Last Updated on 24th September 2025
Expats deciding how best to manage their pension wealth often contrast self-invested personal pensions, or SIPPs, and Recognised Overseas Pension Schemes (ROPS), both of which are potential ways to relocate a pension fund, either within the UK or to another country.
While both solutions may be viable, pension transfers can be complex. It is always advisable to speak with an experienced, independent adviser with full knowledge of the costs, taxation implications and long-term impacts, given the importance of protecting your retirement assets for the future.
We’ve created some clear and easy-to-follow comparisons to clarify the differences and help you judge which pension transfer option may be most suitable for you and your relocation plans.
SIPP vs ROPS Pension Transfers: Costs and Taxation Considerations
For many expats, the primary concerns when deciding whether and how to transfer a pension fund relate to the costs involved, and the routes that will ensure they’re not paying more tax than necessary, both on the transfer transaction itself and on onward pension drawdowns or benefits.
We’ve summarised the key contrasts below, while noting that it’s best to review these options alongside your lifestyle plans, since our recommendations may differ if you plan to retire imminently, want to preserve wealth for your family, or have several years until your intended retirement date.
| Self-Invested Personal Pensions – SIPPs | Recognised Overseas Pension Schemes – ROPS | |
| Flexibility | Income, including lump sums, can be drawn from age 55, with limitations depending on whether the fund is a UK or international SIPP | Option to withdraw tax-free lump sums without the limitations or caps applied against UK-based funds |
| Transfer Taxation | No transfer tax if the fund is transferred to a UK-based SIPP, although this may apply to some international transfers | Exposure to the 25% Overseas Transfer Charge when transferring a UK pension abroad to a country where you are not also a resident |
| Accessibility | Ideal for expats who may have further plans to relocate, with access either from an overseas location or on returning to the UK | Easily accessible when transferring to a ROPS in your country of residence, or an alternative EU country for expats in Europe |
| Tax-Free Lump Sum Drawdowns | Up to 25% from age 55 within the UK or 30% elsewhere | Up to 30% from age 55 |
| Customisation | SIPPs can be structured around your wishes/priorities/risk appetite | Depends on the available HMRC-approved ROPS in your country of residence |
Comparing the Benefits of ROPS and SIPPs
Many of the positive aspects of transferring a pension fund to a SIPP or ROPS relate to greater freedoms to pick and choose when you access your savings. Still, as with the costs and taxation elements we’ve explored, these will depend on factors like whether you are an overseas tax resident.
It is also important to review the ways in which pension incomes are taxed in your place of residence or the country you plan to retire to, since this may influence your choices, or mean one method of transfer is more tax-friendly than another.
| Self-Invested Personal Pensions – SIPPs | Recognised Overseas Pension Schemes – ROPS |
| Can be UK or international, with the flexibility to select a pension structure that is most tax-efficient and accessible, depending on your plans | Long-term protection from UK tax reforms, including the potential reintroduction of the Lifetime Allowance (LTA) |
| Available to any expat at any stage of their relocation – expats do not need to already live outside of the UK to open a SIPP | Pension income is normally taxable in your place of residence, assuming you are a tax resident, with numerous countries that offer beneficial tax rates or allowances for retirees |
| Varied options to invest in diversified assets and funds, including real estate, and take loans from the fund if required | Ability to draw pension funds in the same currency as in your host country, without exposure to exchange rate fluctuations |
| Higher lump sum drawdowns are available, although with a tax liability, ensuring holders can use and draw from their pension as they wish | Safeguards pension wealth from UK inheritance tax, provided expats have been overseas tax residents for 10 years or more |
Risks and Potential Pitfalls to Be Conscious of When Deciding Between a SIPP or ROPS Pension Transfer
Pension funds are normally seen as safe and stable, but as with any investment, there is the potential for your fund to grow at a slower rate than anticipated, or for medium and higher-risk underlying assets to fall in value.
The potential downsides we’ve listed below will affect some expats more than others or may not be applicable depending on your circumstances.
| Self-Invested Personal Pensions – SIPPs | Recognised Overseas Pension Schemes – ROPS |
| UK-based SIPPs have capped contributions equivalent to those applicable to all UK pensions | Ongoing obligations to report to HMRC for the first 10 years following a pension transfer |
| Taxation on UK-based SIPPs is unchanged, although this may depend on the tax residency status of the fund holder | Less suitable for expats planning to return to the UK or who prefer to have this option |
| No ability to transfer the fund after age 75 without attracting tax liabilities, including potential inheritance tax, following recent reforms | No ability to invest directly in property, with only HMRC-approved funds available – the list of recognised funds changes, which can make the options very limited in some jurisdictions |
Professional Support: Picking the Best Pension Transfer Options for You
All pension transfers carry a degree of risk, and making clear decisions based on forecasts and accurate budgets is the best way to ensure you’re selecting a transfer route you are satisfied meets your needs and doesn’t carry a higher tax burden than you are comfortable with.
There are also alternative ways to transfer a pension or restructure retirement funds if you determine that a transfer isn’t the ideal solution.
You might, for example, hold a valuable product such as a defined benefit fund with a guaranteed lifetime income, with FCA rules that mean you must seek independent, regulated advice if the fund is worth over £30,000 to be permitted to transfer it, should you decide this.
Further information is available by contacting any of the Chase Buchanan Private Wealth Management offices or by downloading our free SIPPs vs ROPS guide.
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 September 2025
