International insurance provider William Russell has laid out how expats can claim a UK state pension following claims expats living in France have been hit with five-figure tax bills on their public sector pensions despite a legal exemption.

William Cooper, marketing director at William Russell, says that expats are eligible to claim a UK state pension, provided they have accumulated sufficient qualifying years of National Insurance contributions, and this can be paid regardless of where they live.

But he warns it's crucial to understand how living abroad may affect the amount paid.

“If you reside in certain countries, typically those with a reciprocal social security agreement with the UK, your state pension may still increase each year as it would if you were in the UK,” he said.

“However, in other countries, the pension may be frozen at the rate it was first paid.”

Cooper suggests people considering transferring their pension abroad explore options such as Qualifying Recognised Overseas Pension Schemes (QROPS), which may offer tax advantages or more flexibility.

To check state pension eligibility:

  1. Check your National Insurance record: Start by logging in to the UK government’s online service to view your National Insurance record. This will show how many qualifying years you have accumulated. Generally, you need at least 10 qualifying years for a minimum state pension, and 35 years for the full amount.
  2. Use the State Pension Forecast Service: You can use the State Pension Forecast service to see how much you might get, and when you can start claiming. This service provides an estimate of your state pension based on your current National Insurance contributions.
  3. Make up any gaps in your National Insurance record: If there are gaps in your contributions, you may be able to make voluntary National Insurance contributions to increase your pension entitlement. This can be particularly useful for expats who may have missed years while living abroad.
  4. Check if your country of residence impacts your pension: Verify whether the country you live in has a reciprocal social security agreement with the UK, as this can affect whether your pension will increase annually.

How to Apply for a QROPS:

  1. Research QROPS providers: Look for reputable financial institutions that offer QROPS in your country of residence. Make sure the scheme is recognised by HM Revenue and Customs (HMRC).
  2. Consult a financial adviser: It’s advisable to speak with a financial adviser experienced in expat pensions and international retirement planning. They can guide you on the tax implications, costs, and benefits associated with transferring your pension.
  3. Request a transfer value from your existing pension scheme: Contact your current pension provider to get a transfer value quote. This will be the amount you can transfer to the QROPS.
  4. Submit the application to the QROPS provider: Complete the necessary paperwork to apply for the transfer, including forms from your existing pension scheme and the QROPS provider.
  5. Transfer the funds: Once approved, the funds will be transferred from your current pension scheme to the QROPS. Keep in mind that transfer fees and tax charges may apply, especially if the transfer exceeds the lifetime allowance.

“Proper planning ensures your pension works for you, wherever you choose to retire,” Cooper added. “With these steps, you can optimise your pension’s value and ensure a smooth transition to living abroad.”