How does the UK State Pension work for Non-Residents?
Your UK State Pension will be available if you retire abroad, but your income benefits could be different.
EEA residents, and those living in Gibraltar and Switzerland can claim their State Pension just like in the UK. While a lifetime UK-based income in GBP is not ideal for those retiring abroad, it can be paid into non-UK banks.
In some wider regions, the State Pension can still be claimed, but income won’t rise with inflation. See the government’s guidance for the countries and regions with limited benefits.
Triple-lock income benefits
One of the key benefits to the UK State Pension is its inflation link. The triple lock is the government’s ‘promise’ over the income linking to inflation. Check your non resident status for State Pension qualification to see if you will benefit under the triple lock.
The (current) ‘triple lock’ system means that State Pension income will rise with the higher of:
- Average Weekly Earnings
- the Consumer Prices Index
That means, non UK residents retiring in the EEA and qualifying states will see their State Pension increase by a minimum of 2.5% per year.
Claiming your UK State Pension While Living Abroad
As with any international financial planning, check your non-resident tax status and consider cross-border taxes and reliefs before claiming income. Currency planning may also be a consideration; we typically tell international residents to collect their income in GBP and convert it in tranches where possible. Switching a modest income regularly from GBP can become costly.