Living abroad as a UK expatriate presents unique opportunities, but it shouldn’t mean losing control of your hard-earned pension.
If you’re asking yourself, “What is an International SIPP?”, you’re already on the right path to securing a flexible and powerful financial future, no matter where you are in the world.
When planning your financial future as a British expatriate, pensions are often the most important, and complex, part of the puzzle.
An International Self-Invested Personal Pension (SIPP) offers a powerful, flexible, and UK-regulated solution for managing your retirement savings while living abroad.
If you’ve heard of an International SIPP and wondered whether it’s right for you, this guide will provide the clarity you need. Many expatriates are exploring this option as a flexible and cost-effective way of managing retirement savings overseas.
We’ll break down exactly what it is, who it’s for, and how it works in practice.
A Self-Invested Personal Pension (SIPP) is a type of UK pension scheme that allows individuals greater control over their retirement savings.
Unlike traditional pensions, which limit your investment choices, a SIPP lets you decide how your money is invested, from stocks and shares to bonds and funds.
An International SIPP is a UK-registered personal pension scheme designed specifically for non-UK residents.
It operates under the same rules as a standard UK SIPP, meaning it is regulated by the Financial Conduct Authority (FCA), but it is administered by providers who specialise in the needs of expatriates.
An international SIPP is therefore the same concept but specifically designed for expatriates living outside the UK. It allows you to:
Having an international SIPP will allow you to consolidate various UK pensions into one pot, giving you greater control and a wider choice of global investments, all while remaining under the protection of the UK regulatory framework.
An International SIPP isn’t a one-size-fits-all solution; it’s a specialised pension vehicle designed to address the specific financial circumstances and motivations of British expats.
Whether you’re moving for work, planning a retirement in the sun, or simply have a globally mobile lifestyle, understanding if you fit the profile is the first step.
An International SIPP is particularly suitable for:
Many expatriates have UK pensions but no longer live in Britain.
This raises questions: Should you leave your pension where it is? Transfer it abroad? Or restructure it for better control?
This is where the International SIPP comes in.
Therefore the 4 key reasons expats consider an international SIPP include:
An International SIPP is a powerful tool for managing your retirement savings from abroad, but like any financial product, it requires a balanced view.
It’s essential to weigh its significant advantages in flexibility and control against the potential complexities and responsibilities that come with it.
This section breaks down the key benefits and potential drawbacks to help you make an informed decision.
Retain UK Regulatory Protection: Your pension remains regulated by the FCA, offering a high level of consumer protection and security.
Wide Investment Choice: You are in control. Invest in a vast range of global assets, including shares, bonds, ETFs, and even commercial property to build a portfolio that matches your risk appetite.
Retirement and Currency Flexibility: You can typically start drawing benefits from age 55 (rising to 57 in 2028). You also gain the ability to hold investments and cash in multiple currencies, helping to manage the risk of exchange rate fluctuations.
Inheritance Planning: On death before age 75, your SIPP can usually be passed on to your beneficiaries completely tax-free. After 75, it is taxed at their marginal income tax rate, but it remains outside your estate for UK Inheritance Tax purposes.
Transparent Fees: SIPPs are generally more cost-effective and transparent compared to some international pension products.
UK Legal Protection: Staying within the UK’s pension framework means access to robust consumer protection and clear regulatory oversight.
While International SIPPs can be highly effective, they’re not suitable for everyone. Here are some potential pitfalls:
Local Tax Implications: Although a UK pension, withdrawals are typically taxed in your country of residence. It is vital to understand the Double Taxation Agreement (DTA) between the UK and your host country.
Investment Risk: Greater investment freedom comes with greater responsibility. Poor investment decisions can reduce the value of your pension pot.
Higher Fees: An International SIPP can have higher setup and administration fees than a simple UK workplace pension, so it’s best suited for those who will actively use its features.
Ongoing Management: International SIPPs require monitoring. Leaving them unmanaged can mean missed opportunities or unnecessary risk.
“Pensions are just one part of the retirement picture. When deciding whether an International SIPP is right for you, consider these lifestyle factors too:
Healthcare in Retirement: Access to quality healthcare is crucial, especially when living abroad. Private healthcare cover can give you peace of mind. [link to PCC insurance]
Property Abroad: Many retirees dream of owning a home overseas as part of their retirement plan. Having your pension structured correctly is only one piece of the puzzle. If you are considering Spain and the Costa Del Sol, why not visit our Property Branch.”
Are You looking to set up an International SIPP?
