How Emigration Affects UK Pension Rights

Emigration numbers from the UK continue to rise, lending support to the notion that many see life abroad as a feasible and attractive alternative to staying in the UK.  For those weighing up the decision to move abroad there are many factors that must be considered. These will of course vary depending on the circumstances of your departure, but for those considering retirement abroad, the issue of pensions and pension rights is surely chief among them.

Collecting Pensions outside of the UK

At present, you can claim your state UK pension regardless of where you move to, which means you should have no worries about losing your hard earned contributions into the National Insurance pot that you duly paid throughout your working life. 

State Pensions increase each year, but only if you live in:

  • the UK for 6 months or more each year
  • the European Economic Area (EEA) and Gibraltar and Switzerland
  • a country that has a social security agreement with the UK (Australia, Barbados, Bermuda, Canada, Isle of Man, Israel, Jamaica, Japan, Jersey and Guernsey (Channel Islands), Mauritius, New Zealand, Philippines, Republic of Korea, Republics of the former Yugoslavia, Turkey, USA)

You must claim the state pension through the relevant authority of that country. If you have worked or lived in a country not listed above then contact the International Pension Centre.

International Pension Centre


Telephone: +44 (0)191 218 7777
Textphone: +44 (0)191 218 7280
Monday to Friday, 8am to 8pm

Download ‘International claim form’ (PDF, 1MB)

Collecting Pensions in Australia & other Commonwealth countries

The situation is less favourable for those emigrating to Australia, and other Commonwealth and former-Commonwealth nations including Canada, New Zealand, South Africa and India. These nations are included in the UK governments ‘frozen pensions’ policy.

Under the policy, pensions are frozen on the year of emigration, so UK expats can receive their pension, but minus the annual ‘cost of living’ increase. At first glance this may not seem like a serious consideration, but it can have major consequences for those who live abroad for many years.

The case of 100-year old Annie Carr highlights how the frozen pensions policy could impact on those considering emigration. She emigrated to Australia in 1970, and under the frozen pensions policy she can still only claim the £6.12 a week that she was entitled to 42-years ago. Compared to today’s pension, she is losing around £5,000 a year.

Some former Commonwealth countries, including Australia, New Zealand and Canada, offer a means tested relief for pensioners affected by the frozen pensions policy, so it is advisable to check the status of your state pension entitlement for the country you are considering moving to well in advance.

Additional Benefits

There are other advantages to doing your homework in advance of your departure. Some countries have pension rules that allow you to take out far more as a tax-free lump sum than is allowable in the UK. Australia, for example, will allow you to take the lot out in one go, compared to the UK government rule that only allows you to withdraw 25%. However research will pay here, as other countries have stricter rules; Canada doesn’t allow any tax-free withdrawals.

Qualifying Recognised Overseas Pension Scheme (QROPS)

The UK government has a scheme which recognises foreign pension funds and allows them to receive transfers from registered UK funds. To be recognised under the Qualifying Recognised Overseas Pension Scheme (QROPS), foreign pensions must offer the same benefits to non-residents as they do to residents. Foreign pension schemes are looking increasingly attractive for expats, but to benefit you will need to check with HMRC that the pension qualifies as a QROPS.

Nick Branch received his LLB from the University of the West of England in 2004 and is presently studying to become a doctor at King's College London. He is a regular writer for the Solicitors Directory on law topics.