Resources & Insights

Spring Statement 2026: Pension Changes and What Expats Need to Know

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

Spring Statement 2026: What Changed, What Stayed the Same, and What Expats Must Do Next

The Spring Statement 2026, delivered in March, was a deliberately low-key fiscal event. Unlike the autumn Budget — the government's main fiscal set-piece — the spring update contained no major pension tax or policy changes. For UK nationals living abroad, however, even a quiet statement matters: it confirms the settings that apply for the new tax year and leaves in place a series of significant changes that are now approaching fast.

A quick note on terminology: the spring fiscal event is formally the Spring Statement, not a Budget. The main pension-relevant announcements of the past year were actually made at the Autumn Budget 2025 (covered below), which is why the spring update felt so quiet.

This guide covers the pension-related position confirmed at the 2026 Spring Statement, the recent Autumn Budget 2025 change that does affect savers, and the practical action steps for UK expats.

Disclaimer: This article is for general information only. Pension and tax rules change frequently and individual circumstances vary. Always consult a qualified cross-border pension specialist before adjusting your pension arrangements.

Key Takeaways

• Annual Allowance confirmed at £60,000 for 2026/27
• Tapered allowance threshold unchanged at £260,000 adjusted income; minimum tapered allowance £10,000
• Pension Commencement Lump Sum cap unchanged at £268,275
• QROPS framework untouched: Overseas Transfer Charge and ten-year reporting continue
• New State Pension rose 4.8% in April 2026 to £241.30/week (£12,547/year)
• Salary-sacrifice pension contributions above £2,000/year will attract National Insurance from April 2029 (announced at Autumn Budget 2025)
• IHT on unspent pension pots from 6 April 2027 confirmed and approaching fast
• Pension access age rise to 57 in April 2028 remains on schedule
• Non-resident tax relief rules: no new restrictions applied

What the 2026 Spring Statement Confirmed

Annual Allowance: £60,000

The Annual Allowance — the maximum you can contribute to UK-registered pension schemes in a tax year while receiving tax relief — remains £60,000 for 2026/27. This has been the limit since April 2023, when it was raised from £40,000 as part of the lifetime allowance abolition package.

For expats, this is directly relevant if you continue making contributions to a UK pension scheme from abroad, if your employer makes contributions to a UK scheme during an overseas assignment, or if you are considering a lump sum contribution before leaving the UK permanently.

Tapered allowance: The adjusted income threshold above which tapering begins is unchanged at £260,000, and the threshold income figure remains £200,000 — both must be exceeded for the taper to apply. The standard allowance then reduces by £1 for every £2 of adjusted income above £260,000, down to a minimum tapered allowance of £10,000 (reached at £360,000 of adjusted income). Most expats will not be affected, but those combining a high UK salary from a secondment with significant overseas earnings should verify their position.

Money Purchase Annual Allowance: £10,000

The Money Purchase Annual Allowance (MPAA) — triggered once you flexibly access pension savings — remains at £10,000. This restricts how much you can subsequently contribute to money purchase pensions while receiving tax relief. Expats who have begun drawing down a UK pension while living abroad and who wish to continue making contributions should be aware of this limit.

Tax-Free Cash: No Further Restriction

Periodic speculation about further restricting the Pension Commencement Lump Sum proved unfounded again. The PCLS remains at 25% of the value crystallised, capped at £268,275 — the Lump Sum Allowance that replaced the old LTA-based limit when the LTA was abolished in April 2024. This matters for expats considering crystallising pension benefits or evaluating a QROPS transfer.

State Pension: 4.8% Triple-Lock Increase

The triple lock — the higher of average earnings growth, CPI inflation, or 2.5% — delivered a 4.8% increase from April 2026 (earnings was the determining measure). The full new State Pension is therefore £241.30 per week (£12,547 per year) in 2026/27, up from £230.25 per week in 2025/26. For expats in "frozen" countries (no annual uprating) this increase does not apply; for those in countries with reciprocal uprating agreements, it does.

No Changes to the QROPS Framework

The Spring Statement made no amendments to QROPS rules. The Overseas Transfer Charge — the 25% charge applied when transferring to a QROPS in a country where you are not resident — remains in force following its extension to EEA and Gibraltar transfers on 30 October 2024. The ten-year reporting period, during which HMRC must be notified of certain payments from a QROPS, also continues unchanged. (Source: HMRC: Recognised Overseas Pension Schemes, 2026)

The Autumn Budget 2025 Change That Does Affect Savers: Salary-Sacrifice Cap

The most consequential recent pension change for working savers was not made in spring at all — it was announced at the Autumn Budget 2025. From April 2029, National Insurance contributions will be charged on salary-sacrifice pension contributions above £2,000 per year, for both employees and employers. Income tax relief on pension contributions continues to apply as normal, up to the Annual Allowance.

