What To Do With Dormant UK Pensions After Moving Overseas
This article is intended for British expats who hold UK pension pots. In this article, we will explain what a dormant pension is, how to locate any dormant UK pensions as well as your best options as a non-UK resident.
What Is A Dormant UK Pension?
A dormant or “frozen” UK pension is a pension pot that is no longer being contributed to but still holds value and remains invested, meaning its value can still go up or down over time.Even if contributions stop, the money within the scheme still belongs to the policyholder and can be accessed at retirement age.
If you are a UK expat living abroad, you may find yourself in this situation, especially with dormant or frozen workplace pensions schemes which you stopped topping up when leaving a past job. In fact, since most people change jobs multiple times throughout their career, it is not uncommon for individuals to have several dormant pensions—some of which may go unnoticed.
Managing multiple pensions can be difficult, and forgotten pots could mean missed income in retirement. That’s why it’s important to track down any dormant pensions you may have and take action. Our guide explores why reviewing your dormant pensions is essential and highlights your options for managing your UK pensions effectively as an expat.
Dormant Pensions Abroad
When British expats leave the UK, it's common to have multiple pensions with various providers - often with little awareness of their current value, how they’re invested, or when and how they may be accessed. This lack of visibility can make retirement planning confusing and inefficient.
If you have a case like this, it may be wise to consider pension consolidation. By combining your pensions into a single, well-managed plan, you can simplify your finances, potentially reduce fees, and improve investment performance.
This is even more important for expats living in countries like Canada, Australia, or New Zealand, where UK state pensions are typically frozen at the rate they were when you left the UK, meaning they won't increase with inflation or the cost of living.
It’s important to seek advice from a cross-border specialist to determine how your pensions may be affected in your new country of residence.
How To Locate A Dormant UK Pension
If you suspect that you may have a dormant UK pension, or if you’ve worked multiple jobs throughout your career, it’s worth checking whether you have a pension pot you’ve forgotten about.
Dormant or frozen pensions often get forgotten about, especially if you stopped receiving statements after changing jobs or moving house. To find out, you can reach out to the HR departments of your previous employers for details about any workplace pensions you may have had.
Alternatively, the UK Government offers a free pension tracing service which can help you locate old pension schemes and take the first step toward reclaiming your pension savings.
UK Pension Options Overseas
If you do uncover a dormant pension pot, there are several options to consider depending on where you are resident.
One option is to leave your pension with the existing pension provider—this is particularly advisable for final salary (defined benefit) schemes, which often include benefits such as a guaranteed lifetime income or dependent and spousal benefits. These types of pensions are based on years of service rather than investment performance, and transferring them could mean losing some of those built-in advantages.
However, for many expats, consolidating multiple pension pots into one streamlined, efficient scheme is a more efficient and advantageous route. Pension consolidation can make your retirement savings easier to manage, help reduce administrative hassle, and cut down on unnecessary fees.
Additionally, consolidating your pensions could mean access to better investment options and potential returns - ultimately helping your retirement funds go further.
To learn more about the benefits of pension consolidation, read our dedicated guide here.
Expat Pension Management
By working with a local cross-border financial specialist, you can get clear on your financial goals and create a tailored plan to achieve them. A specialist adviser will help you identify the most suitable pension scheme based on your unique circumstances, ensuring your investments are aligned with your long-term objectives.
With expert guidance, you can implement a personalised investment strategy designed to maximise the value of your pension, protect and grow your wealth, and ultimately build a financially secure and comfortable retirement, no matter where in the world you choose to live.
Working With The Wealth Genesis
At The Wealth Genesis, we specialise in helping expats around the world navigate their financial planning needs, with a strong focus on cross-border pension management.
