UK Pensions for British Expats in Dubai: 2026 Guide

📚 Financial Guidance for British Expats in Dubai

This series provides clear, practical guidance for British expats living in Dubai—or planning a future move. From residency and tax rules to pensions, QROPS, retirement visas, property, and succession planning, these articles help you navigate the financial complexities of life in the UAE and beyond.

Financial Advice for British Expats Living in Dubai (2026 Guide)
Why Are So Many Wealthy Brits Moving to Dubai?
Unlocking the Benefits of the Dubai Retirement Visa
UK Tax Residency Rules for Brits Living in Dubai
UK Pensions & QROPS for British Expats in Dubai
Moving to Dubai from the UK: A Financial Planning Checklist (Coming Soon)
Property & Inheritance Planning for British Expats in Dubai (Coming Soon)
Returning to the UK from Dubai: What Happens to Your Finances? (Coming Soon)

TL;DR

Living in Dubai can make UK pension income highly tax-efficient, but the rules do not stop just because you’ve moved abroad. How and when you contribute, access, or transfer your pension depends on your UK residency status, the five-year non-residence rules, the UK–UAE tax treaty, and your long-term plans to return to the UK or retire elsewhere. Done properly, UK pensions can work extremely well for Dubai-based expats; done casually, early or poorly timed decisions can create irreversible tax, inheritance, and cashflow problems later on.

UK Pensions for British Expats in Dubai

How to protect, access and structure your UK pension tax-efficiently in the UAE

Living and working in Dubai can feel like stepping outside the UK tax system entirely.

No income tax.
No capital gains tax.
No inheritance tax (locally, at least).

But when it comes to UK pensions, the rules do not stop just because you have moved to the Gulf.

For many British expats in Dubai, pensions are their largest single financial asset — and one of the easiest areas in which to make expensive, irreversible mistakes.

This guide explains how UK pensions work once you are living in Dubai, what changes, what does not, and how to structure things sensibly.

Why UK Pension Planning Changes When You Live in Dubai

When you relocate to Dubai, three things change at once:

You are often no longer UK tax resident
You are living in a zero-tax jurisdiction
Your long-term future may involve returning to the UK or retiring elsewhere

UK pensions sit right at the intersection of those three factors.

Some pension decisions look highly tax-efficient today but quietly create problems later — especially if you return to the UK, move to Europe, or pass wealth to family.

Good pension planning in Dubai is not about “doing nothing because it’s tax-free”. It is about planning across borders and across time.

The Types of UK Pensions You Might Hold

Most British expats in Dubai will have one or more of the following:

Defined Contribution pensions

Personal pensions
SIPPs
Workplace defined contribution schemes

These are flexible, pot-based pensions — and where most planning opportunities (and mistakes) arise.

Defined Benefit (final salary) pensions

Often from public sector or older corporate schemes
Provide a guaranteed income at retirement
Less flexible, but often extremely valuable

UK State Pension

Based on your National Insurance record
You can still build entitlement while living in the UAE

Each type behaves differently once you are non-UK resident and needs to be considered separately.

Making Additional Pension Contributions While Living in Dubai (The First 5 Years)

Many expats assume that once they leave the UK, pension contributions must stop.

That isn’t quite true.

The 5-year contribution window

If you become UK tax non-resident, you can usually continue contributing to a UK pension
for up to five full UK tax years after leaving the UK and still receive
UK tax relief — even while living in Dubai.

Key points:

Contributions must be made to an existing UK pension
If you have no UK earnings, you can still contribute up to £3,600 gross per tax year (£2,880 net plus tax relief)
If you do have UK-taxed earnings, higher contributions may be possible

This five-year period is effectively a “use it or lose it” window.

Once it closes:

You may still be able to contribute
But without UK tax relief

Missed years cannot be backdated.

For many expats in Dubai, this is a useful — and all too often overlooked — planning opportunity.

UK State Pension Considerations When Living in the UAE

If you’re living in Dubai, the UK State Pension is easy to ignore — but doing so can be an expensive mistake.

How the UK State Pension works for expats

Your UK State Pension is based on your National Insurance (NI) record.

Under the current system:

You need 35 qualifying years for the full UK State Pension
Fewer years means a permanently reduced pension
Once you leave the UK, NI contributions typically stop unless you take action

Can you keep building your State Pension while living in Dubai?

Yes — but only if you actively choose to.

Most British expats in Dubai can make voluntary National Insurance contributions to keep their record building.

Up until April 2026, you may be able to do this by making Class 2 contributions. At £3.45 per week, these are very cheap and represent excellent value.

After April 2026, most expats will only be able to make Class 3 contributions.

While these are more expensive (£17.75 per week), they are still often worth considering when you look at the lifetime value of the additional State Pension they can secure.

