Transfer Overseas Pension to UK
With many types of pension scheme available in the UK, each offering varying rates and terms, account holders often consider transferring their foreign pension into a UK pot.
The problem is, how can you be sure that you’re making the right decision about where to transfer your overseas pension? Fortunately, the pensions advisors we work with are experts in this area, and can give you the right advice.
In this guide, we cover the following topics:
- Can I transfer my overseas pension to a UK scheme?
- Can I transfer a UK pension to Europe?
- Can I transfer a UK pension outside of the EU?
- Transferring a US pension to a UK pension
- Transferring a German pension to the UK
- Transferring from Japan to the UK
- Transferring a Swiss pension to the UK
- Transferring a Dutch pension to the UK
- Is transferring my overseas pension to a UK pension a good idea?
- What is a transfer value?
- Where can I transfer my international pension to in the UK?
- Ask an expert
Can I transfer my overseas pension to a UK scheme?
Depending on the terms of your pension scheme, it may be possible to transfer your overseas pension to a UK scheme.
The rules about how much you will be taxed and when you will receive your pension can differ from country to country, so always seek advice from one of the pensions experts we work with. They will have specific knowledge about the country you are transferring from and the costs that may be involved.
Some overseas retirees find it more financially viable to have their pension paid into a bank account in their home country and then to simply transfer their funds into a UK account.
That being said, there may be pension schemes in the UK that could offer a better overall payout, so it’s always worth comparing.
For advice on how to transfer your pension from a European or international pension fund into a UK scheme, contact one of the international pension transfer specialists we work with by making an enquiry.
Can I transfer a UK pension to Europe?
To be able to transfer your pension to Europe, the new scheme must be recognised by HM Revenue and Customs as a qualifying overseas pension scheme. This is also referred to as QROPS.
The scheme must be:
- Regulated as a pension scheme in the country where it is established
- Recognised for tax purposes (so benefits that are paid to you from the scheme must be subject to taxation)
For more information on how to transfer your UK pension overseas and your EU pension transfer rights, speak to one of the pension experts we work with.
Can I transfer a UK pension outside of the EU?
This can vary heavily depending on the country you are planning on moving to or transferring your pension pot to.
Some countries such as Japan or Jamaica are part of an agreement with the UK which means that although pensions can be transferred, any earnings made in the country of residency will be attributed towards that country.
This can affect how much state pension you may be entitled to in your native country, so if you decide to move back and transfer your pension over, this is something to consider.
Transferring a US pension to the UK
The majority of pensions in the US are deferred pension schemes. This means that while working, the pension holder paid into a scheme through their company and then when they retire, the pension provider gives them income for their retirement.
Similarly to the UK, the income received as a pension is taxable and unfortunately, if you want to transfer your US pension into a UK pension, you may be subject to tax in both countries.
However, it may be possible to avoid double taxation. Taxes paid in UK on pension income are applied as a foreign tax credit against tax owed on the same income in the US.
US regulations on pensions transfers can be complicated so it’s important that the person advising you has experience and knowledge about US to UK pensions transfers.
You can arrange a free, no obligation chat with one of the retirement and pensions specialist we work with for more information about how to transfer your US pension to the UK.
Transferring a German pension to the UK
It may be possible to transfer your German pension into a UK scheme but before you do, always consider the tax implications and charges that you may be expected to pay after transferring your funds.
Pension payments are taxed as earned income in the UK, so a pension transfer from Germany to the UK could be taxed twice – once under the UK PAYE system and then again in Germany.
However, as with most European countries, Germany has a Double Taxation Agreement (DTA) with the UK.
This means that if you transfer your pension from Germany to the UK, you may be able to reclaim the tax paid in Germany.
Transferring from Japan
If you are Japanese and currently live in the UK, any contributions you make in the UK system such as National Insurance, are covered by the Double Contributions Convention.
This is an agreement made between Japan and the UK that means that contributions paid to each country will count towards benefits and pensions in that country only.
This is something to consider when transferring your Japanese pension to a UK pension as not only will you be taxed, but any money that you make during your retirement (if you decide to continue working) will be taxed and therefore contribute towards the UK system.
If you decide to move and transfer your pension back to Japan, your Japanese entitlements could be affected.
Speak to an advisor for more information on how transferring your Japanese pension to the UK could affect you financially.
