All QROPS Articles, Brexit and Pensions

Pension Transfers to Europe

It is possible to transfer UK, Irish, Dutch and other Pillar II pensions to Europe as long as your current pension custodians allow the transfer. Only defined benefit pensions (final salary or occupational pensions) and defined contribution pensions such as SIPP, SSAS and private pensions can be transferred to a Qualifying Recognised Overseas Pension Scheme (QROPS) in Europe.

State pensions cannot be transferred to QROPS, but they can be paid into your bank account in Europe. Unfunded public pension schemes such as the NHS, police, armed forces and civil service pensions cannot be transferred to Europe either.

Can My State Pension be Paid into a Bank Account in Europe?

Yes, UK state pensions can be paid into your bank account in Europe. You can claim your UK State Pension in Europe if you’ve paid enough UK National Insurance Contributions (NICs) to qualify.

Please click here if you need to back-pay your NICs.

Can I Get My State Pension Paid into the UK and in Europe?

No, you must choose which country you want your pension to be paid in. You cannot be paid in one country for part of the year and a different country for the rest of the year.

Your UK State Pension can be paid into:

  • a bank in the country in Europe where you are currently living or
  • a bank or building society in the UK

You can use:

  • an account in your name
  • a joint account
  • someone else’s account – if you have their permission and keep to the terms and conditions of the account

You’ll need the international bank account number (IBAN) and bank identification code (BIC) numbers of your bank account in Europe.

You’ll be paid in EUR – the amount you get may change due to exchange rates which will fluctuate over time.

Will I Still Get My UK State Pension Paid Abroad after Brexit?

Yes. Retirees will still be entitled to the state pension they have built up, but it may be that those pension payments are frozen. Currently, if you live in the European Economic Area, your pension rises with inflation under the “triple lock” rule.

The arrangements to apply in future have been part of the negotiations under Article 50 on the UK’s withdrawal from the EU. A joint report on progress published on 8 December 2017 said that, with the caveat that “nothing is agreed until everything is agreed”, the Withdrawal Agreement would include a commitment to social security co-ordination.

.. As a result, UK state pension payouts should not be affected in any material way by Brexit. You can read the full parliamentary paper here.

The Financial Times includes a statement from Baroness Buscombe, undersecretary of state with the department for work and pensions , that UK State pensions will increase in line with inflation in 2019/20 despite a “no deal” Brexit.

It is still unclear whether exiting the EU will mean the end of the triple lock arrangement for state pensions in the long run, as the UK would need to negotiate reciprocal arrangements with individual EU nations.

Will My Company Pension Scheme Be Affected by Brexit?

Defined benefit, occupational or final salary pension schemes are based on an arrangement between an employer and employee. As a result, they should not be affected in any material way by Brexit. However, your pension will continue to be paid out in GBP and may be taxed in the UK.

Will My Private Pension Scheme Be Affected by Brexit?

Defined contribution schemes, SIPPs or SSAS should not be affected in any material way by Brexit.

However, it may be an issue for some annuities. It may be illegal under current law to pay the retirement benefits overseas. A ‘No Deal’ Brexit could mean that private UK companies have problems paying out, say, an annuity to a UK citizen in the EU. There could be cost issues and the question of exchange rates for companies transferring money. The Association of British Insurers (ABI) states that this issue can be solved by a ‘cooperation between EU and UK regulators’, but this issue has not been resolved yet. If this were to happen, expats could continue to draw out their private pensions without issue.  

UK Pension Transfers to a European QROPS or International SIPP

If you are moving to Europe, your UK pension scheme can often be paid into your bank account in Europe. However, it may face UK tax and it is always priced in GBP.

If you are moving to Europe and intend to retire permanently in Europe or abroad, you may want to move your pension from GBP to EUR. This stops currency movements affecting your monthly or annual retirement benefits. This can be a desired result. For example, between the summer of 2015 and 2018, the pound had lost over 20% against the euro.

If you had been saving in GBP, that would have cut your retirement benefits in EUR by 20% in as little as three years!

UK SIPP vs International SIPP vs QROPS

As you can see in the table below, you can see the biggest differences.

UK SIPP = self-invested, lower fees, GBP only. The pound lost over 20% in three years from 2015 – 2018 against the EUR

International SIPP = self directed or actively managed by a discretionary fund manager. It can be set up in EUR, but there is still a tax on death after age 75

Malta QROPS = a European regulated pension scheme in EUR with no tax on growth or death at source as long as you remain tax resident outside the UK upon death

Hargreaves Landsdown
Isle of Man
International SIPP

Countries Accepted Must be EEA or UK resident Any Country EEA Only*
Range of Funds Limited Open Architecture Open Architecture
Currency GBP only EUR or GBP EUR or GBP
Financial Adviser Not Included Needs Adviser Attached Needs Adviser Attached
Self Dealing Yes No, but self-directed ok No, but self-directed ok
Tax on death Up to 45% after age 75 Up to 45% after age 75 0% tax on death
Income tax at source up to 45% if no DTA* up to 45% if no DTA* 0% in Malta if DTA*; up to 35% if no DTA
Platform Fees < 0.45% p.a. < 1% p.a. < 1% p.a.
Phone Dealing 1% of value of trade Approx. 25 GBP Approx. 25 GBP
Minimum Pension Age 55 55 55
Flexi-access Drawdown Yes Yes Yes
Lump Sum (PCLS) 25% 25% 30%
Lifetime Contribution Limit 1m GBP No Limit No Limit
Double Taxation Agreements 133 133 71

*DTA = Double Taxatation Agreement
** There is a 25% exit tax if you move to a QROPS in Malta and do not live in the EEA. There is also a 25% retrospective exit tax if you move out of the EEA in the subsequent 5 years following a pension transfer.

If you want to move a pension to Europe from GBP to EUR, please contact us for advice on transfers.

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