Last Updated on 3rd July 2025
Deciding how to manage your pension and retirement wealth following an overseas relocation is essential to achieving the retirement you have been working towards. Whether your retirement is imminent or you plan to work for a few years overseas, you need to know that your pensions and other funds are more than sufficient to cover your long-term living costs.
Although retirement and pension planning is always important, this becomes more involved for expatriates, who need to consider complexities like tax exposure, cross-border pension schemes, varied tax allowances and rates, and how best to handle other aspects like entitlement to the UK State Pension.
All this means that a retirement calculator, while a useful tool, is far from a standalone way to get an accurate picture of your financial position, with guidance and advice from an experienced expat retirement adviser vital to protecting your financial stability.
The Intricacies and Customised Nature of Expatriate Retirement Planning
Once you become a tax resident in another country or are established as a non-UK resident for tax purposes, the impacts on your finances can be considerable. This has a direct effect on your obligations, for example, to pay local tax rates on pension benefits, lump-sum drawdowns and any other investments or income sources built into your retirement portfolio.
As experienced wealth managers working with an international expatriate client base, we’d also advise that pure finances, in terms of the value of your pension funds and investments, is only part of the puzzle.
When we put together a personalised retirement strategy, we’re also looking at other elements such as:
- Risk management: Understanding the regulations or legislation in each jurisdiction, how they impact your pension wealth, and factoring in currency exchange risks to ensure you know how stable your projected pension income is.
- Tax efficiencies: Optimising your tax status is key, and ensures you understand visa categories, exemptions, allowances or tax reliefs that could all make a sizable difference to the tax burden linked to your pension income.
- Estate planning: Inheritance and succession taxes vary widely around the world, and you may need to think about restructuring assets or pensions if you intend to leave these or other parts of your wealth to beneficiaries, especially in countries with forced heirship rules.
Every expatriate will have a unique set of circumstances, expectations, budgets and plans. Building all of this into your retirement planning ensures you can be confident that your pension income will cover your requirements and help align your savings and investments with your financial goals and timelines.
Understanding Global Pension Transfer or Reinvestment Options
The next step in creating a future-proof retirement plan is to consider how to structure, transfer, or reinvest pension wealth, taking into account the tax liabilities, benefits, and flexibility that might be associated with each option.
Leaving your pension funds as-is within the UK is certainly an option, but it is not always advisable. It could leave you exposed to higher taxation than necessary, restrict your access to flexible pension drawdown features, or mean that currency fluctuations impact the real-world value of your pension benefits, either positively or negatively.
This level of uncertainty is undesirable in retirement when most clients want the assurance that their pension is tax-efficient, easily accessible, of a suitable value, and won’t rise and fall in line with inflation rates.
Recapping the Potential Expat Pension Transfer Routes
While the specific schemes, transfer options and investment structures we suggest will depend on numerous variables and the country in which you plan to retire or are already living, we’ll assess several factors when sharing recommendations:
- Defined benefit schemes are generally more valuable than other workplace or defined contribution funds, but that doesn’t always mean that your pension pot will deliver maximum returns if you have little control over how the funds are invested.
- Transferring a UK fund overseas to a Recognised Overseas Pension Scheme (ROPS) is widely seen as the most efficient option, but it can also expose you to a 25% Overseas Transfer Charge (OTC), which you might either time strategically to lower the tax liability or avoid with an alternative strategy.
- Reinvesting UK-based pensions into a Self-Invested Personal Pension (SIPP) is another solution. It has many of the advantages of an ROPS transfer but without the OTC burden, given that the fund is technically still situated within the UK.
Expatriate retirees might also decide that they’re happy with the currency fluctuations associated with receiving pension payments from a UK fund overseas. In this case, we’d recommend they assess the costs of transferring funds between international accounts and review the tax treatments of foreign-sourced pension incomes in their country of residence.
Some locations have highly attractive tax benefits or elective schemes, with a special tax status awarded to retirees. You may, therefore, be able to pay low flat-rate taxes on overseas pension incomes or be able to choose to have a foreign pension fund taxed according to the general income tax rates if this is preferable.
These decisions are never to be taken lightly, and having professional guidance is always recommended to ensure you are aware of all the applicable pros and cons and make informed judgements about the right options for you and your family.
Navigating a Changing Tax Landscape as an Expatriate Approaching Retirement
Finally, we’d point to the ever-evolving taxation rules that apply to retirement incomes, which means a quick retirement calculation performed today might have little relevance when the time comes to retire, or might change significantly following a relocation.
Currently, UK citizens who relocate and are entitled to the State Pension continue to access payments. Still, these might either increase annually in line with the ‘triple lock’ or remain static at the rate paid at the point of relocation, which all depends on the destination.
Similarly, recent reforms to the OTC have had a dramatic impact on many expatriate retirement plans. A previously tax-efficient transfer could now be less appealing than alternatives that carry a much lower tax burden.
Factoring in tax exposure, estate planning, retirement wealth, real-terms pension values and how this all links into your plans is crucial, working with experienced pension advisers who gain a holistic overview of your financial position to ensure each decision you make is in your best interests.
If you’d like more information about creating a stable pension plan or to discuss any of the points raised here, you are welcome to contact your closest Chase Buchanan Private Wealth Management team at your convenience. We’d also highlight our earlier guide to Planning for Retirement in Europe, which showcases some of the key contrasts between retirement plans as a UK resident and as an overseas expatriate.
All investments carry risk, including the potential loss of capital. You should carefully consider whether investing is suitable for you, taking into account your personal circumstances, financial situation, and risk tolerance.
*Information correct as at July 2025