For most modest contributors this is immaterial — someone contributing under £2,000 a year through salary sacrifice is unaffected — but higher earners and those sacrificing larger sums will see NICs applied to the excess above £2,000. For globally mobile employees still within a UK workplace scheme via salary sacrifice during a secondment, this is worth factoring into remuneration and contribution planning ahead of 2029.

The April 2027 IHT Change: Critical Context for Expats

Not a Spring Statement change, but the single most important approaching pension issue: from 6 April 2027, unused pension funds will form part of your taxable estate for UK Inheritance Tax purposes. Announced at the Autumn Budget 2024 and legislated through the Finance Act 2026, this is now approaching rapidly.

For UK expats with significant unspent defined contribution pension pots, the IHT impact could be substantial. Previously, pension wealth sat almost entirely outside the estate. From April 2027, it will be subject to IHT at 40% on amounts above the available nil-rate bands (the nil-rate band is currently £325,000, plus the residence nil-rate band where applicable).

QROPS structures may in some cases offer continued IHT advantages depending on your domicile status and the jurisdiction chosen. This is an area where specialist advice — combining pension planning, IHT planning, and domicile analysis — is essential before April 2027.

Expat-Specific Considerations

Pension Tax Relief for Non-Residents

The rules on pension tax relief for non-residents were not tightened. Under existing legislation:

• No UK earnings: Non-residents can claim basic-rate relief on contributions up to £3,600 gross per year (a net contribution of £2,880, with the 20% top-up added by your provider) for up to five full tax years after leaving the UK.
• With relevant UK earnings: You can contribute up to 100% of those earnings (within the Annual Allowance) and receive tax relief at your marginal UK rate.

Secondees and Globally Mobile Employees

If you are seconded abroad but remain employed by a UK employer contributing to a UK-registered scheme, the Annual Allowance applies in full and employer contributions count toward it. High-earning secondees should check whether combined contributions approach the £60,000 limit or the £260,000 tapered threshold — and, from 2029, how the salary-sacrifice NIC cap affects their arrangement.

Those Approaching the Pension Access Age Change

The normal minimum pension access age rises from 55 to 57 in April 2028. The Spring Statement made no change to this timetable. Transitional protections apply for members of schemes where the rules expressly allowed access at 55 as at 11 February 2021. These protections are narrow and scheme-specific — if you are 55 or 56 and considering early pension access, take advice now before the window closes. (Source: Finance Act 2022; Finance Act 2004 as amended, 2026)

Practical Steps for Expats After the Spring Statement 2026

1. Review contribution levels for 2026/27. Confirm combined contributions remain within the Annual Allowance. Check whether the £260,000 tapered threshold affects you if you have high income.

2. Check tax relief eligibility. If you have been abroad for more than five full tax years with no UK earnings, your ability to claim tax relief may have ended. Verify with a specialist before making contributions.

3. Plan actively around the April 2027 IHT change. This is now the most pressing pension planning issue for most expats. Review beneficiary nominations, assess whether drawing down pension funds before April 2027 makes sense, and consider whether a QROPS structure alters your IHT position.

4. Factor in the 2029 salary-sacrifice cap. If you contribute to a UK workplace scheme via salary sacrifice, model the effect of NICs on contributions above £2,000 from April 2029.

5. Verify your QROPS scheme status. Confirm any scheme you hold or are considering remains on HMRC's current recognised list and that your country of residence still satisfies the Overseas Transfer Charge exemption conditions.

6. Act on pension access before April 2028 if relevant. If you are 55 or 56 and considering early access, the window under current rules is under two years. Understand your protected pension age position.

Conclusion

The 2026 Spring Statement was broadly neutral for expat pension planning — the substantive changes were made at the Autumn Budget 2025 (the salary-sacrifice cap) and the Autumn Budget 2024 (pensions within IHT from 2027). Annual Allowances are stable, tax relief rules are unchanged, and the QROPS framework was untouched. But neutral statements still require active planning. The April 2027 IHT change demands action this year, the April 2028 pension access age change is closing in, and the 2029 salary-sacrifice cap is on the horizon. For expats with multi-jurisdiction pension structures, the period between fiscal events is exactly the time to review, adjust, and act.

Further Resources

For more context on pension rules that remain unchanged following the 2026 Spring Statement, see our guides on what is a QROPS, the Overseas Transfer Charge, and International SIPPs explained. The QROPS transfer checklist is a useful reference for anyone considering a pension transfer.