Pensions are built under one country’s rules and then asked to survive another country’s tax and, sometimes, another country’s advice industry. The pressure to ‘do something’ arrives early. The facts arrive late. Collect the facts from the scheme before you collect proposals from people who are paid if you move the money.
Know which kind of pension it is
A defined benefit pension promises a benefit worked out from salary and service. Transferring it means giving up that promise for a value that has to be invested. That is a specialist decision, often with a requirement for advice. A defined contribution pension is a pot. What you can pay in, how it is invested, and when you can take it still depend on the scheme rules and on the law, not on your flight.
Tax and access are local questions
The country you leave and the country you join may each have a view on contributions, on growth and on money you take out. A treaty may matter. Double tax is a risk to ask about, not a fate this article declares. So is the idea that a withdrawal is ‘free’ because you live somewhere with a different income tax. Ask, with the scheme type and the countries named.
If someone suggests a transfer
Ask what you are giving up, what charges sit in the new arrangement, whether the adviser is permitted to advise a resident of your new country, and how they are paid. Ask the scheme what would happen if you left the pension where it is: can they still pay you abroad, and will they still communicate? Doing nothing is sometimes a decision. It should be a conscious one, reviewed, not a default you forget.
A change of address is not a transfer
Tell the scheme you are moving, and say what you are not asking for. A change of address, a change of tax residence and a request to transfer are different letters. Schemes that receive an ambiguous message can start a process you did not intend, or can freeze a payment while they ask. Ask what they need in order to keep paying you, or to keep your record up to date, and ask what they will not do for a member living in the new country.
Transfers, especially of a defined-benefit pension, are a regulated decision in many countries and a costly one to undo. This guide does not say whether a transfer is wise. It says the questions to ask before anyone starts paperwork: what are you giving up, what are you moving into, who is advising you, and are they authorised to advise you once you live where you live? If nobody can answer the last of those, stop.
What to have on the table before you act
Ask for a current statement, the scheme rules that describe leaving or transferring, and the names of any beneficiary you have nominated. A nomination is not usually a will, and a move is a reason to check it still names the right person. Ask how the scheme wants proof of life or a new address later, so a pension does not stop because a letter went to the old house.
Tax on pension payments can arise in the country that pays, the country where you live, or both, with a treaty sometimes changing the picture. The result is personal and it is not stated here. Take the scheme’s facts to a qualified adviser before you draw money because a neighbour said the destination does not tax pensions. Keep the adviser’s note with the scheme statement.
A practical checklist
- Scheme type and a current statement.
- Rules on paying in once you are non-resident.
- Rules on being paid overseas.
- A note of any guarantee you would give up.
- Advice from someone qualified to give it, if a transfer is even on the table.
- No signature at a seminar.
Questions to ask
- Can I remain a member if I live abroad?
- Can you pay me into an account overseas?
- What stops if I am non-resident?
- If I transfer, what promise am I giving up?
- Who may advise me on that transfer where I will live?
- How are they paid?
Common mistakes
- Transferring because friends did.
- Treating a defined benefit quote as a cash balance you ‘should’ take.
- Assuming the new country will not tax withdrawals.
- Leaving the scheme without an address so letters die.
- Mixing the pension into a general investment transfer.
WiT Access provides general information and comparison resources. Nothing on this website constitutes financial, tax, legal or investment advice. Always consider obtaining advice from an appropriately qualified professional.
