Drawing down a UK pension abroad

Question

I am 30 years old and currently live in the UK. I am moving out of the UK in 3 - 5 years (to a country in Europe), where I will likely stay.

My question relates to pensions, of which I have none. I don't want to miss out on the next few years of pension contributions, but also don't want to be double taxed or taxed on moving a pension abroad when I move / come to draw-down.

What is the best option here? I want to stick to employer pension because of the matched contribution but again, don't want to bother if I'm going to be taxed a lot in the long term. Maybe it's better to make my own 'pension' in a stocks fund or something?

Answer 1

You should definitely use the pension while you live in the UK if it comes with an employer match. Even without the match, you would benefit from tax relief (though in that case a LISA might be a better bet, depending on your marginal rate of tax).

Once you move abroad you can either:

• Leave your pension here and start drawing it at any point you become entitled to (probably at about age 58, depending on how the government changes the pension age in future). It'll probably be under the level of the UK personal allowance, which you might or might not be entitled to, but either way most/all European countries have double taxation agreements with the UK so you shouldn't end up taxed on it twice.

• Move it abroad, which may or may not be possible or make sense depending on the country you move to. This would have the advantage of being simpler (once you've gone through the move itself) and also not exposing you to the risk of movements in exchange rates over the next decades.

There's a general guide here: https://www.pensionsadvisoryservice.org.uk/about-pensions/when-things-change/moving-abroad