Overseas pension transfers: What every expat needs to know

If you’ve built up one or more UK pensions but now live abroad, you might be wondering whether you can transfer them overseas or back to the UK. Pension rules are complex, and the right decision depends on where you live, how long you plan to stay abroad and what kind of pension you hold.

This article explains the key considerations for transferring your UK pension in 2025/26, including how the abolition of the Lifetime Allowance and new lump-sum limits affect transfers, when a ROPS/QROPS may still be useful, how to spot a scam and when to seek regulated advice before taking action.

Disclaimer

The information in this article is for general information only and should not be regarded as financial advice. Your personal circumstances, tax position and local regulations will affect any transfer decision. Always speak to a regulated pensions adviser before making changes to your retirement plans.

Understanding how UK pension transfers work

A pension transfer involves moving the value of your UK pension to another recognised scheme. This could be:

• another UK-based scheme, such as consolidating multiple workplace pensions
• an overseas scheme, known as a Qualifying Recognised Overseas Pension Scheme (ROPS/QROPS), if it meets HMRC approval
• a self-invested personal pension (SIPP) for people who want to retain UK regulation but greater flexibility while living abroad

The receiving scheme must meet HMRC’s qualifying standards. If it does not, tax charges of up to 25 per cent can apply on transfer.

Pension changes from 2025/26

The Lifetime Allowance (LTA) was abolished from April 2025 and replaced by two new limits:

• the Lump Sum Allowance (LSA) of £268,275, capping how much you can take tax-free from pensions across your lifetime
• the Lump Sum and Death Benefit Allowance (LSDBA) of £1,073,100, affecting larger pots and estate planning

Although these limits don’t change whether you can transfer, they influence how much can be withdrawn tax-free once the transfer is complete. Any overseas move should factor in these new allowances, plus local pension rules and double-taxation agreements.

When an overseas pension transfer might make sense

You may consider a transfer to a ROPS/QROPS or other international scheme if:

• you have been living abroad for five years or more
• your long-term retirement income will be in a foreign currency
• you want to avoid exchange-rate risk or simplify estate planning
• your current UK provider restricts access from overseas

However, many countries no longer offer ROPS/QROPS options or have tightened rules. Transferring to an unsuitable scheme can trigger unexpected UK tax and local compliance issues. Always confirm with a UK-regulated adviser who understands both jurisdictions.

Legacy issues with ROPS/QROPS and pension transfers

In the years following the introduction of Qualifying Recognised Overseas Pension Schemes (ROPS/QROPS) in 2006, many expats were encouraged to move their UK pensions overseas without fully understanding the implications.

A significant number of these transfers were later deemed inappropriate or mis-sold, often because:

• advisers were unregulated or based outside the UK
• fees and commissions were not disclosed or were excessively high
• transferred funds were invested in high-risk, illiquid or unregulated products
• clients were told they could avoid UK tax altogether, which was incorrect

As a result, thousands of individuals have suffered losses or tax penalties and HMRC has since tightened both ROPS/QROPS registration and reporting rules.

If your pension was transferred to a ROPS/QROPS more than a few years ago, or if you are unsure who manages it, it is worth having the arrangement reviewed by a UK-regulated adviser. They can confirm whether:

• the scheme remains recognised by HMRC
• the underlying investments are suitable and properly diversified
• you might have grounds for redress or compensation if the transfer was mis-sold

Recognising these legacy issues helps prevent further losses and ensures that new transfers are made for the right reasons and under appropriate regulation.

ROPS/QROPS lock-in periods explained

Many overseas pension schemes include lock-in periods, designed to restrict withdrawals or further transfers for a set number of years. These can last for five, ten, fifteen or even twenty-five years, depending on the structure and the adviser who arranged the transfer.

While these restrictions can protect long-term investment plans, they often prevent people from switching to better or safer arrangements. In some cases, investors have seen their pension value eroded by high annual charges, underperforming or unsuitable investments, or adviser commissions that were deducted during the lock-in period.

If your lock-in period is due to expire soon, it is a good time to review your pension’s performance and options. A regulated adviser can help determine whether keeping the ROPS/QROPS is still in your best interest or whether a transfer back to a UK-registered scheme would provide better value and protection.

Receiving cold calls about pensions or pension transfers

If you receive a cold call or unsolicited message about transferring your pension, it should be treated with extreme caution. Cold calls about pensions have been banned in the UK since 2019, yet unregulated introducers still target expats living abroad.

Common warning signs include:

• claims of guaranteed high returns or early access to your pension
• pressure to act quickly before a deadline or “rule change”
• reluctance to share details of the company’s regulation or address
• offers to invest in property funds, hotels or overseas developments

These approaches are rarely in your interests and can lead to financial loss or tax penalties. If you are contacted unexpectedly, do not share personal or financial information and avoid signing any documents.

