Can I save into a UK pension plan if I live abroad?
UK Pension Abroad
Question:
Can I save into a UK pension plan if I live abroad?Answer:
Yes, you can live abroad and save into a UK pension scheme.
However, there are limits to the tax relief you can claim on your contributions.
If you move overseas, for the next 5 tax years you can still make pension contributions of up to £3,600 a year and get tax relief.
This assumes you have no earnings taxed in the UK. If you continue to have earnings taxed in the UK, tax relievable contributions can be based on these earnings, or £3,600 a year if greater.
The contributions must be made to a pension scheme you were a member of before you left the UK.
What happens after 5 years?
As far as HMRC are concerned, contributions can continue indefinitely after that at any level but with no tax relief.
However, many pension providers won’t accept member contributions that don’t get tax relief, so you would have to stop collecting contributions after 5 years.
If you return to the UK for any time during a tax year, that ‘resets the clock’ for the 5 tax year rule.
I have been abroad for a couple of years already and just found out about this. Can I go back and make up for those missed years?
Unfortunately not. It works on a “use it or lose it” basis. You can take advantage of the allowance for any of the 5 years that you have left though.
Frequently Asked Questions: UK Pensions While Living Abroad
Can I contribute to a UK pension while living abroad?
Yes, you can. For up to 5 tax years after leaving the UK, you can contribute up to £3,600 per year and still receive tax relief, assuming no UK-taxed income. If you have UK-taxed income, your limit could be higher.
Do I need to have joined the pension scheme before leaving the UK?
Yes. To receive tax relief, the pension scheme must be one you were a member of before leaving the UK.
What happens after the 5-year window ends?
You can continue to contribute, but tax relief is no longer available. Some pension providers may not accept non-tax-relievable contributions.
Can I restart the 5-year clock if I return to the UK?
Yes. If you return to the UK during a tax year, the 5-year limit resets from that point.
Can I make up for missed pension contributions from previous years?
No. The allowance operates on a “use it or lose it” basis. Missed contributions cannot be backdated.
Do I need UK earnings to get tax relief on pension contributions?
No, you don’t need UK earnings to get tax relief on the £3,600 annual contribution within the 5-year window after leaving the UK.
Can I contribute to a personal pension or only workplace pensions?
You can contribute to both personal and workplace pensions, as long as the provider accepts contributions from non-residents.
What if I become UK resident again later?
You would regain access to full UK pension contribution limits and tax relief based on your UK income.
Will my pension grow while I’m abroad?
Yes. Pension investments can grow regardless of where you live. However, tax rules may affect withdrawals or charges depending on your residence.
Where can I find more information on expat pension planning?
You can read the full guide here: Expat State Pension Guide.
Ross is a qualified Chartered Financial Planner and Pension Transfer Specialist.
He has been a cross-border financial adviser for 25 years and specialises in helping British expats manage their finances with clarity and peace of mind.
If you would like to have a no strings chat with him, please get in touch.
