Resources & Insights

Brexit and UK Pensions: What Changed for Expats

By QROP Direct Editorial Team · Reviewed by an independent regulated pension specialist · Reviewed 2026-06-11

Brexit and UK Pensions: What Changed for Expats

Brexit — finalised on 31 December 2020 when the transition period ended — has had a lasting impact on UK pension planning for expats in the European Union and EEA. Some changes took effect immediately; others played out over subsequent years. The removal of the EEA exemption from the Overseas Transfer Charge (OTC) in October 2024 was the most significant recent development, reshaping the economics of QROPS transfers for UK nationals living in EU countries.

This guide explains all the Brexit-related pension changes in one place, what the current position is in 2026, and how expats in EU countries should adjust their planning.

This guide is for information purposes only and does not constitute financial, tax or legal advice. Rules continue to evolve. Always consult a regulated financial adviser.

Key Takeaways

• OTC EEA exemption removed October 2024: QROPS transfers to EU/EEA countries now attract the 25% OTC unless the same-country exemption applies
• State Pension uprating continues for most EU residents: Under the Withdrawal Agreement, established EU residents retain triple-lock increases — new movers post-2020 have a more complex position
• EU SIPP accessibility reduced: Some UK SIPP providers have restricted services to EU-resident clients due to MiFID II/post-Brexit financial regulation — check your provider
• Social security coordination: The EU-UK TCA contains social security provisions — contribution years in UK and EU may still be coordinated for pension entitlement
• Freedom of movement ended: EU nationals in the UK and UK nationals in the EU require specific residency rights — pension rights are not directly affected but residency status is relevant

The OTC EEA Exemption: What It Was and What Changed

Background: The Overseas Transfer Charge (OTC) of 25% was introduced in March 2017 on transfers from UK registered pension schemes to QROPS. From the outset, there was an exemption for transfers where the member was resident in the EEA and the QROPS was also in the EEA. This "EEA exemption" reflected free movement principles within the single market.

Post-Brexit retention: Despite Brexit, HMRC retained the EEA exemption temporarily. It was not immediately removed when the transition period ended.

Removal on 30 October 2024: HMRC announced and implemented the removal of the EEA exemption in the Autumn Budget 2024, effective 30 October 2024 (Source: HMRC, gov.uk, 2024). Since this date, EU/EEA residency no longer provides an OTC exemption.

Current position (2026): The OTC exemptions that remain are: 1. Same-country exemption: Both the member and the QROPS are in the same country 2. Occupational scheme exemption: Transfer to an overseas employer's occupational scheme 3. Overseas public service scheme exemption: Transfer to a qualifying overseas public service scheme

For UK expats in France, Spain, Portugal, Germany, Netherlands, Italy, or any other EU/EEA country, transferring to a Malta or Gibraltar QROPS now attracts the 25% OTC. The same-country exemption means a France-registered QROPS for a French resident is still OTC-free — but pan-EU QROPS jurisdictions (Malta, Gibraltar) are no longer exempt.

Impact on European QROPS

The removal of the EEA exemption has fundamentally changed the QROPS transfer calculation for UK expats in EU countries:

Before October 2024: - UK expat in Spain → Malta QROPS: No OTC (EEA exemption applied) - UK expat in France → Gibraltar QROPS: No OTC (EEA exemption applied)

After October 2024: - UK expat in Spain → Malta QROPS: 25% OTC applies - UK expat in France → Gibraltar QROPS: 25% OTC applies - UK expat in Spain → Spanish QROPS (if one exists): No OTC (same-country exemption) - UK expat in France → French QROPS (if one exists): No OTC (same-country exemption)

Practical consequence: Malta and Gibraltar QROPS, which were widely used by EU-resident expats as central QROPS hubs accessible from any EU country, are now subject to the 25% OTC for new EU-resident transfers. This has significantly reduced the financial case for European QROPS transfers.

For UK SIPPs: Retaining a UK SIPP remains completely unaffected by Brexit and the OTC changes — there is no OTC on staying in a UK SIPP. Many EU-based UK expats have concluded that SIPP retention is now the default sensible position, with QROPS only considered where there is a compelling country-specific reason (same-country QROPS) or large fund size justifying the OTC. See our SIPP vs QROPS comparison.