Instead, contact a UK-regulated adviser independently or check the Financial Conduct Authority (FCA) register to confirm whether the firm and adviser are authorised. Remember, just because their company name is on the FCA register, if they are not UK based, this is unlikely to be them.

You can also report suspicious calls to the FCA ScamSmart service.

Regional considerations

Australia

Australia has a well-established superannuation system, but only a small number of schemes qualify as ROPS/QROPS. Since 2015, most Australian funds have lost ROPS/QROPS status because they allow early access to savings, which breaches UK rules. Transfers are generally only possible through self-managed superannuation funds that meet strict criteria.

Tax can also apply on transfer values, and currency fluctuations between sterling and Australian dollars should be considered. Always confirm that your receiving scheme remains on the HMRC ROPS/QROPS list before transferring.

United States

The USA has no HMRC-recognised ROPS/QROPS, which means you cannot transfer a UK pension directly into an American plan.

British expats in the US often retain their pension in a UK scheme such as a SIPP and draw benefits from abroad. The UK–US double taxation agreement can prevent double taxation, but withdrawals may still be taxable in the US. Professional advice is essential to coordinate UK and IRS reporting.

European Union countries

Within the EU, only certain Malta and Gibraltar schemes currently maintain ROPS/QROPS status. EU residents can sometimes transfer to these jurisdictions, but local tax treatment varies by country.

Brexit has also introduced extra complexities for advisers and pension providers, making regulated cross-border advice even more important. Before transferring, verify both UK recognition and local approval of the receiving scheme.

Canada

Canada does not have any ROPS/QROPS registered with HMRC, meaning UK pensions cannot be transferred directly to Canadian plans.

Most UK expats in Canada therefore retain their pensions in the UK, using a SIPP or other UK-registered vehicle. Pension income is usually taxable in Canada under the UK–Canada tax treaty, with relief available for UK tax paid. Exchange rate and reporting differences should be reviewed before accessing funds.

When it may be better to keep your pension in the UK

Keeping your pension in the UK could be safer if:

• you plan to return to the UK in future
• your pension is already in a modern SIPP or flexible drawdown plan
• your destination country taxes overseas pensions unfavourably
• you prefer the protection of UK regulation and FSCS safeguards

A professional adviser can model outcomes for both scenarios so you can see how currency, charges and tax interact over time.

Transferring your pension back to the UK

If you previously moved your pension to a ROPS/QROPS or other international scheme but have since returned to the UK, you can usually transfer it back into a UK-registered scheme without penalty. This is common when expats repatriate after working abroad. Timing the transfer correctly ensures funds are re-registered efficiently and future withdrawals follow UK rules.

The importance of regulated advice

Pension transfers are among the most heavily regulated financial decisions you can make.
A regulated adviser will:

• check whether your existing scheme includes valuable guarantees
• compare tax treatment in both countries
• ensure the receiving scheme is fully recognised by HMRC
• model the long-term currency and investment risks

Most reputable UK advisers will only recommend a transfer if there is a clear financial benefit and full compliance with UK rules.

Checklist for considering an overseas pension transfer

• Confirm whether your current pension scheme remains HMRC-recognised.
• Check if you are within, or nearing the end of, a ROPS/QROPS lock-in period.
• Review your pension’s recent valuation and compare it with your original transfer amount.
• Assess whether high fees, poor investment choices or mis-selling have reduced your pension’s value.
• If you have received a cold call or unsolicited email about a pension transfer, ignore it and seek advice from a regulated adviser.
• Request confirmation of regulation and permissions from any adviser before proceeding.
• Speak to a UK-regulated pension specialist before transferring or repatriating your funds.
• Keep documentation from your original transfer in case of review or redress claims.
• Ensure any future transfer recommendation is provided by a regulated adviser authorised to advise on UK pensions.

Frequently asked questions

When to speak to an independent pensions specialist

You should seek assistance from an independent specialist if:

• you live abroad and hold UK pensions worth more than £75,000
• you are unsure whether your overseas scheme is HMRC-recognised
• you have been cold called or pressured to transfer your pension
• you transferred your pension to a ROPS/QROPS and are coming to the end of a lock-in period
• you want to transfer to or from the USA, Australia, or EU countries
• you plan to access your pension within the next few years

A regulated pensions specialist can help you understand your current position, assess whether your existing scheme still meets HMRC recognition, and decide whether transferring back to a UK-registered pension or consolidating into a more suitable structure is now the best option.

We can introduce you to a regulated adviser with experience in reviewing legacy ROPS/QROPS and international pensions, who can provide an objective assessment and guide you through your next steps.