Resources & Insights

International Pension Planning: 2025 Outlook and Trends

By QROP Direct Editorial Team · Reviewed by an independent regulated pension specialist · Reviewed 2026-06-10

International Pension Planning: 2025 Outlook and Trends

Executive Summary

The international pension planning landscape for UK expats has undergone its most significant transformation in a decade. The abolition of the Lifetime Allowance in April 2024, the subsequent Autumn Budget reform of the Overseas Transfer Charge in October 2024, and the continuing evolution of the QROPS market have collectively redefined the planning framework for UK nationals living abroad.

This white paper provides an in-depth analysis of these changes, their practical implications for different categories of expat, the current state of the QROPS and international SIPP markets, and the outlook for the next three to five years.

This paper is for information purposes only and does not constitute financial, tax or legal advice. International pension planning is highly individual. Always take regulated specialist advice.

1. The Post-LTA Planning Framework

1.1 The LTA Abolition and Its Successor Structures

The Lifetime Allowance (LTA) — which had stood at £1,073,100 since April 2020 — was abolished with effect from 6 April 2024 under the Finance (No.2) Act 2023. This was the most fundamental change to UK pension tax legislation since the 2006 simplification reforms that introduced the LTA.

Under the replacement framework:

Lump Sum Allowance (LSA): £268,275 The maximum total of pension commencement lump sums (PCLS) and other qualifying lump sums that can be received tax-free across all UK pension schemes in a lifetime.

Lump Sum and Death Benefit Allowance (LSDBA): £1,073,100 The combined limit for all tax-free lump sums (including death benefit lump sums) across all schemes. Notably, this is equivalent to the old LTA — ensuring that the effective ceiling on tax-free lump sum extraction remains similar for most members.

Income in drawdown: There is no longer an LTA charge on pension income drawn through drawdown. Under the old regime, members who had crystallised benefits above the LTA paid a 25% LTA charge on the excess designated to drawdown. This charge is gone. Large pension pots can now be drawn down as taxable income without an additional LTA surcharge.

1.2 Implications for High-Value Pension Holders

For UK expats with large pension pots, the LTA abolition has produced three significant planning changes:

First, the death benefit position has improved dramatically. Under the old LTA regime, death benefit lump sums from large pension pots were subject to a 55% LTA charge on amounts above the LTA. Under the new regime, amounts above the LSDBA are subject to income tax in the beneficiary's hands — at the beneficiary's marginal rate, not a flat 55%. For beneficiaries on lower or nil income, this is substantially better.

Second, the previously prevalent "crystallise early" strategy is less relevant. Under the old regime, members sometimes crystallised benefits strategically to "bank" a lower LTA value. This is no longer necessary since there is no LTA charge on drawdown.

Third, the annual allowance planning is unchanged. The annual allowance (£60,000 in 2026) continues to govern contributions. The LTA abolition does not increase the contribution ceiling.

2. The Overseas Transfer Charge: Reform and Market Impact

2.1 The October 2024 Changes

The Autumn Budget 2024 announcement was the most significant change to QROPS planning since the OTC was introduced in March 2017. From 30 October 2024, the EEA blanket exemption — which had allowed members to transfer to EEA-jurisdiction QROPS (including Malta, Gibraltar, and other member state schemes) without the 25% OTC, regardless of the member's country of residence — was removed (Source: HM Treasury, Autumn Budget 2024, gov.uk, 2024).

The OTC exemptions that remain:

1. Residency match: The member is tax resident in the same country as the QROPS at the time of transfer
2. Employer arrangements: The QROPS is an occupational scheme of the member's employer
3. Specific death benefit transfers

The practical effect has been to redirect QROPS planning toward "country of residence" structures. Members who are resident in Malta can transfer to a Malta QROPS without OTC. Members who are resident in Gibraltar can transfer to a Gibraltar QROPS without OTC. Members who are resident in neither jurisdiction face the 25% OTC charge.

2.2 Market Implications

The change has had a significant impact on the QROPS market:

Decline in EEA-jurisdiction QROPS transfers for non-residents. Malta and Gibraltar were previously favoured not just by residents of those countries, but by expats across the EU and beyond, attracted by the favourable DTA position and the pre-existing regulatory infrastructure. With the EEA exemption removed, this arbitrage is closed.

