Your UK Pension Options Before Moving Abroad (2026)

Leaving the UK does not sever your link with your pensions, but it does change how they are taxed, how they grow and who can be paid. Several decisions are easier to make while you are still UK resident than once you have landed elsewhere. This checklist links the main moving parts so nothing is missed before departure.

The right answer depends heavily on where you become tax resident. The points below set out the framework rather than a single course of action, because the rules differ by country and by scheme.

• Keep or transfer: most UK pensions can stay put when you emigrate; transferring overseas is a separate decision with its own charge.
• Tax residence and treaty: where you are tax resident, and whether a double taxation agreement exists, drives where pension income is taxed.
• State Pension and NI: the new State Pension needs 10 qualifying years to pay anything and 35 for the full rate; uprating abroad is not automatic.
• Voluntary NI: rules for paying voluntary contributions for periods abroad tighten from 6 April 2026.
• IHT exposure: unused pension funds come within inheritance tax from 6 April 2027.
• The NT code: a No Tax PAYE code can stop UK tax at source on pension income once HMRC agrees.

Keep the pension in the UK, or transfer it overseas

A UK personal or workplace pension can usually remain in the UK after you move. You stay invested, you keep UK consumer protections, and you can normally draw from it under UK rules from the minimum pension age. Many people leave schemes where they are for this reason.

Transferring to a Qualifying Recognised Overseas Pension Scheme (QROPS) is the alternative, and it carries the Overseas Transfer Charge (OTC) of 25 per cent unless an exclusion applies. The exclusion that previously covered transfers to schemes in the European Economic Area or Gibraltar was removed for transfers made on or after 30 October 2024. A transfer can still be free of the charge in limited cases, such as where you are resident in the same country as the receiving scheme. The keep-versus-transfer choice and the OTC are covered in detail in the cluster articles linked below.

Tax residence and the treaty position

Once you are non-UK resident under the Statutory Residence Test, where your pension income is taxed depends on the double taxation agreement between the UK and your new country. Some treaties give the country of residence sole taxing rights over private pension income; others treat government service pensions differently. The State Pension and lump sums can be treated differently again, so the treaty text matters more than any general rule.

Confirming the treaty position before you draw anything helps you avoid being taxed twice and then having to reclaim. Country-by-country detail sits in the dedicated guide linked at the foot of this article.

The NT code: stopping UK tax at source

When a UK scheme starts paying a non-resident, it normally operates an emergency code and deducts UK tax. Where a treaty gives taxing rights to your country of residence, you can apply for a No Tax (NT) code so the pension is paid gross from the UK. The route is HMRC's Form DT-Individual, certified by the tax authority in your country of residence. A small first payment is often needed to open the PAYE record, and HMRC processing commonly takes several weeks. An NT code stops UK deduction; it does not remove your duty to declare and pay tax where you live.

State Pension, qualifying years and voluntary NI

The new State Pension requires at least 10 qualifying years for any payment and 35 qualifying years for the full amount. Living abroad does not stop you claiming what you have built up. It does affect annual increases: the State Pension is only uprated abroad where there is a legal requirement, such as living in the EEA, Switzerland or a country with a social security agreement that includes uprating. In countries without that arrangement, including Australia, Canada and New Zealand, the pension is frozen at its starting rate.

Filling gaps with voluntary National Insurance can lift your eventual entitlement, and the rules for periods abroad change from 6 April 2026. New applications to pay voluntary Class 3 for periods abroad will require at least 10 continuous years of past UK residence or 10 qualifying years on record. Voluntary Class 2 for periods working abroad narrows to limited groups such as certain self-employed workers under an international agreement. Existing payers benefit from transitional protection. Checking your NI record before you leave is far simpler than untangling it later.

Inheritance tax and your beneficiaries

Inheritance tax applies at 40 per cent above the nil-rate band of £325,000, with a residence nil-rate band of up to £175,000 where the conditions are met. Pension death benefits have largely sat outside IHT, but from 6 April 2027 unused pension funds and most pension death benefits are brought into the estate for IHT, with transfers to a spouse or civil partner remaining exempt. Reviewing your expression-of-wish nominations and understanding how your country of residence treats inherited pensions is part of the pre-departure list, alongside checking that your provider accepts overseas address and payment details.

This article is for general information only and does not constitute financial, tax or regulatory advice. Kaeltripton.com is not authorised or regulated by the FCA. Pension and tax rules differ by country of residence and change over time. Verify any figure with official sources such as GOV.UK, HMRC or the FCA, and take advice from a suitably authorised adviser in your country of residence before acting.

FAQ

Do I have to move my UK pension when I emigrate?

No. Most UK personal and workplace pensions can stay in the UK after you move, keeping UK rules and protections. Transferring to an overseas scheme is a separate choice that can carry the 25% Overseas Transfer Charge.

What is the NT code and how do I get one?

An NT (No Tax) code lets a UK scheme pay your pension without deducting UK tax, where a treaty gives taxing rights to your country of residence. You apply using HMRC Form DT-Individual, certified by your local tax authority. You still declare the income where you live.

Will my State Pension increase each year if I live abroad?

Only where there is a legal requirement, such as living in the EEA, Switzerland or a country with a social security agreement that includes uprating. In countries without that arrangement, including Australia and Canada, the State Pension is frozen at its starting rate.

Can I still pay voluntary National Insurance from abroad?

Yes, but the rules tighten from 6 April 2026. New voluntary Class 3 applications for periods abroad will generally require 10 continuous years of past UK residence or 10 qualifying years. Voluntary Class 2 for periods working abroad narrows to limited groups. Existing payers have transitional protection.

Are unused pensions subject to inheritance tax?

From 6 April 2027, unused pension funds and most pension death benefits are brought into the estate for inheritance tax, charged at 40% above the nil-rate band. Transfers to a spouse or civil partner remain exempt. Reviewing nominations before you leave is sensible.