Last updated: June 2026.
Why people retire abroad, and what's changed
Around half a million British pensioners live abroad. Traditional reasons include better weather, lower cost of living, family connections, and lifestyle. Tax has historically been an additional driver, though the landscape has shifted recently.
Key changes affecting British retirees abroad:
- Brexit (2020-21) ended automatic right to live and work in EU countries. UK retirees now need national-level visas in EU destinations.
- Portuguese Non-Habitual Resident regime (which offered 10 years of low/zero tax on foreign pensions) closed to new applicants in 2024.
- Spanish 'Beckham Law' tax regime tightened in 2023, narrowing eligibility.
- Italian flat-tax regime raised from €100,000 to €200,000/year for new applicants in 2024.
- UK Overseas Transfer Charge (25%) now applies to many pension transfers abroad.
Popular destinations compared
| Country | Visa pathway for UK retirees | Tax on UK pensions | Healthcare |
|---|---|---|---|
| Spain | Non-Lucrative Visa (no work, ~£25k/year income required) | Taxable in Spain via DTA; rates 19-47% | Public system access after registration |
| France | Long-stay visa, residency permit | Generally taxable in France; rates 0-45% | Public system after 3 months residency |
| Portugal | D7 visa (passive income); NHR closed to new applicants 2024 | Now taxable at standard rates (was 10% for 10 years under NHR) | Public system access |
| Ireland | Free movement (Common Travel Area) | Taxable in Ireland; rates 20-40% | Public system access |
| Australia / NZ | Family or skilled migration routes; retirement visas limited | Generally taxable in Australia/NZ; rates 0-45% | Public system after qualifying period |
| Cyprus / Malta | EU residency programmes | Cyprus: 5% on foreign pensions; Malta: 15% under retirement programme | Public system access |
| UAE | Retirement visa (UAE Retirement Programme) | No personal income tax | Private insurance required |
Note: visa rules and tax regimes change frequently, always check the current position with both UK and local advisers before committing.
How UK pensions are taxed when you live abroad
The default position: UK pensions are taxed at source under UK tax rules. But Double Taxation Agreements (DTAs) with most countries allow either:
- Income to be taxed only in the country of residence (with the UK refunding any tax deducted)
- Income taxed in both countries, with credit given for tax paid
The application is via HMRC form DT-Individual, supported by a residence certificate from the foreign tax authority.
| Pension type | Default UK treatment | Typical DTA outcome |
|---|---|---|
| State Pension | Taxable as UK income | Usually taxable only in country of residence under DTA |
| Personal/SIPP pension | Taxable as UK income (drawdown and lump sum) | Usually taxable only in country of residence under DTA |
| Workplace DC pension | Taxable as UK income | Usually taxable only in country of residence under DTA |
| Government pension (NHS, civil service, armed forces) | Always UK-taxed | Almost always remains UK-taxed, regardless of residence |
The April 2027 IHT change and overseas residents
The April 2027 inclusion of pensions in IHT applies to UK-domiciled individuals regardless of where they live. Becoming non-UK resident does not, on its own, escape UK IHT. Domicile is a separate concept and takes substantial time and evidence to change.
This is why some HNW residents who moved abroad specifically to escape UK tax may find they remain subject to UK IHT for years after leaving. See our Britain's wealth exodus guide and pension IHT 2027 guide.
Healthcare, the most practical issue
The single biggest practical issue for British retirees abroad. Lose UK residency, lose NHS access (except for emergencies in some EU countries via GHIC).
Three healthcare patterns most British retirees fall into:
- Register with local public system. Works well in most EU countries once residency is established. Quality varies, Spain and France generally good, others vary regionally.
- Private health insurance. Mandatory in some countries (UAE) or supplements public cover in others. Costs rise rapidly with age, £3,000-£10,000+ per year is common for retirees.
- Combination. Public system for routine care, private for specific concerns. Common pattern in EU countries.
Critical: get healthcare arrangements confirmed before you finalise the move. Many British retirees have returned to the UK because medical needs became too difficult to manage abroad.
The pension transfer question
Should you transfer your UK pension to your new country? Historically, transfers to Qualifying Recognised Overseas Pension Schemes (QROPS) were common. Today they're much more restricted:
- Overseas Transfer Charge of 25% applies to many transfers outside the EU/EEA
- Tightened rules from 2024 apply the charge to more transfers including some within the EU/EEA
- Loss of UK protections on the transferred pension (FSCS protection, FCA regulation)
- Currency risk if transferring to a currency-denominated overseas scheme
For most retirees, keeping the pension in the UK and drawing it abroad is more tax-efficient than transferring. Take specialist advice before any pension transfer, the rules are complex and mistakes are expensive.
The financial planning checklist
Before you move
- Confirm your visa/residency pathway in destination country
- Get a tax forecast from both UK and local accountants
- Apply for the destination country's healthcare system or arrange private cover
- Set up a local bank account; understand currency hedging needs
- Decide whether to keep, rent or sell UK property
- Review your will, you may need both a UK and a local will
- Review Lasting Powers of Attorney, UK LPAs may not be recognised abroad
In the year of moving
- File HMRC Form P85 to declare non-residence
- Submit DTA paperwork to avoid double taxation
- Update pension provider details with new address
- Notify HMRC of foreign income via Self Assessment if required
- Register with local tax authority in your destination country
Ongoing
- Keep a careful record of UK days for Statutory Residence Test purposes
- Review pension drawdown strategy annually with both UK and local tax in mind
- Stay alert to UK tax changes (April 2027 IHT change is particularly relevant)
- Maintain emergency liquidity in GBP and local currency
Frequently asked questions
Can I receive my UK State Pension abroad?
Yes, but with one important nuance. You can claim and receive your State Pension in any country. However, in some countries (most of the Commonwealth except Canada, plus several others) the State Pension is 'frozen', it doesn't get the annual cost-of-living increases. In EU countries, USA, Philippines, Turkey, Switzerland, and a handful of others, you do get the annual increases. The list is set out on gov.uk.
Will I still pay UK tax on my pension if I move abroad?
It depends on whether you remain UK tax-resident. Most UK pensions are taxed in the UK by default, but Double Taxation Agreements with many countries allow the income to be taxed in your country of residence instead, often at a lower rate. The arrangement varies by country and pension type, government pensions (like NHS, civil service) usually stay UK-taxed regardless.
What about the NHS, can I still use it if I move abroad?
If you become non-UK resident, you lose entitlement to NHS treatment, except in emergencies. You'll need to register with the local healthcare system and may need private health insurance. The UK's Global Health Insurance Card (GHIC) covers some emergencies in EU/EEA countries but isn't a substitute for full health cover.
Should I transfer my UK pension to my new country?
Usually no. Transferring to a Qualifying Recognised Overseas Pension Scheme (QROPS) used to be common but is now heavily restricted. Since 2017 a 25% Overseas Transfer Charge applies to many transfers outside the EU/EEA, with further restrictions added in 2024. For most retirees, keeping the pension in the UK and drawing it abroad is more tax-efficient than transferring.
How long do I need to be out of the UK to be non-resident?
The UK's Statutory Residence Test (SRT) determines residence based on days spent in the UK, ties to the UK, and several specific tests. There's no single answer, but as a rough guide, spending fewer than 16 days in the UK in a tax year usually makes you non-resident, while spending 183+ days makes you resident. Between those, the answer depends on your ties to the UK.