Growth in jurisdiction-matched QROPS. For expats with clear long-term residence intentions in a QROPS jurisdiction, the market has adapted. Malta's QROPS providers have seen growth from Malta-resident clients. UAE-registered QROPS have seen consistent demand from UAE-resident UK expats, who continue to benefit from the residency match.

International SIPP as default for uncertain residency. For expats who are uncertain about long-term residence, the removal of the EEA exemption has reinforced the UK SIPP as the appropriate default structure. An international SIPP imposes no OTC, retains full HMRC pension tax protections, and remains accessible regardless of where the member eventually retires.

2.3 The 5-Year Clawback Position

The 5-year OTC adjustment mechanism (under which OTC-exempt transfers attract a clawback if the member leaves the QROPS jurisdiction within 5 years) continues to apply. This creates a post-transfer residency commitment that members must take seriously.

For members who took OTC-exempt transfers before October 2024 under the EEA exemption and subsequently changed residence, the 5-year clawback position should be confirmed with specialist advice.

3. The International SIPP Market

3.1 Market Overview

The international SIPP market has grown substantially over the past decade, driven by:

• Growth in long-term UK expat populations, particularly in the EU, UAE, Singapore, and Australia
• Increased financial literacy among expat communities
• The proliferation of digital SIPP platforms that make remote account management practical
• The post-Brexit clarity that UK financial services can continue to serve EU-resident clients through their UK FCA authorisation (for UK-registered products)

Estimates of the total value of UK pension assets held by non-resident UK nationals are not published by HMRC, but the growth in international SIPP administration businesses — particularly in providers such as Novia Global, Curtis Banks, and specialist international providers — indicates a substantial and growing market.

3.2 Platform Evolution

Modern international SIPPs have evolved significantly from earlier generations:

Digital portals: Most leading platforms now provide full online account access, allowing members to view valuations, execute investment trades, and manage drawdown instructions from any jurisdiction without paper forms.

Currency flexibility: Platforms offering multi-currency accounts, currency conversion within the SIPP, and the ability to hold assets denominated in multiple currencies have become standard in the international segment.

Investment breadth: Access to global equity ETFs, bond funds, and multi-asset portfolios — often through a broad range of fund managers — allows expats to build diversified, appropriately risk-profiled portfolios within the tax wrapper.

Pricing transparency: Regulatory pressure has improved fee disclosure significantly. The all-in cost of a SIPP — including platform fee, administration fee, and investment OCFs — is now typically disclosed clearly in the key features document.

3.3 Pricing Trends

SIPP charges have generally trended downward for mainstream DC portfolios, as platform competition has intensified. Annual management charges for platforms have compressed from 0.5%–0.75% per year in 2015 toward 0.25%–0.45% for most fund sizes at leading providers in 2026.

However, international SIPP platforms typically charge more than domestic UK platforms due to the compliance overhead of serving non-resident members (FATCA/CRS reporting, country-specific compliance). The additional cost of international servicing is typically 0.1%–0.2% per year over equivalent domestic platforms.

For members with large funds (above £500,000), platform fees increasingly cap out or operate on a tiered basis — reducing the percentage fee significantly for larger balances.

4. Key Trends in Cross-Border Retirement Planning

4.1 The Growing Importance of DTA Planning

As pension wealth has grown for the baby boomer generation, the tax treatment of pension income in retirement has become more significant — not just the UK tax treatment, but the tax in the country of residence.

For expats retiring in EU countries, the standard DTA treatment typically taxes UK private pension income in the country of residence and UK government service pensions (NHS, armed forces, civil service) in the UK only. The practical difference for someone with both NHS and private pension income can be significant.

NHR in Portugal was a prominent example — providing a 10-year period of preferential tax treatment, including potential zero Portuguese tax on UK pension income under the relevant DTA. The NHR regime has been modified (from 2024, the replacement IFICI regime applies to new arrivals), but the principle of jurisdiction-selection for tax efficiency remains highly relevant.

