Overseas – continuing to pay pension contributions after leaving the UK

When someone moves overseas, they can still pay tax relievable contributions of up to £3,600 p.a. (gross) for up to 5 tax years after the tax year they left the UK. The contributions must be to a plan they were a member of before they left the UK.

In this case study we look at how this works in practice.

Case study

Sheila earns £3,500 p.m. payable in arrears on the first of every month and pays a gross contribution of £400 p.m. to a personal pension plan.

On 2 August 2020 she leaves the UK to live and work in France. Her UK earnings for 2020/21 are therefore £14,000 and she can continue to pay £400 p.m. until the end of the tax year and receive tax relief.   

For the next 5 tax years, that is from 6 April 2021 to 5 April 2026, the maximum gross tax-relievable contribution she’ll be able to make is £300 p.m.  From 6 April 2026 she will receive no tax relief on any contributions she makes.

If she had left on 2 May 2020, she would only have earnings of £3,500 in 2020/21 and so could only continue to pay £400 p.m. for a total of 9 months in 2020/21 as £3,600 would be the maximum amount of contributions she could pay with tax relief.  

Note

The information provided is based on our current understanding of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice. Also it may not reflect the options available under a specific product which may not be as wide as legislations and regulations allow.

All references to taxation are based on our understanding of current taxation law and practice and may be affected by future changes in legislation and the individual circumstances of the investor.