Leaving the UK? How to apply for the pension refund

Zorica Lončar
27.04.21
4 minute read

If you’re planning to leave the UK to live, work or retire in another country, you’ll have a long list of things to sort out before you go. One of these is your pension, which is especially crucial if you’re looking to retire abroad.

In this guide, we’ll cover all the essentials you need to know about leaving the UK and pension refunds.

Plus, a handy tip if you want to transfer a pension overseas instead of claiming a refund - open a Wise multi-currency account. With this, you can swerve high bank and currency conversion fees by having your pension paid in the sender’s local currency.

Learn more

But more on this later. Let’s start by finding out whether you may be eligible for a pension refund.

Can I get a pension refund if I leave the UK?

In the case of most pensions, your contributions and savings will stay in the pot until you retire. But there are some exceptions, in which you could be entitled to a refund of what you’ve paid in. Here’s what you need to know¹:

  • If you leave a workplace pension scheme within two years of joining, it may be possible to claim a refund of your contributions.
  • If you are automatically enrolled in a workplace pension, you can get a refund if you opt out within a month of joining
  • For stakeholder or personal pension schemes, you can only receive a refund of contributions within 30 days of joining

You can’t get a refund on any contributions paid through salary sacrifice schemes.

However, it all depends on your pension provider, so getting in touch with them should be your first port of call.

What about state pension refunds?

Unfortunately, you can’t get a refund on your state pension, as this is calculated based on your National Insurance record.

This could be a good thing, as if you can maintain your NI contributions when you move abroad, you’ll be eligible to claim your UK state pension from your new country of residence.

Taxes on pension refunds

When you claim a refund for a workplace or other eligible pension, you will be subject to tax¹. This will be taken off your refund. It’s to make sure you don’t benefit from the tax relief you gained when you first paid the contributions.

How to claim a pension refund in the UK

As different pension schemes have different processes, it’s always best to contact your pension provider first. They can tell you whether or not you’re eligible for a refund, how to claim it and what forms you need to fill in.

Before claiming your refund, it could be a sensible idea to speak to an independent pension adviser. They can help you work out the best way to manage your retirement finances when you move abroad, and to understand the tax implications of your decisions.

Not eligible for a pension refund in the UK? Let’s look at the alternatives

If you’re not able to claim a refund on your pension contributions, here are some of the other ways you can manage your pension when you leave the UK:

  • Claim your UK state pension abroad
  • Leave your other pensions in the UK and arrange to access your pension pot and have it paid to you abroad when you retire
  • Transfer your personal pension to a Qualifying Recognised Overseas Pension Scheme (QROPS) in your new country of residence.

Save money on international pension payments with Wise

If you’re transferring your pension abroad or having your UK state pension paid to you in another country, you’ll need to find a cost-effective way to receive the money. Go through banks and you could lose money to high currency conversion fees, plus unfavourable exchange rates.

A better way to manage your retirement savings internationally is with Wise.

Open a Wise multi-currency account and you can have your pension paid in GBP, which means no need for currency conversion -and the high costs that come with it.

Once the payment lands in your secure Wise account, you’ll take control of converting it to your new local currency, whether it’s EUR, USD, AUD or any other.

You’ll only pay a tiny fee for the conversion and you’ll benefit from the real, mid-market exchange rate, with no expensive mark-up on top.

This could save you a bundle, especially if you have a large pension pot.

Join Wise and start saving today


So, that’s pretty much it - everything you need to know about leaving the UK and pension refunds. Before making any decisions, just remember to seek expert advice to make sure you understand the tax and other implications. Good luck!


Sources used for this article:

  1. Pensions Advisory Service - leaving your pension scheme, taking a pension refund

Sources checked on 26th April 2021


This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

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