4.2 Inheritance Tax and Pensions Post-2027

The government announced in Autumn Budget 2024 that pension death benefits will be brought within the inheritance tax framework from April 2027. For expats with large pension pots who have relied on the pension as an IHT-efficient vehicle for wealth transfer, this change requires significant re-planning.

The detail of the 2027 IHT changes has not been fully confirmed at the time of writing. However, the direction is clear: pensions that were effectively IHT-exempt will become at least partially subject to IHT. This creates an incentive to revisit pension nomination of beneficiaries, and in some cases to consider whether drawing down and gifting from the pension (using the 7-year gift rule) is more tax-efficient than holding pension wealth for eventual death benefit.

4.3 State Pension Uprating and Frozen Countries

The UK State Pension continues to be subject to the "frozen" uprating issue for expats in approximately 150 countries where the pension is not uprated annually. Expats resident in the US (until recently), Australia, Canada, New Zealand, South Africa, and many other countries receive a pension frozen at the rate it was when they first became entitled.

For those in EU countries, the pension is uprated. For those in countries with a UK social security agreement that includes uprating provisions, the pension is uprated.

The political question of whether to extend uprating universally has been discussed periodically but has not been legislated. The cost of universal uprating is estimated at several hundred million pounds annually.

For long-term expats in frozen countries, the impact on retirement income is substantial. Someone who left the UK in 2000 with a State Pension of £4,000/year would still be receiving £4,000/year in 2026, while a UK resident would receive significantly more due to annual triple lock increases.

5. The Regulatory Outlook

5.1 FCA Pension Transfer Regulation

The FCA has continued to tighten the regulatory framework for pension transfer advice. The proportion of DB transfer advice that the FCA assesses as unsuitable has remained a concern, with periodic thematic reviews identifying issues.

The direction is toward more prescriptive requirements, greater supervision of firms giving high volumes of transfer advice, and potential further restrictions on commission-adjacent fee structures that create transfer incentives.

For members: the regulatory environment makes it increasingly difficult for unsuitable transfer advice to remain unexposed, and the FSCS backstop provides some protection if firms providing unsuitable advice later become insolvent.

5.2 HMRC QROPS Regulation

HMRC continues to maintain and update the ROPS list, removing schemes that fail to meet the conditions for recognition. The conditions for a QROPS include requirements that the scheme is open to residents of the jurisdiction (not exclusively to overseas nationals), that the scheme imposes pension age restrictions consistent with UK principles, and that the scheme reports as required.

Periodic HMRC campaigns targeting QROPS providers that have issued non-compliant benefits or failed to report within the 10-year window have resulted in scheme removals and member tax charges.

Key lesson for members: Always check the current ROPS list immediately before transfer. A scheme can be removed between when advice was given and when the transfer completes.

6. Conclusion and Outlook

The international pension planning landscape in 2025–26 is more complex, more regulated, and more nuanced than it was five years ago. The LTA abolition has simplified some planning for large pension holders. The OTC reform has made QROPS planning more targeted. The international SIPP market has matured significantly.

For UK expats, the overarching themes are:

1. Jurisdiction selection matters — both for QROPS OTC eligibility and for long-term tax treatment of pension income in retirement
2. SIPP is the default for uncertain residency plans — QROPS is suitable for those with a clear, long-term commitment to a specific jurisdiction
3. DB pensions are almost always worth keeping deferred — the post-LTA framework changes this analysis marginally, but the core conclusion stands
4. Early planning is more valuable than late correction — the compounding of good pension decisions over decades far exceeds any gains from optimising late in the planning process

Neil Robbirt, Chairman of Global Investments Group, has observed that the 2024–26 regulatory changes represent a genuine reset moment for the international pension planning industry. In his assessment, the LTA abolition and the OTC reforms have collectively removed the distortions that drove some of the most problematic planning behaviour of the previous decade — large pots being transferred purely to avoid an LTA charge, or EEA QROPS being used by individuals with no genuine intention of retiring in those jurisdictions. The result is a planning environment that rewards genuine long-term retirement strategy over tax-driven structuring. That is a better outcome for UK expats and for the credibility of the broader industry.