Living in Europe with pensions still tied up in the UK or elsewhere?
Many expats are unknowingly losing part of their retirement wealth to currency risk, high fees, and inefficient tax structures.
This definitive guide unpacks the complexities of international pensions, explaining your options like QROPS and SIPPs, to help you build a smarter, more secure financial future abroad.
For the millions of expatriates building a life in Europe, managing finances across borders is a familiar challenge. Yet, no asset is more critical to your long-term security than your pension.
Whether your retirement savings are in the UK, the US, or elsewhere, leaving them in your ‘home’ country could expose you to unnecessary taxes, currency risk, and inflexibility.
At Private Client Consultancy, we specialise in structuring international pensions to align with your life in Europe, ensuring your retirement is as rewarding as it should be.
In this article you will learn:
Living abroad permanently changes your financial footprint.
A pension that was designed for a resident of your home country is often poorly equipped for the realities of being an expat in the EU.
Many discover their existing schemes are inefficient, facing challenges that can significantly erode their retirement income.
Currency Volatility: Receiving your pension in Sterling (£), Dollars ($), or another currency while your expenses are in Euros (€) creates constant uncertainty. A 10% swing in the exchange rate means a 10% pay cut overnight. An international pension can be denominated in Euros, removing this risk entirely.
Tax Inefficiency & Double Taxation: Europe is a web of Double Taxation Agreements (DTAs). Where your pension is held and where you are resident determines which country has taxing rights. Without expert planning, you could be taxed on your pension income in two different countries, or pay a higher rate of tax than necessary.
Inheritance Tax Complications: Many domestic pensions are not structured favourably for international inheritance, potentially creating a significant tax liability for your beneficiaries. The right structure can ensure your wealth is passed on efficiently.
Limited Flexibility & Access: Older pension schemes often impose rigid rules on when and how you can access your funds, forcing you into buying an annuity. Modern international solutions offer flexible drawdown, allowing you to take income as and when you need it.
The UK Lifetime Allowance (LTA) Legacy: While the UK’s LTA charge has been abolished [insert link], its framework still exists for certain purposes. For those with larger pensions, a transfer to a QROPS can offer a way to crystallise your benefits and mitigate potential future legislative risks.
For British expatriates in particular, two solutions stand out. The choice between them depends entirely on your personal circumstances, residency status, and long-term plans.
A QROPS is a pension scheme based outside the UK but recognised by HMRC. Transferring your UK pension to a QROPS effectively moves your pot out of the UK tax net.
A SIPP remains a UK-registered pension, but one that offers enormous investment freedom and flexibility compared to standard schemes.
David, 62, retired to Portugal from the UK with a £750,000 defined contribution pension.
By leaving it in the UK, his income was subject to GBP/EUR fluctuations and UK income tax rules.
After a consultation, we recommended transferring his pension to a Malta-based QROPS. Now, his pension is denominated in Euros, eliminating currency risk.
Under the Portugal-Malta tax treaty, his pension income is taxed efficiently in Portugal, and the structure provides significant protection from inheritance tax for his children who live in Germany.
Do You Require A Review Of Your International Pensions?
While a significant number of expatriates in Europe hold UK pensions, our expertise extends to advising clients with retirement funds from across the globe.
The principles of tax efficiency, currency management, and flexibility are universal, even if the specific solutions differ.
For American citizens living in Europe, we analyse the complex interaction between US pension schemes (like a 401k or IRA) and the specific tax treaties between the United States and your country of residence.
Our goal is to ensure compliant, tax-efficient withdrawals and avoid costly penalties.
You can find out more about moving your 401k to Portugal here or if you’ve worked in the UK but now live in the USA then consider why an international SIPP might be the international pension scheme for you.
For those who have worked for multinational companies across several EU member states, you may have accrued benefits in an IORPS II (Institutions for Occupational Retirement Provision) scheme.
These are occupational pensions specifically designed to operate across EU borders, offering a more streamlined solution for a mobile workforce.
We can help you understand your entitlements within these schemes and how they integrate with your other international retirement assets.
Each client’s background is unique, which is why a personalised review is essential to build a truly coherent and international retirement strategy.
Finally, the raw tax figure is multiplied by a coefficient based on the beneficiary’s kinship group and pre-existing wealth. This can increase the final bill significantly, especially for Groups III and IV.
If you are an expat in Europe, you should ask yourself these questions about your current pension:
International pensions are a retirement savings scheme designed for individuals who live or work outside their home country.
They are structured to be portable and tax-efficient across borders, with popular examples including QROPS for UK expats and International Pension Plans (IPPs) for globally mobile employees.
There isn’t a single “EU pension scheme” for all citizens.
Each member state has its own state and private pension system.
However, EU regulations coordinate social security systems to protect the pension rights of people who have worked in multiple member states.
For cross-border occupational pensions, structures like IORPS II provide a framework for pan-European operations.
An overseas pension, like a QROPS, works by transferring your existing domestic pension pot (e.g., from the UK) to a qualifying scheme in another jurisdiction (e.g., Malta).
Your funds are then managed under the rules of the new jurisdiction, which can offer benefits in currency, tax treatment, and investment flexibility tailored to an expatriate’s needs.
They must comply with rules set by the original country’s tax authority (like HMRC) to be ‘recognised’.
Navigating the internation pension landscape requires specialist expertise. Our process is designed to provide clarity and confidence:
Your pension is the foundation of your future. Don’t let geography, complex tax rules, or currency risk dictate your quality of life.
The decisions you make today will echo for decades.
Contact Private Client Consultancy for a free, no-obligation pension review. Let’s build a robust strategy that works for your life in Europe.
We’ve Moved Offices on 1st August 2025!
Private Client Consultancy is excited to announce that we have moved to a brand-new office space, designed to better serve our clients and reflect our continued growth.
Effective Date: Friday, 1st August 2025
New Address: Urb Jazmin De Miraflores, C. Jazmín, 2, Mijas Costa 29649, Malaga, Spain
Our phone numbers and email addresses remain unchanged.
All in-person meetings scheduled from 1st August onwards will take place at our new location. Please update your records accordingly.
We look forward to welcoming you to our new space!
Get notified about new articles, latest changes and much more
