The UK government’s plan to increase the State Pension age is raising concerns among retirees, especially those living abroad. With life expectancy rising and pension costs growing, policymakers are pushing the retirement age higher, forcing many to work longer before accessing their benefits. But what does this mean for expats, and how can they protect their retirement plans?
What’s Changing?
The UK government has confirmed that the State Pension age will rise from 66 to 67 between 2026 and 2028. There is also speculation that it could increase to 68 even earlier than expected, possibly by the late 2030s. These changes mean that UK workers—including expats—will have to wait longer before receiving their pensions.
The key concerns include:
- Delayed Access to Pensions – Those planning to retire at 66 will now need to adjust their timelines.
- Financial Strain on Retirees – Waiting an extra year (or more) means covering living expenses without pension support.
- Potential Future Increases – The government may raise the pension age further to cope with economic pressures.
How Does This Affect Expats?
For UK pensioners living abroad, the impact of these changes depends on their location, tax situation, and financial planning. Key issues include:
- Delayed Pension Payments – Expats will have to wait longer to receive their State Pension, just like UK residents.
- Frozen Pensions in Certain Countries – Expats living outside the EEA or countries with a UK social security agreement will not receive annual pension increases.
- Exchange Rate Risks – If you rely on UK pension payments while living abroad, fluctuations in GBP could affect your income.
Is a QROPS Transfer the Solution?
With pension age increases and potential future restrictions, many expats are looking into QROPS (Qualifying Recognised Overseas Pension Scheme) transfers. A QROPS transfer allows UK pension holders to move their retirement funds to an overseas scheme, offering:
- More Flexibility – Avoid UK government pension age restrictions.
- Tax Advantages – Depending on residency status, QROPS can reduce tax liabilities.
- Better Control Over Investments – More diverse investment opportunities outside the UK.
Planning Ahead for a Secure Retirement
As the UK government pushes for longer retirement ages, expats must rethink their financial strategies. Whether considering alternative income sources or transferring pensions through QROPS, planning early can help retirees maintain financial security. With further increases in retirement age likely, securing your pension before new reforms take effect is more important than ever.