Should you transfer your pension to a QROPS when you emigrate?
Transferring a UK pension to a qualifying recognised overseas pension scheme attracts a 25% overseas transfer charge unless a specific exclusion applies, and the exclusions were narrowed on 30 October 2024. For most people retiring abroad the prior question is whether a transfer is needed at all, because a UK pension can usually be drawn perfectly well from overseas.
- The charge: 25% of the transferred value where no exclusion applies.
- The exclusions: narrowed on 30 October 2024; residence in the same country as the scheme is the main one.
- The allowance: transfers are also tested against the overseas transfer allowance.
- The alternative: keep the UK scheme and draw from it, which most people can do.
01 What the charge is
A transfer from a UK registered pension scheme to a qualifying recognised overseas pension scheme is subject to a 25% charge on the amount transferred, unless one of the defined exclusions applies. The charge is deducted at the point of transfer by the scheme administrator.
The exclusions are narrow. The main one is that you are resident in the same country as the receiving scheme. Others cover schemes set up by an international organisation, an overseas public service scheme of which you are an employee, and an occupational scheme of your employer. Pension savings held before 9 March 2017 have their own protection.
The exclusions were updated on 30 October 2024, and guidance written before that date should not be relied on. Transfers are also tested against the overseas transfer allowance, which interacts with the lump sum and death benefit allowance.
Shows: what the overseas transfer charge takes from a transfer, and what the remainder has to earn back. Ignores: the overseas transfer allowance, adviser fees, currency movements, and the receiving scheme's charges.
On the defaults above, the worked example shows £300,000. £100,000 is deducted at transfer, and the remainder takes about 5.9 years of growth to get back to where it started.
02 Why most people do not need one
A UK pension can be drawn while living abroad. Providers pay into foreign bank accounts, drawdown continues, annuities continue, and the treaty with your country of residence decides where the income is taxed. None of that requires the money to leave the UK system.
What a transfer can offer is currency alignment, local administration, and in some cases different succession rules. Those are real considerations for a permanent move to a country where the scheme is established, and they are not worth 25% where an exclusion does not apply.
The industry that markets these transfers is not neutral about the answer. Advice fees on an overseas transfer are typically a percentage of a large sum, and the charging structures have attracted regulatory attention for years.
Source: FCA on pension transfers
03 The checks before transferring
Confirm the receiving scheme is on HMRC's published QROPS list on the day of transfer, because inclusion is not permanent and a transfer to a scheme that has been removed is an unauthorised payment with its own severe charges.
Establish the exclusion you are relying on in writing, and confirm your residence position under the Statutory Residence Test rather than assuming departure alone settles it. The charge is assessed on the facts at the time of transfer.
And run the same test as any domestic transfer: what guarantees are being given up, what the receiving scheme charges annually, and what the money would do if left where it is. A 25% charge is only the most visible cost.
Source: Transferring your pension
Start from the assumption that you do not need this. A UK pension pays into a foreign bank account perfectly well, drawdown carries on, and the treaty decides who taxes the income — none of which requires moving the money. The transfer makes sense for a permanent move to a country where the scheme is actually established, and there it usually falls inside an exclusion. Everywhere else you are being asked to pay a quarter of the pot for currency convenience. If someone is recommending it, ask them which specific exclusion applies to you and get the answer in writing.
FAQ
When does the 25% charge not apply?
Mainly where you are resident in the same country as the receiving scheme. Other exclusions cover international organisation schemes, overseas public service schemes of which you are an employee, and an employer's occupational scheme. The exclusions were narrowed on 30 October 2024.
Can I draw a UK pension while living abroad?
Yes. Providers pay into foreign bank accounts, drawdown and annuities continue, and the double taxation agreement with your country of residence decides where the income is taxed. A transfer is not needed to access the money.
What if the receiving scheme is removed from the QROPS list?
A transfer to a scheme not on HMRC's list at the time is an unauthorised payment, with charges far worse than the 25%. Confirm the scheme's status on the day of transfer rather than relying on an earlier check.
Sources
Regulator references
- Overseas pensions: pension transfers · HM Revenue and Customs · 2025The QROPS conditions and when the overseas transfer charge applies.Last verified: 2026-09-07
- FCA on pension transfers · Financial Conduct Authority · 2025The advice requirement on transfers out of a defined benefit scheme.Last verified: 2026-09-07
- Transferring your pension · GOV.UK · 2025The transfer rules, including the advice requirement on safeguarded benefits.Last verified: 2026-09-07
Calculator unit tests · the assertions this page's worked example is checked against, and their last result
Changelog
- 2026-09-07 — initial publish (new format)
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Jordan Reeves
Founder of Talk Through Wealth. A software engineer for over a decade before turning to retirement planning, Jordan built the projection engine after watching family members get fragmented, country-by-country advice that never reconciled. He writes about retirement the way the engine computes it: month-by-month, lifetime-long, and skeptical of any rule of thumb that hasn't been run through the math.