- February 24, 2023
- Posted by: Simon Huften
- Category: QROPS
You can receive your UK State Pension outside of the UK
Amount you will receive depends on your contributions
Check with HMRC to determine eligibility and payout amounts
You may have to pay tax in both countries – check with your accountant
Yes, you can generally continue to receive your UK State Pension if you leave the country. However, there are some important factors to consider, such as where you are moving to, how long you plan to stay there and whether you will continue to pay UK National Insurance contributions.
Here are some key points to keep in mind:
Eligibility to Receive UK State Pension
To be eligible to receive the UK State Pension, you need to have paid National Insurance contributions for a certain number of years. The number of qualifying years will depend on your date of birth and the amount of years that you have accrued. You can check this on the government’s website. To be eligible for the full State Pension, you generally need to have paid contributions for at least 35 years.
If you have not yet reached State Pension age and are planning to move abroad, it’s important to notify the UK government’s International Pension Centre so that they can keep your records up to date.
Continuing to Pay National Insurance Contributions
If you move abroad, you may be able to continue paying National Insurance contributions voluntarily. This can be important for maintaining your eligibility for the UK State Pension, as well as other benefits such as the NHS. The rules for voluntary contributions depend on where you are moving to and for how long, so it’s a good idea to check with the UK government’s International Pension Centre.
How Much You Will Receive
The amount of UK State Pension you receive while living abroad is based on the number of years you have paid National Insurance contributions. The UK government provides an online tool to help you estimate how much you may be eligible to receive.
It’s worth noting that if you live in certain countries, such as Canada or New Zealand, your State Pension may be frozen at the rate it was when you left the UK. This means that you will not receive any annual increases to your pension, which can significantly impact your long-term income. It’s important to research this in advance if you are planning to move to a country where the State Pension is frozen.
How You Will Receive Your Pension
If you live abroad and are eligible to receive the UK State Pension, you will generally receive your payments in the same way as if you were living in the UK. This means that you can have your payments paid into a UK bank account and then convert them as necessary.
If you receive the UK State Pension while living abroad, you may need to pay tax on it in both the UK and the country you are living in. The UK has agreements with many countries to prevent double taxation, but the rules can be complex and vary depending on your specific circumstances. It’s important to seek professional tax advice before making any decisions.
Changes To The Rules After Brexit
Following the UK’s departure from the European Union, there have been some changes to the rules around receiving the UK State Pension while living in the EU. If you are living in an EU country and started receiving your UK State Pension before January 1 2021, you can generally continue to receive it as normal. If you started receiving your pension after this date, or if you are planning to move to an EU country in the future, the rules may be different. The UK government has provided guidance on how Brexit may impact your eligibility to receive the State Pension.
In summary, if you are planning to move abroad and are eligible for the UK State Pension, you can continue to receive it while living outside the UK. However, there are important factors to consider, such as whether you will continue to pay National Insurance contributions, how much you will receive, and whether you will need to pay tax on your pension in both countries.
Unfortunately, we cannot transfer your UK State Pension from the UK to Canada, but we can provide guidance if you have questions. Please contact us today for to discuss further.