International money transfer guide for pensions abroad

Spending your retirement in a blissfully beautiful country is the ultimate goal for many, with the potential to experience a different climate, culture and cuisine being a huge draw for a lot of retirees. But what are the practical things you should know before you relocate?

Whether you're living abroad and receiving a pension from your home country or thinking of moving your pension pot to a new country, money transfer providers can help to make this international money transfer significantly easier – and also save you money in the process. This handy guide can help you to make the most out of receiving your pension abroad.

Receiving your overseas pension payments

For those receiving overseas pension payments frequently, it just makes sense to set up a regular overseas payment plan, as this will be the easiest and cheapest way to continue to receive the payments in your new country. There will likely be some quick savings for fees and, depending on the amounts being sent, additional savings to be made in terms of the exchange rate offered.

Transferring your pension

If you're looking to move your entire pension to a new jurisdiction and change the currency it's held in, then there is a great opportunity to increase the amount of money received by working with a money transfer provider. You could be moving a significant sum of money and obtaining a far better exchange rate than what your bank could offer.

What to look for when moving your pension overseas

What form does the new pension scheme take

So you're planning to move your pension overseas? Don't forget to check what the new type of pension or retirement plan is. Your existing pension may be in the form of a defined benefit scheme and if you move it to a defined contribution scheme, you could actually end up worse off!

What transfer value does your pension have?

When choosing to transfer out of your existing defined benefit pension, then the trustees of this pension will need to calculate the benefits you have built up into a cash amount; in other words, the 'transfer value' or 'cash equivalent transfer value'. You're subsequently tasked with the decision of whether this will be invested in a pension scheme with a new employer, a buy-out contract or a stakeholder or individual pension. Not all pension or retirement schemes you look to move to will accept a transfer. Be especially careful when this is being done overseas and take professional advice before making such a move.

Are there any tax implications for moving your pension overseas?

Now here's an important one! If you decide to move your pension, it may trigger a tax payment if the transfer does not meet certain criteria. Ultimately, this will depend on what pension you have and what country you are transferring the pension out of. Make sure to discuss this with your accountant to be aware of what your situation is.

If you're looking to take the plunge and move your pension abroad, save yourself some time and money by finding a money transfer provider that you can trust. See the reviews of our recommended providers.