Pension Transfers

Transferring a UK pension overseas is one of the most consequential financial decisions a British expatriate can make. Once a pension leaves a UK-registered scheme, the decision is difficult and costly to reverse. The transfer process involves multiple parties — your current scheme, a regulated financial adviser, HMRC, and the receiving scheme — and is governed by strict rules around advice, charges, and reporting. This hub covers everything you need to know before initiating any pension transfer.

The Transfer Process: How It Works

Moving a UK pension to a QROPS or International SIPP typically takes between three and six months from initial enquiry to completion. The stages are:

1. Scheme identification: Your chosen receiving scheme must be appropriate for your circumstances and, in the case of a QROPS, must appear on HMRC's current list of qualifying schemes.
2. Regulated financial advice: For defined benefit pensions above £30,000, FCA-regulated advice is a legal requirement before any transfer can proceed. For defined contribution pensions, advice is strongly recommended but not always legally required.
3. Transfer request: Your current scheme completes a due diligence process before releasing funds. Ceding schemes are required to refer certain transfers to Pension Wise or the Money and Pensions Service before proceeding.
4. HMRC reporting: The transfer is reported to HMRC by the receiving scheme administrator. The Overseas Transfer Charge is assessed at this stage.

Our pension transfer process timeline guide maps out each stage and realistic timescales.

Defined Benefit Pension Transfers

Defined benefit (final salary) pension transfers are the most complex and highest-risk type of pension transfer. You are giving up a guaranteed income — often indexed to inflation — in exchange for a pot of money whose future value depends on investment returns and market conditions. For most people in most circumstances, retaining a DB pension is the right decision.

Where a DB transfer is appropriate — typically for those with strong reasons to want flexibility, are in poor health, or have substantial other assets — the transfer value analysis is extensive and the advice requirement is absolute. Our defined benefit pension transfers guide explains the process, the risks, and what to expect from a transfer value analysis.

The Overseas Transfer Charge

The Overseas Transfer Charge (OTC) is a 25% charge levied by HMRC on QROPS transfers that do not meet a specific exemption. The main exemption — that you are tax resident in the same country as your QROPS — has become the primary planning consideration for overseas transfers since the EEA/Gibraltar blanket exemption was removed on 30 October 2024.

If you pay the OTC when transferring and later become resident in the same country as your QROPS (within five years), HMRC will repay the charge. Conversely, if you receive an OTC exemption and then move to a different country within five years, a charge may become due. This "clawback" element is a critical planning point.

The full rules are covered in our Overseas Transfer Charge explained guide.

Avoiding Pension Transfer Scams

Pension transfer fraud is a serious and growing problem. The most common form involves persuading pension holders — often those with relatively modest pots — to transfer to fraudulent or poorly-performing overseas schemes, often using cold calling, social media advertising, and promises of unusually high returns or early access to funds.

Warning signs include: unsolicited contact about your pension; pressure to act quickly; claims that a transfer will unlock a cash bonus or higher returns; and schemes that are not on HMRC's QROPS list or the FCA register.

Our pension transfer scams protection guide sets out how to verify a legitimate transfer opportunity and what to do if you suspect fraud. Our 2026 scams update covers the latest tactics being used and how regulators are responding.

Getting the Transfer Right

The most important thing you can do before any pension transfer is take regulated advice from an FCA-authorised adviser with experience of international pension transfers. Even where advice is not legally required, the risks of an unadvised transfer — OTC liability, tax penalties, investment losses, or irreversible surrender of guaranteed benefits — are significant.

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Frequently Asked Questions

Do I need a financial adviser to transfer my pension overseas? For defined benefit pensions above £30,000, regulated financial advice is a legal requirement. For defined contribution pensions, it is not always legally required, but is strongly recommended given the complexity and the risk of OTC charges, tax penalties, and scheme-related risks.

How long does a pension transfer typically take? Most transfers take between three and six months. Defined benefit transfers tend to take longer due to the advice and discharge paperwork required. Some ceding schemes are slower than others — your adviser should be able to guide you on realistic timescales.

What is the Overseas Transfer Charge and can I avoid it? The OTC is a 25% charge on QROPS transfers. You can avoid it if you are tax resident in the same country as the receiving QROPS scheme. International SIPP transfers are not subject to the OTC at all, as the SIPP remains a UK-registered scheme.