British Abroad

There’s a lot of different advice for expats with UK work and private pensions. Google it and you might get lucky with a company (or not).

If you ask ChatGPT, there might be some quality advice on the basics, but after 10 minutes they cite an advisor who will recommend the opposite, or take your money and run.

What are we really looking for?

• what your current position is,
• who to trust for financial advice,
• what your options are, and the real, cash-value cost or benefit of these decisions

The boiler rooms and sharks have almost destroyed the International Financial Advisory industry’s reputation but thankfully, I know there are still good financial advisors for us out there.

So we’ve partnered with advisors who understand that listening, understanding, and only then helping the client meet their goals is the best approach for everyone.

Things have changed a lot about UK pensions for expats, especially in the past decade. Even requesting information about your own account is a hassle.

Many people have just lost touch or been ignored. It’s the reality of living overseas.

There isn’t a handbook for all of this. There can’t be because everyone has their own goals and ambitions in hundreds of countries.

Maybe you got letters but are still confused, asking ‘how much do I actually have?‘ or ‘where did all my money go?‘ and ‘what about my old employer?’

If it is tough to even access your assets, how can we begin to understand our options? Nevermind ensuring they grow well as investments, which is what we’re hoping for at retirement.

Don’t forget the State Pension too. Buying back years is by far the highest return on investment for retirement.

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1. Common Issues

1. Too many pots, too little clarity.
You may have pensions scattered across multiple jobs back in the UK. Many expats don’t even remember all the schemes they were enrolled in, let alone how to access them. That’s a problem.

2. Lost growth potential.
A pension pot left unmanaged could be sitting in low-performing funds, racking up fees and doing little to grow. Worse still, your provider might not even allow you to manage it now that you’re non-resident.

3. No idea what to do with it.
Drawdown? Annuity? Transfer abroad? What about tax implications in your new country? These questions can’t be answered by guesswork. If you don’t know the answers already, you need a professional.

4. Dodgy advice and scammy providers.
Unfortunately, expats are prime targets for financial cowboys. Unregulated SIPP providers and shady schemes who charge high fees, or even vanish with your funds.

5. Legalese and red tape.
Even if you wanted to act, the paperwork alone can be enough to put you off. Pensions are filled with acronyms and fine print, and one wrong move could mean hefty tax penalties.

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2. What You Can Do

Despite the challenges, there are clear paths you can take, but options are being limited every year by new government regulations:

A) Keep it in the UK

If you’ve got a UK pension (i.e. most workplace, personal / private pensions), you can leave it in the UK and normally start claiming at age 55 (rising to 57 in 2028).

You’ll probably get:

• A 25% tax-free lump sum (based on current UK rules)
  • Additional lump sum withdrawals can be restricted or taxed heavily
  • Regular payments will be taxable, depending on your local country’s tax treaty with the UK.

⚠️ Warning:

• Providers and schemes treat expats differently (if you’re no longer ‘UK resident’)
  • Some freeze access or require specialised advisors just to gain access to your own records

Drawing income from the UK to your local bank account can also get complicated (and expensive) tax-wise.

Get connected to a qualfied and experienced advisor for help

B) Transfer abroad (Act fast, but be cautious)

Depending on your situation, you could move your pension(s) out of the UK. It can be a good option if:

• You need flexible or product options that align with your financial and life plans
• You speak to an advisor who can explain everything clearly so you make the decision, not them
• You understand the fees and tax implications
• You know about the recent changes and upcoming plans.

2.1 You Can Consolidate Pensions for Easier Management

It’s encouraged now to combine multiple UK pension pots into a single scheme in the UK, but a SIPP (Self-Invested Personal Pension) can make things easier to manage and often reduces admin costs.

Not all SIPP providers are equal, but we can connect you with those who can help. Some may limit fund access or provide inadequate customer service.

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3. Don’t put off dealing with your pensions

It’s much easier to put it off than deal with trustee and government forms, currency transfers and advisor fees.

But here’s what can go wrong:

• You lose track of your money. Unclaimed pensions sit idle, eaten by fees or invested poorly.
• You miss growth opportunities. A few thousand pounds a year in extra growth adds up over decades.
• You risk tax penalties. Mishandling transfers or drawdown can cost you thousands.
• You leave your dependents in limbo. If something happens to you and your pensions aren’t in order, your spouse or children may face a nightmare trying to claim anything.

4. Do Something – Get Real UK Expat Pension Advice

You’ve worked hard, built up pensions across your career, and now live abroad (or plan to).

Private pensions can work brilliantly for expats, if you take some time to understand what you’ve got, what you need, and who can help you take control and maximise your income and secure the future of your family.

5. Practical Steps to Take Today

Step 1: Track Down Every Pension You Have

Collate your old documents and get help to find old workplace pensions.

Once you’ve got a list, write down:

• The provider
• Type of pension (defined contribution or final salary)
• Estimated value
• Fees and charges
• Whether they’ll allow access from abroad

Step 2: Assess Whether You Want to Transfer or Consolidate

If you’ve got more than 2–3 private pots, it’s probably worth merging. But any option including transfers should consider:

• Exit fees
• Loss of benefits (e.g. guaranteed annuity rates)
• Whether your chosen provider accepts non-UK resident transfers

Step 3: Review Investment Performance

Many people discover their pensions are sitting in “default” funds. Low growth and high fee setups set automatically.

A decent advisor will look at:

• Asset allocation (bonds, equities, etc.)
• Set-up, management and product fees
• Currency exposure (if you’ll retire outside the UK)

Even a small improvement in net annual returns: say from 6% to 9% means tens of thousands more upon retirement.

Step 4: Consider a Regulated SIPP Provider

If you’re hands-on and want better control, a SIPP might work. But:

• Stick to FCA-regulated firms
• Avoid platforms based in tax havens
• Double-check they accept expats

Some UK-based SIPPs do cater for expats but often require you to work with a UK-qualified advisor.

Step 5: Don’t Do It Alone

You want someone who:

• Is regulated by a recognised Financial Services Authority
• Has many years of experience working with British expat clients
• Is transparent about their practices, policies and fees
• Doesn’t push products with fat commissions

A good advisor will help you:

• Help track down and assess all your pensions clearly
• Understand your options after the analysis and fact-finding – your retirement plans, risk-profile, beneficiaries etc.
• Avoid nasty tax surprises in both countries (UK and abroad)
• Build a plan that ensures you and your family are covered for generations

6. What to Watch Out For (Red Flags)

1. Unreputable and pushy salespeople.
If you encounter a cold-caller forcing meetings or pushing products without asking questions about your situation, avoid them.

A good advisor’s reputation and recommendations mean clients want to work with them. They should be able to provide evidence to back up their client success.

2. Misunderstanding your risk profile.
Long-term investments usually provide high returns, even with market instabilty, but someone closer to retirement might value lower-risk investments.

3. Pressure to act quickly.
You should never be rushed into a decision about your life savings.

But taking the first step is important in speaking to someone that could help.

4. High ongoing fees (>1% annually).
These can quietly eat away at your returns. Good advisors will make their fees clear and factor them in to your Return on Investment (ROI).

5. Unregulated firms that cannot be verified independently or provide due diligence upon request.
If anything goes wrong, even if you can pursue legal recourse, it will cost you.

All of British Abroad’s advisors are regulated, experienced and qualified to provide advice to expats.