How to transfer UK pension to South Africa

Planning to move to South Africa from the UK? Perhaps you’re working or starting a business in Johannesburg, or dreaming of a chilled-out retirement in Cape Town.

Whatever your plans, an important task to add to your to-do list before you move is to sort out your pension.

You may want to transfer it overseas, so that you can easily access your hard-earned pension income once you're settled in South Africa. But is it possible to move a UK pension to South Africa, and how do you go about it?

Read on for a comprehensive guide on how to transfer a UK pension to South Africa. This includes info on what pension types are eligible for transfer, how to do it step-by-step, and any tax implications you need to know about.

And remember, if you’re looking to move pension savings or other income across international borders, the Wise account is an ideal solution. It offers low transfer fees*, the mid-market exchange rate and a choice of 40+ currencies, as well as being safe and secure for transferring large sums.

Can I transfer my UK pension to South Africa?

Unfortunately, you may struggle to transfer your UK private or workplace pension directly to South Africa. At least, not in the same way as you can in some other countries, or without incurring a hefty tax bill.

How it usually works is that you’ll move your UK pension to a Qualifying Recognised Overseas Pension Scheme (QROPS) in the country you’re moving to.

This would mean that it’s on HMRC’s list of approved QROPS schemes. These are designed to make it easier to move pensions abroad - and help UK expats avoid high transfer fees and taxes.

Crucially, it can often be the only way to transfer a UK pension abroad. This is because many UK pension providers will refuse transfers to non-QROPS schemes.

The only drawback is that South Africa doesn’t currently have any schemes on HMRC’s QROPS list at the moment. This is likely because pension schemes in South Africa don’t meet HMRC’s requirements, or due to incompatibilities between pension systems in the UK and SA.

There may be another option available to you, which is to make use of an international Self-Invested Personal Pension (SIPP).¹

However, this can have potentially complex and costly tax implications, so it’s strongly recommended to get tailored advice on SIPPs and your other options from an international pensions or tax specialist.

Which UK pensions are eligible for transfer to South Africa?

As South Africa doesn’t currently have any schemes on HMRC’s QROPS list, it unfortunately means that most UK pension types are ineligible for transfer to the country.

The exception to this is a Self-Invested Personal Pension (SIPP), which can potentially be converted into an international product.¹

Some UK pensions can never be transferred out of the country, regardless of whether it has schemes on the approved QROPS list.

This includes UK state pensions. They can’t be transferred overseas, but you can still receive state pension payments while living in South Africa.

You’ll just need to make sure you’re up-to-date with your National Insurance (NI) contributions, and apply to the International Pension Centre within 4 months of your state pension age.²

Another pension type that can’t be transferred abroad is an unfunded civil service pensions - such as those held by teachers, police officers and NHS employees.³

How to transfer your UK pension to South Africa - a step by step guide

As it stands, it’s not technically possible to transfer a UK pension directly to South Africa. Your best option if you’re moving there is to speak to an international pensions specialist, who can offer you advice on SIPPs and other potential options.

But the HMRC QROPS list is regularly updated, and approved South African pension schemes may be added in the future. So, it could still be useful to look at the steps involved in transferring a pension.

We’ll run through these in just a moment. But first, some useful info on QROPS and how these schemes work.

Qualifying Recognised Overseas Pension Schemes (QROPS)

Qualifying Recognised Overseas Pension Schemes (QROPS) are pension schemes in other countries that have been vetted and approved by HM Revenue & Customs (HMRC).

Not all countries are on HMRC’s QROPS list. Unfortunately, South Africa doesn’t have any approved QROPS schemes at the moment, although the list is updated regularly.

Most UK pensions can only be moved to an HMRC-approved QROPS. It may be possible (although very difficult) to move your pension to a non-QROPS scheme, but the enormous downside to this is that there’s a whopping 40% tax bill to pay on the transfer.⁴

It’s important to note though that transferring your pension to a QROPS may not mean you avoid tax charges altogether. Again, it’s a good idea to get professional advice to understand your options and obligations.

💡 Learn more: What is a QROPS?

Steps to transfer your pension

Now, here’s a step-by-step look at the usual process for transferring your pension from the UK to another country. Although remember, you may need to follow a different process for South Africa as it’s not on HMRC’s QROPS list.

