine—for now.
But as retirement approaches, relying on outdated pension structures and post-Brexit-restricted providers can seriously limit your options.
For most non-UK residents, an international SIPP offers:
Full flexibility
Gross pension payments
Ongoing investment control
UK regulatory protection
A clear, simple tax position
It’s the most balanced, low-risk, and cost-effective solution in the majority of cases.
Speak to an Expert About Your UK Pension
If you want to understand how your UK pensions will work overseas—and how to structure them properly for retirement, you can book an initial discovery call with our expert team.
We’ll help you:
Assess your current pensions
Decide whether an international SIPP is suitable
Build a long-term retirement plan
Design a tax-efficient draw-down strategy