A practical takeaway

If you’re living in Dubai and still years away from retirement:

Check your National Insurance record
Understand how many qualifying years you already have
Decide whether voluntary contributions make sense
Treat the State Pension as a foundation, not an afterthought

🔗 Check your state pension forecast here

For many expats, a modest, well-planned NI contribution strategy can deliver one of the best risk-adjusted returns available anywhere.

Can You Access Your UK Pension While Living in Dubai?

Yes — you can access your UK pension while living in Dubai, but the tax outcome depends on
the type of pension and your residency status at the time of withdrawal.

Let’s keep this clear and practical.

When can you access it?

Most UK private pensions (personal pensions, SIPPs, and workplace defined contribution schemes)
can usually be accessed from:

Age 55 (rising to 57 from 2028)
Up to 25% available as a tax-free lump sum under UK rules

The remaining withdrawals may be taxable — but where they’re taxed is the crucial point
for Dubai-based expats.

How the UK–UAE Tax Treaty Applies

Under the UK–UAE double tax treaty, the general rule is simple:

👉 Private pensions are taxable only in the country of residence

If you are:

UK tax non-resident
Tax resident in the United Arab Emirates

then most UK private pensions fall to the UAE for taxing rights.

Because the UAE does not levy income tax, this often means that no tax is paid at all on those pension withdrawals.

This is one of the main reasons Dubai is so attractive for pension planning — when structured correctly.

🔗 Link to the UK–UAE double tax treaty

Important Exceptions to Understand

Not all pensions follow the same treaty rule.

UK government and public service pensions

Typically remain taxable only in the UK, regardless of residence
Includes many civil service, military, police, and similar schemes

These pensions should always be planned for separately from private pensions.

Administration vs Entitlement (A Common Trap)

Even where the treaty gives taxing rights to the UAE, UK pension providers often default to deducting PAYE

You may need to:

Confirm non-UK residency
Submit treaty or NT (no tax) paperwork
Reclaim tax initially deducted

This is an administrative issue, not a contradiction of the treaty — but it regularly catches expats out.

🔗 Guide to applying for an NT code

Don’t Fall Foul Of The 5-Year Rule (Often Overlooked)

A common mistake British expats in Dubai make is assuming that once they leave the UK, HMRC immediately stops applying UK pension rules.

In reality, there is a five full UK tax year monitoring period after you become non-UK resident.

During this time, certain pension actions can still fall within the scope of UK tax rules, even if you are living in Dubai.

This rule exists to prevent people from leaving the UK briefly to take pension benefits tax-free and then returning shortly afterwards.

The result is that timing matters just as much as the decision itself.

Two expats living side-by-side in Dubai can take the same pension action — and face very different UK tax outcomes — depending on when they left the UK and whether the five-year period has fully elapsed.

If you left the UK recently, or expect to return in the future, this rule is particularly important.

👉 You can read a fuller explanation of how this works, including practical examples, in my detailed guide to UK temporary non-residency rules here.

Bottom Line on Access

If you are genuinely long-term non-UK resident and living in Dubai:

Most private UK pensions can be accessed while you live in Dubai
Taxing rights usually sit with the UAE
Which often results in tax-free pension income

But timing, structure, and paperwork all matter.

Can You Transfer Your UK Pension to a QROPS in the UAE?

Short answer: no — you cannot transfer a UK pension to a QROPS in the UAE.

Despite how often this is suggested online or in expat forums, the UAE does not have any UK-recognised QROPS (Qualifying Recognised Overseas Pension Schemes).

Why QROPS Don’t Exist in the UAE

To qualify as a QROPS, a pension scheme must:

Be based in an HMRC-recognised jurisdiction
Meet strict UK benefit and reporting rules
Remain under HMRC oversight

The UAE does not operate pension schemes that meet these criteria.

As a result:

There are no legitimate UAE QROPS
You cannot move a UK pension into a UAE structure
Any arrangement claiming otherwise should be treated with extreme caution

Practical Pension Planning Steps for Dubai Expats

Good pension planning doesn’t need to be complex — but it does need to be intentional.

Most Dubai-based expats benefit from stepping back and approaching pensions methodically, rather than reacting to tax headlines or expat folklore.

Get clarity first

Start by understanding what pensions you actually hold. The type of pension, how it is invested, and what charges apply will shape every later decision.

Avoid reactive withdrawals

“Tax-free in Dubai” does not mean “safe to withdraw immediately”. Early pension decisions are often irreversible, and mistakes made in the first few years abroad can be difficult or impossible to unwind later.

Plan in chapters

Effective planning recognises that your life may span multiple phases — living in Dubai today, a potential return to the UK, retirement elsewhere, and eventual estate and inheritance planning.

Coordinate pensions with investments

Pensions should not be viewed in isolation. Offshore investments, cash holdings, and pension assets need to work together, rather than overlap or quietly create future tax problems.

