Retiring Abroad: Can you take a UK State Pension with you?
by Ritchie Mehta (08 July 2009)
So you’ve taken the plunge and decided to move to sunny shores to retire in peace. You’ve worked hard for most of your life, so why not? However, being financially secure when living abroad must be of utmost importance to you to make sure you are able to maintain your lifestyle. Well, the good news is you may be eligible to claim UK state pension contributions while residing overseas.
It is important to note that the rules differ depending on which overseas country you choose to live in. If you live in a country that is in the European Economic Area (EEA) or has a social security agreement with the UK, you are entitled to the full state pension with annual index-linked increases. If you live anywhere else in the world you are still legible for a state pension but it will not be index-linked and therefore the value will erode in time. For example, if you were moving to Austria your pension would be index-linked, while if you moved to India it would not be. In order to find out if a particular country has a social security agreement with the UK please visit the Department for Work and Pensions website.
How can you claim a UK pension while living abroad? Rules do vary between countries in the EEA and it depends very much on where you last worked. For instance, if you are Irish and came to the UK to work when you were 20, worked here until you were 57 and then returned to Ireland to work, once you are at pensionable age you should claim your UK pension from the pension institution in Ireland. On the other hand if you worked in the UK until you were 35 and then worked in France until you were 50 and decided to take early retirement in Spain. Upon UK pensionable age you should contact the French pension authorities to claim your UK pension.
If you have lived away from the UK for a while, and therefore have not contributed enough for a full pension, you can defer pension claims to give you time to increase contributions to the necessary levels. For more information on deferring a pension claim please visit the Department for Work and Pensions website.