What Happens to your State Pension When You Move Abroad?
While it should ideally not be relied upon as your sole source of retirement income, your State Pension can provide a welcomed top up to your workplace and personal pensions. But, if you have moved abroad what happens to your State Pension and can you still claim your State Pension as an expat living in another country?
As an expat, you are likely to have many questions about your pension and retirement plan from what you can claim, how your pension will be taxed and what you can do to maximise your pension fund. Which is why it is advisable to seek pension advice from a financial adviser that specialises in expat pension advice.
At Prism Xpat our team of specialist expat financial advisers can work with you to provide you with tailored expat pension advice to ensure you have the most effective strategy in place. Our advisors provide advice on all aspects of expat pension advice and have extensive knowledge and experience in pension and retirement planning for expats.
Can I claim my State Pension if I live abroad?
Yes, it is possible to still claim your State Pension if you have moved abroad, providing you are eligible for a State Pension. You can still claim your State Pension as a regular payment in addition to your workplace and personal pensions.
Will I pay tax on my State Pension?
Non-UK residents will not usually pay UK tax on the State Pension, you may be liable to pay UK tax on your State Pension if you live abroad but are classed as a UK resident for tax purposes. Depending on your country of residence, it may also tax you on your UK income including your State Pension as per terms of the relevant Double Tax Agreement. A financial adviser who provides expat pension advice would be able to advise on your pension tax liabilities and whether a double-taxation agreement is in place between your country of residence and the UK.
If I live abroad will my State Pension increase?
If you claim your State Pension as a UK resident, your pension will rise annually. However, if you have moved abroad you may only be entitled to these increases if you are living in the European Economic Area (EEA). If living in Commonwealth countries such as Australia, New Zealand, Canada, or South Africa, you will not receive increases. It is important to mention that this could change post Brexit so it would be advisable to seek expat pension advice. If you were to move back to the UK your State Pension would increase to the current rate if you were entitled to receive it.
Can I build my State Pension if I live abroad?
Your eligibility for the State Pension depends on your National Insurance contributions and you must have at least ten years of contributions to be eligible to claim the State Pension. The more contributions you have the higher your weekly payment will be when you come to claim your State Pension. If you are living abroad you may be able to make voluntary class 3 National Insurance contributions to go towards building your State Pension and fill any gaps in your NI contributions.
It is important that if you are or have moved abroad you notify the relevant pension services and HMRC in relation to your State Pension. It is advisable to seek expat pension advice to ensure you are making the most of your State Pension and to understand how it will work in your country of residence.
At Prism Xpat, as an international financial advisory and expat pension advice specialist, our experienced team of advisers can support and guide you through all the options available to you for your pensions when you are moving abroad.
Please contact us at welcome@prismxpat.com or by phoning +44 345 450 4004 for further information, or to have a free, no-obligation chat about your own circumstances.