UK Pension Transfers: an essential guide

Disclaimer: UK pension transfers are a complicated subject.  It’s important to seek out qualified legal advice in addition to talking to your accountant, who can explain the tax implications and walk you through the process

If you are a British expat living in New Zealand or a returning Kiwi, transferring your UK Pension with you can offer some key benefits. 

If you’ve spent any time researching online, you’ll be aware that there is no shortage of information (and misinformation) on the subject.

This article aims to answer the most common frequently asked questions, and help you gain a better understanding of whether pursuing a pension transfer is appropriate for your situation.


What is a QROPS?

QROPS stands for ‘Qualifying Registered Overseas Pension Scheme’.  If you want to transfer your UK pension to New Zealand, you can only transfer it to an HMRC approved QROPS (or face a large penalty – possibly up to 40%).  Unfortunately, KiwiSaver accounts do not currently qualify to accept transfers.

What are the tax implications?

Typically, UK pension transfers do not incur charges if you make the transfer within four years of becoming a New Zealand tax resident.  Even where this is not the case, if you are a New Zealand resident and don’t withdraw from your transferred QROPS for at least five tax years, you won’t pay tax on the transfer.

That said, in some circumstances tax charges of 25% may be applied (depending on the type of scheme you are transferring), however you don’t usually have to pay tax on transfers to QROPS if your pension scheme was provided by your employer.

Remember, taxation rules are subject to change at any time, and the rules differ depending on the type of scheme you are transferring, so it pays to seek individual specialist advice prior to making any withdrawals.

What if I don’t like the current exchange rate?

Thankfully, many pension schemes in New Zealand permit you to retain your funds in GBP until such a time as you wish to exchange to NZD at a more favourable rate.

At what age can you access the funds?

Currently, you can access your funds once you have reached the minimum UK retirement age of 55.  However, the rules are set by the UK HMRC – and therefore could change at any time.

Will I lose any benefits if I transfer?

The answer to this varies, depending on the nature of your UK pension scheme.  Transferring from defined benefit schemes will likely incur a loss of benefits; so again we recommend you seek specialist legal and tax advice before committing to a transfer.

Talk to your dedicated account manager about the scheme you are currently in, and we can help you understand the risks and calculate the viability of transferring the fund.

What other costs (in addition to potential transfer fees) are involved?

Authorised Financial Advisers are required to fully disclose their fees before you undertake any transfer.  Aside from your adviser’s fee, there may also be transfer fees, entry and exit fees, annual management fees and switch fees, depending on your circumstances.

Fees can add up, so it is important to know exactly what all your costs would be, before you make any decision.

Someone cold-called me offering UK Pension Transfers: what should I do?

Scam cold calling targeting British ex-pats is on the rise.  Always check the credentials of anyone who calls offering help prior to discussing your personal finances.  If you have any questions about the legitimacy of someone calling, contact us and we can help, or contact the Financial Markets Authority, who can give you information about known scams.


Get in touch for assistance

Remember: transferring your UK pension should only be done once you are certain you will not be returning to the UK.  Otherwise, you may end up losing money and benefits.

If you’d like to find out more or want to work out whether a UK pension transfer is the right move for your situation, talk to us – we can help clarify your options and simplify the process.

The Team at Agar Fenwick



Please note that the advice provided in this article is intended as an introductory overview.  While care has been taken to ensure accuracy and reliability, the information provided is subject to change and may not reflect current developments or address your specific situation.

If you are considering transferring your UK pension to New Zealand, get in touch with your account manager at Agar Fenwick to receive expert financial advice specific to your circumstances.