Transferring a Swiss pension
If you have a Swiss pension, you may be aware that there are different types of schemes which each have varying rules that may affect your decision to transfer from a Swiss to a UK pension.
Pillar 3 – private pensions
A Pillar 3 scheme is essentially a private pension and can be easier to transfer into a UK pension scheme.
Therefore, if someone decides to leave Switzerland and permanently live abroad, a Pillar 3 plan can be cashed or transferred. Of course, you may be subject to exit fees or tax.
Therefore, it may be advisable to cash in your Swiss pension before moving or transferring it to the UK, depending on your circumstances and the cost of doing so.
Swiss tax rates can be a lot lower than those in the UK and the rest of Europe, so calculate each option before making a decision.
Pillar 2 – company pension scheme
The regulations for Pillar 2 pensions are stricter and although you may be able to transfer some of your contributions, you will not be able to transfer them all into a UK pension plan.
Pillar 2 benefits cannot be withdrawn if you are moving to an EU/EFTA country and if you are moving to the UK and have a Swiss Pillar 2 pension, you will need to have your pension paid into a Swiss bank account.
Once you reach retirement age, your pension will be paid to you.
Transferring a Dutch pension
In Holland, it is possible to transfer either a private pension scheme, occupational pension scheme or defined benefit pension scheme to the UK.
As long as the new pension scheme in the UK meets certain conditions according to the Dutch tax authorities, then the transfer should be a simple process.
The only exception to this rule is that you cannot transfer a Dutch state pension (AOW) to another country.
Before committing to transferring your Dutch pension, have a pensions professional compare the costs of keeping your pension in your Dutch scheme versus moving them to a UK scheme.
Is transferring my overseas pension to the UK a good idea?
Before you proceed with any transfer, you need to understand the financial impact that it could have on you.
- Compare your options: There are hundreds of pension providers across the UK to choose from and each one may differ in what they could offer you.
- Calculate which one will provide you with the most income after you deduct any fees.
- Think about the terms and conditions: Which one will be most suited to your needs in retirement?
- Seek help from an expert: They will have access to hundreds of pension schemes and can quickly highlight which ones can offer you what you are looking for.
Last and certainly not least, do not succumb to any pressure to transfer your pension unless you are absolutely certain that it is the right move for you.
The international pensions specialists that we work with provide confidential advice and can help you compare your options.
If you’d like to discuss transferring your foreign pension to a UK scheme, you can arrange a free, no obligation chat with one of the pensions experts we work with.
What is a transfer value?
This is simply the cash value of your pension pot if you were to transfer it from one place to another. You can read more about pension transfer values and how they are calculated in our standalone guide to pension transfer values.
Before deciding to transfer your overseas pension to a UK scheme, it’s vital that you understand the costs and know which option is financially better for you.
Some pension providers charge an exit fee, which could cost you just as much as you would have made by transferring your pension.
The figure you are left with after deducting these fees or any other charges you could accumulate if you decide to transfer is called your transfer value.
How is an international transfer value calculated?
It is calculated using a number of variables which may include:
- Your age
- How close you are to retirement
- The investment strategy of the pension scheme you’re currently in
- Life expectancy
Leaving your current overseas provider could seem appealing, especially if a UK pension scheme is prepared to offer you better benefits or a higher rate of interest on your pension.
However, the fees that your current provider may charge you, could cost you just as much or more as you would have made with your new provider.
Where can I transfer my international pension to in the UK?
There could be many potential schemes suitable for you depending on your circumstances.
As long as the overseas pension scheme is a qualifying scheme, recognised by HM Revenue and Customs, it could be either of the below pension types:
- A new employer’s workplace pension scheme
- A personal pension scheme
- A self-invested personal pension (SIPP)
- A stakeholder pension (SHP) scheme
Speak to a pension transfer specialist
It can be really helpful to talk to a professional who can thoroughly check any contracts on your behalf.
Transferring your overseas pension to the UK is a huge decision and one that shouldn’t be taken lightly or without bespoke advice.
If you are unsure about how to transfer your foreign pension to the UK or want to understand more about the varying rules and regulations that could affect you when transferring from a specific country, then please call us on 0808 189 0463.
Alternatively, you can make an enquiry online and a pensions specialist will be in touch shortly.