If you’re hoping to move abroad in the next few years you may be starting to think about getting your finances in order. For retirees, in particular, it is especially important to have a dependable source of money to rely on when you are not working.
So will you continue to receive the same pension if you move abroad? This is the most pressing question and the answer will depend on your circumstances and where you are moving to.
But don’t worry! In this blog we’ll be exploring everything you need to know about transferring your pension abroad including:
- Can you transfer a pension abroad?
- How can you transfer your pension abroad
- What else do you need to consider?
- Sending money
Can you transfer a pension abroad?
Yes. If you are a British retiree you will be able to to transfer your pension from the UK to another country. However, there are few things you need to consider before you jump on a plane and start heading for the beaches.
One of the first key elements to consider is how transferring your UK pension abroad may impact how and where you pay taxes. Transferring your pension abroad can sometimes make your taxes tricky and costly. This will depend on the country your moving to. We’d recommend speaking to a tax or pension specialist for advice before making the big move.
Another key element to consider is whether the country you’re moving to has a Qualifying Recognised Overseas Pension Scheme (QROPS). HMRC has a list of approved QROPS schemes which allow you to transfer your pension abroad without enduring a costly tax bill.
If you move your pension abroad to a non-QROPS scheme, then you could end up paying around 40% tax on the transfer. Whereas if you find an approved QROPS scheme in your country of choice that is suitable for your circumstances you will end up paying far less in taxes.
Not every country has QROPS schemes that have been approved by HMRC. Equally even some countries that do have QROPS schemes have very limited options. If this is the case then you will need to do some further research and really think about whether you can live abroad without your pension.
How can you transfer your pension abroad?
There are a few important steps to follow if you want to transfer your pension abroad from the UK.
Step 1 - Find a suitable QROPS scheme
Do you know which country you want to move to? If you do then one of the first things you should do is to check whether there are any suitable QROPS available. Many countries will have a variety of options so you should take your time to review each QROPS scheme and find one that is right for you.
The easiest way to do this is by visiting the GOV.UK webpage that provides a recognised overseas pension schemes notification list. Here you will find all the countries listed alphabetically and all the approved QROPS schemes available in those countries.
Step 2 - Ensure that your UK pension scheme allows transfers abroad
Once you’ve found a suitable QROPS scheme you should check whether your own UK pension scheme allows for transfers abroad. If It is an approved QROPS scheme then it will most likely be able to be transferred abroad, but it’s always worth checking.
Even if your pension scheme can be transferred abroad you will also need to check whether there are any conditions or further costs to consider.
Step 3 - Complete the transfer form and send it to your UK pension scheme administrator
You’re nearly there! The last step in setting up your pension transfer is to complete the Form APSS 263. You can find this online on the UK government’s website. By completing this form you will give you scheme administrator information to transfer sums or assets held to a qualifying recognised overseas pension scheme (QROPS).
According to Gov.UK, “You must provide this information within 60 days of your transfer request. The scheme administrator will need this information to determine whether your transfer is liable to the overseas transfer charge. HM Revenue and Customs may ask to see this…If you don’t provide this information to your pension scheme administrator within 60 days of your transfer request, your transfer will be subject to the overseas transfer charge and your scheme administrator will deduct this before making the transfer.”
If you follow these few basic steps you will give yourself the best chance of transferring your pension abroad.
What else do you need to consider?
Once you’ve decided where to move and whether you can transfer your pension to your new country of residence, you’ll probably still have a few more things to consider when emigrating.
Below we’ve provided a list of the documents you will usually need to have when moving abroad. These include:
- Health insurance
- National identity card
- Accommodation reservations or proof of a permanent accommodation
- Evidence of financial means
- Identity photos
All of these documents will be key to getting your new life abroad started. Whether you are trying to set up your healthcare, buy a car or sort out your taxes, these are some of the important documents you’ll be required to show whatever country you move to.
Send money home with Small World
Whether or not you choose to transfer your pension you may want to send money home to your family or friends. This is where Small World can help.
Small World is an international money transfer service helping millions transfer funds to their loved ones around the world every day. We offer a variety of safe, quick and easy transfer services including mobile wallet, bank deposit, cash card reload, home delivery, cash pickup and mobile top-up.
Your first digital transaction is always free of transfer fees!