Pension payment access after retiring overseas

Retiring overseas after a lifetime of work is an exciting possibility and a fresh new start to a new phase in your personal history.

Like all other major lifestyle changes, retirement overseas needs a deal of meticulous planning, especially as regards receiving your pension. In general, there’s no problem accessing your pension once you’re overseas, although you’re likely to lose a small amount due to money transfer fees and the full amount will be subject to occasional fluctuations in currency exchange rates.

The majority of occupational pension schemes don’t sent money straight to overseas accounts, so keeping your home country account open to receive monthly payments is necessary. Once you’ve an account at a bank in your new country, transferring your pension payments is straightforward. If you’ve chosen a retirement destination with a cheap cost of living, money transfer charges and even currency fluctuations shouldn’t result in a hole in your monthly budget as it doesn’t’ affect your disposable income as it would have in a country with high living costs.

If you’re non-domiciled and non-resident in your country of birth, your pension payments will be tax-free once they’re accessed overseas. If you’ve moved to a European Economic Area country, you may be able to access benefits such as reduced tax liabilities on wealth transfers. Checking with the relevant tax authority as regards your actual tax status might well give a pleasant surprise, and ifyou’ve converted your private or company pension to a QROPS, checking your position with a qualified, registered financial advisor is the way forward.

One thing to take into account when deciding on a retirement destination is whether or not your UK state pension will be frozen from the moment you leave Britain. The list of excluded counties is long and includes well-known expat hubs such as Australia and Canada. At present, annual UK pension increases are paid in EU member states as well as EEA countries, with the future position post-Brexit not officially clarified as yet.