The process involves three main stages: setup, management, and withdrawal.
Contributions and Transfers: You, or your employer, can make contributions. For expats, contributions generally benefit from UK tax relief for the first five years of non-residence. This means for every £80 you contribute, the government adds £20.
Investment Management: Once funds are in the SIPP, you or your financial adviser can build a global investment portfolio tailored to your goals.
Accessing Your Funds: From age 55 (rising to 57), you can start taking an income. You can typically take up to 25% as a tax-free lump sum (up to a maximum of £268,275), although this may be taxable in your country of residence.
Transferability: You can consolidate a wide range of UK pensions into an International SIPP, including most Defined Contribution (workplace and personal) pensions and Defined Benefit (final salary) schemes. Transfers from Defined Benefit schemes require specialist advice as you are giving up guaranteed benefits.
Contribution Limits: The maximum you can contribute to your pension in a tax year and receive tax relief on is typically 100% of your relevant UK earnings, up to the Annual Allowance of £60,000 (for the 2024/25 tax year).
Lifetime Allowance (LTA): The LTA was fully abolished in April 2024. It has been replaced by two new allowances on the amount of tax-free cash you can take: the Lump Sum Allowance (£268,275) and the Lump Sum and Death Benefit Allowance (£1,073,100).
One of the most common decisions facing expats is whether to use an International SIPP or a QROPS.
The fundamental difference is simple:
It’s crucial to note that many historical reasons for choosing a QROPS, such as avoiding the old 55% pension death tax, are now largely irrelevant due to major UK government reforms. As a result, much of the information you find online about QROPS is out of date.
The table below provides a clear summary of the key differences in today’s landscape.
Feature | International SIPP | QROPS
|
Regulation | UK-regulated (FCA/HMRC). | Regulated in an overseas jurisdiction (e.g., Malta, Gibraltar). |
Suitability | Most expats, especially those who may return to the UK or want the highest level of protection. | Expats permanently leaving the UK with very large pension pots or specific tax circumstances. |
Costs | Generally lower setup and ongoing fees. | Typically higher setup and annual fees. |
Tax Treatment | UK rules apply, but withdrawals are taxed based on the DTA with your country of residence. | Can offer tax advantages in some jurisdictions, but rules are complex. |
Inheritance | Favourable UK rules (tax-free pre-75). Outside of UK IHT. | Inheritance rules are governed by the QROPS jurisdiction. |
For a deeper analysis, please see our dedicated article on QROPS vs SIPPs
Background:
John, a 58-year-old British expat living in Spain, had a UK personal pension he wanted to manage more effectively for his planned retirement in Spain.
The Challenge:
John was concerned about currency risk, as his pension was in GBP, but his living expenses are in Euros. He also wanted to ensure his pension was tax-efficient under the UK-Spain treaty and could be passed on to his children easily.
The Solution: An International SIPP
After consulting with PCC Wealth, John transferred his pension into an International SIPP. This allowed him to:
The Outcome:
John has a flexible pension solution that aligns with his retirement goals. He feels confident that his savings are secure, tax-efficient, and structured for his life in Spain.
Yes.
Most UK pension types can be transferred, including personal pensions, old workplace schemes, and even other SIPPs.
This depends entirely on the tax treaty between the UK and your country of residence.
Professional advice is essential to ensure you are compliant and efficient.
Yes.
As a UK-regulated scheme, it falls under the Financial Services Compensation Scheme (FSCS), offering a significant layer of protection.
The world of cross-border pensions is complex.
Making the wrong choice can result in unexpected tax bills, high fees, or limited access to your own money.
That’s why seeking advice from a consultancy with deep expertise in expatriate financial planning is so important.
At Private Client Consultancy, we specialise in helping expats understand their options and choose the pension structure that fits their unique needs.
From comparing International SIPPs to QROPS, to ensuring your retirement plan aligns with your lifestyle abroad, we provide clarity and confidence.
So, what is an International SIPP? It’s a UK-regulated pension designed for expatriates, giving you flexibility over investments, security within the UK system, and the ability to manage your retirement income abroad.
For many expats, it provides the best of both worlds, offering choice and control while avoiding the high costs and complexity of overseas schemes.
But every situation is different.
If you’re considering your pension options as an expatriate, the most important step is to seek professional, personalised advice.
Contact Private Client Consultancy today to explore whether an International SIPP is right for you and secure the retirement lifestyle you deserve.
We’ve Moved Offices on 1st August 2025!
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Effective Date: Friday, 1st August 2025
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