State Pension Uprating for EU Residents Post-Brexit

The Withdrawal Agreement position: UK nationals who were living in an EU country on 31 December 2020 are protected under the EU-UK Withdrawal Agreement. Their UK State Pension continues to be uprated annually by the triple lock, the same as if they were living in the UK (Source: DWP, gov.uk, 2026).

Post-2020 movers: Those who moved to EU countries after 31 December 2020 have a more nuanced position. The EU-UK Trade and Cooperation Agreement (TCA) includes social security coordination provisions, but State Pension uprating for new movers is not uniformly guaranteed across all EU states. Individual bilateral social security agreements between the UK and specific EU countries also play a role.

Current known position (2026): - Most EU countries: UK State Pension recipients are receiving triple-lock uprating under the TCA provisions or bilateral agreements - The position is not identical across all 27 EU member states — some have clearer bilateral agreements than others - DWP can confirm your specific uprating status — contact the International Pension Centre or DWP overseas pensions team

Action required: If you moved to an EU country after December 2020 and are receiving (or approaching) the UK State Pension, contact DWP to confirm you are enrolled in uprating. Do not assume it is automatic — verify.

Contrast with "frozen" countries: The EU uprating position (even for post-2020 movers) is categorically different from the "frozen pension" countries (Australia, Canada, New Zealand) where uprating has never applied. See our frozen countries guide.

SIPP Access for EU Residents: MiFID II Issues

A Brexit-related practical issue that emerged for UK SIPPs is the MiFID II/financial regulation dimension. After Brexit, UK financial services firms lost their EU "passporting" rights — the automatic ability to provide financial services to EU clients.

Impact on SIPP providers: - Some UK SIPP providers have restricted or withdrawn services to EU-resident clients, citing post-Brexit regulatory complexity - This is provider-specific — many major UK SIPP platforms still accept EU-resident clients, but some have restricted certain services (e.g. investment advice, some transactions) - Expats who had existing SIPPs before Brexit have generally been able to maintain them; opening new SIPPs from EU residency may be more restricted with certain providers

Action: If you are an EU-resident expat, check whether your current SIPP provider has any EU-residency restrictions. If you are looking for a new SIPP, specifically ask whether the provider accepts EU-resident clients. See our platform comparison guide for providers known to accept international clients.

National Insurance and Social Security After Brexit

NI contributions from EU countries: UK nationals living and working in EU countries can continue to pay voluntary UK National Insurance contributions (Class 2 or Class 3) to build UK State Pension entitlement. Brexit has not changed this.

EU social security coordination: The EU-UK TCA includes a social security coordination title that prevents EU and UK contribution years being wasted. If you work in both the UK and an EU country, contribution years in each country can count towards entitlement in each country's pension system. This coordination is less comprehensive than the previous EU regulation (EC 883/2004) but maintains the core principle that split-career workers do not lose entitlement.

Important change from pre-Brexit: The unlimited reciprocal healthcare access (EHIC) that EU nationals in the UK and UK nationals in the EU previously enjoyed under EU membership has changed. UK nationals in the EU should arrange private health insurance or register with the local health system — this affects longer-term retirement planning even if not pension planning directly.

What Expats in EU Countries Should Do Now

Given the October 2024 OTC change and the post-Brexit State Pension position:

1. Review existing QROPS arrangements: If you transferred to a Malta or Gibraltar QROPS when the EEA exemption applied, assess whether the arrangement still makes sense. The ongoing advantages need to justify the costs; if you are already in the QROPS, the OTC was already paid and this is a different question from a new transfer decision.

2. Do not assume a European QROPS transfer is OTC-free: It no longer is for non-same-country transfers. Any adviser recommending a Malta or Gibraltar QROPS for an EU-resident client without factoring in the OTC is not advising appropriately.

3. Check your State Pension uprating status: Particularly if you moved to an EU country after December 2020 — confirm with DWP.

4. Verify SIPP provider access: Check whether your SIPP provider has EU-residency restrictions and address before they become a practical problem.

5. Consider SIPP retention as the default: For most EU-based expats, a UK SIPP is now more clearly the right home for UK pension savings than a European QROPS, given the OTC.