UK Pension Transfer Advice for Expats in Portugal
Clear advice on what to do with a UK pension once you are living in Portugal.
Portugal remains one of the most popular destinations for British retirees, and it is also where some of the most aggressive pension sales activity is aimed. The tax picture has changed since the original non-habitual resident regime closed to new entrants, so advice written a few years ago may no longer be right for you.
We review what you hold and set out the options against the rules as they stand today.
The transfer question, honestly
Since April 2024 the exemption that allowed charge-free transfers to EEA-based schemes has gone. That means a transfer to a QROPS can now trigger a 25% Overseas Transfer Charge, which is very hard to justify for most people.
In practice, the sensible starting point for a UK pension in Portugal is usually to keep it in the UK system and fix the things that are actually causing problems: cost, fund choice, servicing and currency.
- A 25% charge on a transfer needs an exceptional reason to be worth paying.
- An international SIPP keeps the UK tax treatment while accepting an overseas address, adviser and payments abroad.
- Any adviser pushing a single offshore product without comparing it against staying put is not giving you advice.
How pension income is taxed once you are resident in Portugal
Where your pension income is taxable is set by the UK–Portugal double taxation agreement and your residency position, not by where the pension is held. Government service pensions are usually treated differently from private and workplace pensions.
The order in which you draw income matters too — tax-free cash under UK rules is not automatically treated the same way locally, which is why the sequence should be planned before you start, not after.
Currency and cost of living
Your pension is denominated in sterling; your bills are in euros. Over a long retirement, exchange rate movement can matter as much as investment return.
We plan a currency approach deliberately — how much euro exposure you hold, when you convert, and how much cash to keep locally — instead of leaving it to whatever the rate is on payment day.
How we work
A free 30-minute meeting first, then a written review of your existing pensions with clear numbers. No product is recommended before we have looked at what you already hold.
Common questions
Should I transfer my UK pension out of the UK now I live in Portugal?
Usually not. Since the 25% Overseas Transfer Charge can now apply to EEA transfers, keeping the pension in the UK system and consolidating into an arrangement that works for non-residents is more often the better outcome.
Do I still get my UK State Pension in Portugal?
Yes, and it continues to be uprated for residents of the EU under the current arrangements. It can be paid to a local bank account.
Is the NHR regime still available?
The original non-habitual resident regime is closed to new arrivals, and the replacement is narrower. Any planning based on old NHR treatment should be reviewed against the current rules before you rely on it.
Start with the free guide
Our UK Pension Transfer Guide covers the options, the charges and the traps — written by a Chartered Member of the CISI, in plain English.
Get the Free Pension GuideRelated reading
Retirement Planning for Expats: How to Avoid Double Taxation Across Borders
How double-taxation treaties protect your retirement income — and the order you need to use them in to keep more of what you've earned.
What Happens to Your UK Pension When You Move to Switzerland (or Europe)?
How your UK pension works once you've moved abroad — access, tax, the UK–Switzerland treaty and your real options.