The State Pension: A short guide for expats

This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, it is subject to change and we are not responsible for any errors or omissions.

The UK State Pension is typically a crucial part of a British person’s retirement plan. Yet, how does it work for those living overseas? Are you still entitled to a State Pension, and do the rules apply differently to expats?

Below, our financial advisers explain how the State Pension works in the 2024-25 tax year, some of its key benefits and issues to consider, and how it can be integrated effectively into a wider retirement plan. We hope these insights are useful.

If you want to discuss your financial plan with a member of our team, please get in touch to arrange a no-obligation financial consultation at our expense:

+34 966 460 407

The State Pension: an overview

There are many different types of pensions in the UK. One type is the “defined contribution” pension (i.e. a pension “pot”). Here, you can join an employer’s existing scheme or open a private pension of your own.

Another type of workplace pension is the “final salary” (or defined benefit) pension. This is increasingly rare today. However, certain public services – e.g. teaching and the police – still offer it. Here, your employer pays out a guaranteed income once you retire.

The State Pension is separate from these schemes. It is an income from the UK government that you can claim once you reach your State Pension age (66 for men and women in 2024). The income you are entitled to is largely based on your National Insurance (NI) record.

To get the full new State Pension, an individual needs 35 “qualifying years” of NI contributions on their record. In 2024-25, this provides £221.20 a week (£11,502.40 per year). You need at least 10 years on your record to receive anything at all.

How does the State Pension work for expats?

There is good news. If you move overseas (e.g. to retire) in 2024, you do not lose your State Pension. Your NI record is not affected and you can still claim your income once you reach your State Pension age.

However, there are specific issues to be aware of. Firstly, expats are not guaranteed a rising State Pension income under the “triple lock” system. In 2024-25, the triple lock raises the State Pension by at least 2.5% per year, to help retain its spending power as prices rise (due to inflation). However, expats only get this benefit if they live in certain countries:

  • the European Economic Area (EEA)
  • Gibraltar
  • Switzerland
  • Countries that have a social security agreement with the UK (but you cannot get increases in Canada or New Zealand)

Secondly, you need to decide how you will receive your State Pension if you live overseas. One option is to simply direct it into a UK bank account and make ATM withdrawals from local cash machines in your host country.

Alternatively, you can request for your State Pension to be paid into a foreign bank account, in the local currency. Both options have their respective pros and cons. It can help to speak with a specialist financial adviser who works with British expats, to set up an optimal structure.

Building a retirement plan as an expat

When you move overseas, it is vital to consider how your finances may be affected in later life. For instance, if you are still working through your career, how could your State Pension be affected? A local employer in a foreign country is unlikely to pay NI contributions like a UK employer would under the PAYE system.

One option is to examine your NI record on the UK government’s website before embarking overseas (or after you relocate). If you have already accumulated 35 qualifying years of NI contributions, then your record is complete. However, if you still need to accumulate more qualifying years, it might help to explore your options with a financial adviser.

For instance, certain expats might benefit from making voluntary NI contributions to “top up” incomplete years on their NI record. In 2024-25, there is a unique window of opportunity to do this. Normally, you can only go back seven tax years to “plug gaps” in your NI record. However, until 5 April 2025, you can go as far back as 2016-17.

Whilst the State Pension is important, it cannot usually provide for a British person’s full retirement income needs. Typically, additional retirement savings will be required to support your lifestyle over many years (e.g. ISAs and defined contribution pensions). These additional schemes also raise questions for expats. For instance, should you take your pension “with you” when retiring overseas? Or, should you keep the scheme in the UK? Again, a financial adviser can assist with discerning the best answers to these questions in your specific case.


If you are interested in discussing your own financial plan or inheritance tax strategy with us, please get in touch to arrange a no-commitment financial consultation at our expense:

+34 966 460 407

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