1 - Find a QROPS scheme

First, you’ll need to find a suitable QROPS in the country you’re moving to. You can do this by checking HMRC’s recognised overseas pension schemes notification list here. Handily, it’s sorted alphabetically by country.

Unfortunately, there aren’t any QROPS in South Africa at the moment, although it’s worth checking the list regularly in case this changes.

2 - Check that your UK pension allows transfers

The next step is to make sure that your pension is eligible for overseas transfer. Contact your pension provider to make the relevant enquiries, and find out about any particular conditions or costs attached to your pension scheme.

There may also be tax implications you need to know about before setting up the transfer, so you should also seek professional advice at this stage.

3 - Submit the transfer application form

Once you’ve completed the steps above and you’ve received the relevant financial advice, you can now apply for the transfer.

When you’re ready, you’ll need to download and complete Form APSS 263 from the UK Government website. This asks for information such as:

• Your personal details and National Insurance number
• Address and contact information for you in the UK (or your previous UK address if you’ve already moved)
• Details of the QROPS - including the name, address, country in which the scheme is established and regulated and its HMRC reference number
• Your employment details (if relevant).

This form needs to be submitted to your UK pension scheme administrator to start the transfer process.

It’s really important to check your form carefully before submitting it, and provide any extra information you’re asked for as quickly as possible.

If you fail to provide all the requested details within 60 days of submitting your form, your transfer will be taxed at 25% - whether or not you’re exempt from other taxes or charges.⁴

Timeframes and costs involved

Transferring UK pensions overseas tends to be complex and time-consuming, whichever route it takes.

The timescale may be affected by the efficiency of pension providers in both the UK and the country you’re moving to, as well as your own personal circumstances. You may be able to get some information on specific timeframes for transfers by speaking to your pension provider.

In terms of costs, you’ll need to speak to a financial or tax adviser to find out about charges and fees for using an international SIPP to move your UK pension funds to South Africa.

If you were to move your pension to a QROPS overseas, the main cost to know about is the overseas transfer charge of 25%.

If you’re living in the same country as the QROPS you’re transferring to - and you don’t leave for at least 5 years - you shouldn’t have to pay this.⁴

But it may apply if your transfer exceeds your overseas transfer allowance (OTA). This is currently set at £1,073,100, although it can differ in some circumstances. If you exceed your OTA, the 25% charge may be payable on the excess.⁴

Tax considerations of transferring your UK pension to South Africa

Tax is never simple, and it can be even more complicated with pensions added into the mix.

If you’re going down the route of using an international Self-Invested Personal Pension (SIPP) to move your pension funds to South Africa, it’s essential to get professional advice on your tax obligations.

SIPPs are taxable under income tax rules in the UK, but you may also be subject to tax laws in South Africa. This can be very complex to navigate, so you’ll need expert help managing your liabilities and setting up a plan to effectively manage your pension funds abroad.⁵

Save money on pension transfers to South Africa with Wise

After reading this handy guide on how to transfer your UK pension to South Africa, you should have a better idea of your options.

It can be more complicated than for other countries, due to SA not being on HMRC’s QROPS list. But with the right financial advice, it may still be possible to move your retirement savings overseas.

While you’re making your plans, it’s also important to think about how you’ll actually receive pension funds in South Africa.

A key consideration is that your pension pot will need to be converted from British pounds (GBP) to South African rand (ZAR).

If you use a local bank account, you could be stung by high currency conversion fees and poor exchange rates. As it’s likely to be a large amount you’re transferring, this could make a serious dent in your retirement funds.

Luckily, there’s a better solution available. Open a Wise account and you can manage your money in 40+ currencies, including GBP and ZAR.

You can use it to send and receive money internationally, for low fees* and mid-market exchange rates.

This could be hugely useful for transferring your pension between countries, or even for receiving your UK state pension or other UK-based income while living in South Africa.

Sign up with Wise today

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Sources used:

1. Investing Reviews - How do I Transfer my UK Pension to South Africa?
2. GOV.UK - State Pension if you retire abroad
3. Blacktower Financial Management Group - Qualifying Recognised Overseas Pension Scheme (QROPS)
4. GOV.UK - Transferring your pension
5. Cameron James - Maximising Your Retirement: A Deep Dive into International SIPP and Income Tax

Sources last checked on date: 22-Jan-2025