If you want to spend your retirement abroad, your state pension may be frozen (it depends on where you retire to). Find out which countries entitle you to an increased pension and where it will be frozen.
The state pension if you’re abroad – will it be frozen?
Depending on where you move to, your state pension may be frozen or it may increase every year. If it’s frozen, it means that the amount of state pension you receive when you leave the UK is the amount you’ll get for the rest of your time abroad.
If you retire to a country that’s within the EEA (European Economic Area), your state pension will not be frozen, but will increase by the same amount as if you’d retired in the UK. The UK is currently in the EEA, but when it leaves the EU in March 2019 (or after the transitional period, if there is one), it may not stay in the EEA.
These are the countries that make up the EEA:
- Czech Republic
You will also receive an increase in your state pension if you retire to Gibraltar or Switzerland, or a country that the UK has a social security agreement with. Here’s a list of countries outside the EU where your state pension would also increase at the same rate as if you lived in the UK.
- the Isle of Man
- The Philippines
SAVVY TIP: Confusingly, the UK has a social security agreement with Canada and New Zealand, but you don’t get the state pension increase in either of those countries.
Countries where your state pension will be frozen
There are over 100 countries where your state pension will be frozen if you go to live there. They include (in descending order, with Australia having the most UK expats):
- New Zealand
- South Africa
- Republic of Yemen
SAVVY TIP: If you return to the UK and live here for more than six months, your state pension will increase to the current UK rate and will then increase as normal.
How many people live in countries where their pension is frozen?
Over 550,000 people live in countries where their state pension is frozen, whereas over 660,000 people live in countries where their state pension is uprated.
How to claim your state pension if you live abroad
How you claim your state pension depends on whether you worked in the UK only, in the UK and abroad or abroad only, and if so, where you’ve worked.
If you worked in the UK: You can claim your state pension from the country you’re living in. You should be sent a state pension claim form four months before you reach state pension age. If you haven’t received a state pension claim form three months before you reach state pension age, you should contact the International Pension Centre.
SAVVY TIP: You can contact the IPC by email or phone, or fill in an international claim form. You’ll need the international bank account number (IBAN) and bank identification code (BIC) numbers for your overseas account.
Contact details: International Pension Centre
You can email at: email@example.com
You can telephone at: 0191 218 7777. The phone line is open from Monday to Friday between 8 am – 8pm.
If you’ve worked in both the UK and abroad: you still need to claim your state pension using the international claim form, and send it to the International Pension Centre.
If you’ve only worked abroad: you can claim your state pension in the country you’ve been living and working in, if it is one of the countries that makes up the EEA (European Economic Area) or Gibraltar or Switzerland. There’s a list of EEA countries earlier in this article.
SAVVY TIP: If you’ve lived and worked in another country, you must claim your state pension via the International Pension Centre.
Getting your state pension paid
You can get your state pension paid into a bank account in the country you’re living in or in the UK. It can be an account in your own name only, a joint account or someone else’s account.
Tax on your state pension
If you’ve retired abroad and you’re a non-UK resident, you’ll normally be taxed under the rules of that country. If so, you won’t normally pay UK tax on your state pension (as that would mean you’re taxed twice). As long as the UK has a ‘double taxation agreement’ with the country you’re living in, you won’t be taxed twice. You can find out more about tax if you’ve retired abroad on the Gov.uk website.
SAVVY TIP: There’s a full list of countries and whether or not there’s a double taxation agreement in force on the Gov.uk website.
Continuing to claim your state pension
It’s likely you’ll be sent what’s called a ‘life certificate’ every so often. This is to show you’re still alive and therefore entitled to receive the state pension. You’ll need to get this letter countersigned by someone who’s known you for at least two years and who has one of a number of ‘approved’ occupations. The list of occupations is on the Gov.uk website.
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