Keep records and evidence

For expatriates, HMRC focuses heavily on timing, intent, and evidence. Clear records support your position if questions arise years later.

The Risks of Unrecognised Transfers

If a UK pension is transferred to a non-QROPS arrangement, HMRC can impose tax penalties of up to 55% of the pension value.

What Can You Do If You Already Have a QROPS?

Some Dubai expats already hold a QROPS — often set up before moving to the UAE, commonly in jurisdictions such as Malta or Gibraltar.

This is not necessarily a bad thing, but it does mean the structure should be reviewed carefully.

Important considerations include:

A QROPS does not need to be closed simply because you live in Dubai
Tax treatment depends on where the QROPS is based
Your country of tax residence
How and when benefits are taken
The 5-year and 10-year HMRC reporting rules
Future moves, including returning to the UK or retiring elsewhere, which can materially change the outcome

In some cases, an existing QROPS still makes sense.

In others, it may introduce unnecessary cost, complexity, or loss of protection compared to a UK pension.

The key issue isn’t where the pension sits — but how well it fits your long-term plans.

🔗 Are QROPS Still Suitable in 2026?

Case Study: A British Expat in Dubai — When “Tax-Free” Isn’t the Whole Story

James is 58, married, with three financially independent adult children.

He has been living and working in Dubai for just over five years and is planning to retire back to the UK within the next two to three years.

On paper, his position looked strong.

He held multiple UK pensions (including workplace schemes and a SIPP), with a total value just over £1 million, had no immediate need for income, and a clear intention to return to the UK for retirement.

Like many long-term Dubai expats, James assumed his pension decisions were now largely “de-risked” from a UK tax perspective.

The Trigger Point

During a routine review, James discovered something important.

He was now fully outside the UK’s five-year temporary non-residency window.

In principle, he could withdraw 100% of his UK pension funds while living in Dubai.

Under the UK–UAE double tax treaty, those withdrawals could potentially be received with no income tax.

At first glance, this sounded like an obvious win.

The Risks Beneath the Surface

A deeper review revealed several important — and conflicting — considerations.

First, pension inheritance tax changes from April 2027.

From April 2027, unused UK pension funds are expected to fall within the scope of UK inheritance tax.

James naturally asked whether it made sense to withdraw everything before those rules take effect.

However, this raised a critical counter-risk.

The estate problem.

While pension funds normally sit outside your estate for UK IHT, once money is withdrawn it becomes part of your personal estate and is immediately exposed to 40% inheritance tax on death.

If James withdrew everything and died before implementing proper estate planning, his family could be left worse off than if the pensions had remained untouched.

In other words, withdrawing early to “avoid future IHT rules” could actually accelerate an IHT problem.

Why an NT Tax Code Mattered

Even though the treaty position was clear, there was still a practical issue.

UK pension providers normally deduct PAYE by default unless an NT (No Tax) code is in place.

Securing the NT code before drawing funds prevented unnecessary tax deductions, avoided later reclaims, and ensured withdrawals reflected the correct treaty position from day one.

The Planning-Led Solution

Rather than withdrawing everything immediately, James took a measured, staged approach.

Withdrawals were phased, not rushed. Only amounts needed for near-term planning were drawn.

Remaining pension funds stayed protected outside his estate, preserving flexibility for his wife and children while planning for his return to the UK.

The Outcome

By slowing down and sequencing decisions correctly, James was able to benefit from Dubai’s tax efficiency without creating new estate risks.

He avoided unnecessary UK tax deductions, prepared calmly for the April 2027 pension changes, and returned to the UK with clarity rather than complexity.

Final Thought

Dubai can be one of the most tax-efficient places in the world to manage UK pensions — but only if decisions are made with the full picture in mind.

The most common mistakes I see are:

Assuming “no tax” means “no planning”
Making irreversible decisions too early
Ignoring future residency and inheritance consequences

Handled properly, UK pensions can be a powerful, flexible foundation for British expats in Dubai.

Handled casually, they can become a very expensive surprise later on.

Talk to an Expert

UK pensions can become exceptionally tax-efficient for British expats living in Dubai — but only when decisions are made with a clear understanding of UK rules, treaty protection, timing, and long-term plans. Many of the most expensive mistakes I see happen when people assume “tax-free in Dubai” means “nothing else matters”.

I’m Ross Naylor, a UK-qualified Chartered Financial Planner with nearly 30 years’ experience helping British expats in Dubai protect, access and structure UK pensions in a way that works both now and in the future — including potential returns to the UK or retirement elsewhere.

I firmly believe your location in the world should never be a barrier to expert, impartial and transparent financial advice you can trust.

If you’re unsure whether to leave your UK pension untouched, make additional contributions, draw income while overseas, review an existing QROPS, or plan around the five-year and inheritance tax rules, I can help you step back, sequence decisions properly and avoid irreversible pension mistakes.

Book a confidential consultation