It’s not uncommon for Brits to want to relocate to somewhere warmer during their retirement, but the underlying question is will you get your pension and will it be the full amount? With current changes to rules and regulations with state pensions, questions like these are more important than ever because they can highly influence your decisions in the future.

I would like to put a disclaimer that all the information you find today may be useful with today’s rules and regulations. For extra added security with your decisions, I would recommend you reach out to a government official or check the website.

The Statistics

As of October 2024, there are currently over a million British pensioners who have moved abroad to enjoy their retirement and escape the bad weather that is the UK and to help them enjoy it, they are receiving their UK state pension. Of those million roughly, less than a quarter have settled somewhere in Europe, which I thought was relatively low considering Brits love the likes of France and Spain as retirement locations.

It’s likely some of the retirees have dual citizenship or are moving in hopes of enjoying the sun, culture and so on. But it’s not something that you can just pack up and do without time and planning in place, as in order to move. 

There are assets you will need to take care of, such as your home, visas to apply for, local bank accounts and going through the right ways to apply for and access your state pension.

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Will I Be Eligible To Claim My Pension?

If you are leaving the UK, you will need to check if you are eligible for your state pension; otherwise, you would have worked for 40-50+ years and have nothing to show for it. You can claim a state pension if you’ve paid enough UK National Insurance or if you have lived or worked abroad.

You may be able to claim your state pension, any defined contribution pension you may have, final salary pensions, any other payment you would be eligible for and the tax of moving abroad. 

Here is what you may be entitled to and how to claim:

State Pension

It’s good to know that currently you are able to claim your UK state pension if you move overseas. However, there are some benefits you don’t get when you do move abroad, such as that it will remain at the first initial year with no increases unless you have moved to any European economic area, Switzerland or any country that agrees to pass on cost of living increases to the state pension.

To ensure that you are eligible to claim your pensions, talk to your pension scheme provider; they may ask for additional information, such as an overseas bank account. It’s also key to remember that your pension will be affected by the exchange rate.

How To Claim Your State Pensions When Abroad

You can receive your state pension in one of two ways, such as into the bank account you currently hold to live in the new country or a bank account you still hold in the UK.

As mentioned above, you will need to get in touch with your pension provider and/or international pension centre to move your pension.

Do I Pay Tax on My Pension?

Another interesting factor to consider is tax. As you have to pay tax on your pension in the UK (which is ridiculous), the laws may be different depending on the country you are moving to.

You may still have to pay UK tax on your pension as it’s classed as a UK income, but depending on the country you are moving to, you may have to pay tax on top of that. If there is a double taxation agreement, you might be able to apply for tax relief to prevent the double taxation.

I would do your research on pension tax laws overseas, as this may result in a severe loss of earnings that are unsustainable, leaving you with very little money to enjoy your retirement.

I’m Moving Before Taking My Pension

If you plan on moving before you are entitled to your pension, there are one of two options you can follow through on to avoid problems with your UK pension entitlement.

First, you can stop paying into your money and take your money at a later date. Alternatively, you continue to pay into your pension, but the amount of tax relief may be limited.

Final Thoughts

Overall, you need to ensure that you are well-advised on the UK laws with moving abroad and pension entitlement, tax relief and which countries are the smoothest to relocate to. I would recommend looking into visas beforehand and beginning the process of where you are able to apply for indefinite leave to remain.