Payment of the state pension while abroad
Your State Pension can be paid into a bank or building society in the UK or a bank in the country you’re living in. This can be your account, a joint account or someone else’s account, provided you have their permission. You will need the international bank account number (IBAN) and bank identification code (BIC) numbers if you have an overseas account. You must choose which country you want your pension to be paid in. You cannot be paid in one country for part of the year and another for the rest of the year.
You will either be paid in local currency into a local account or will need to change the funds into local currency when you send the money from your UK account. You will therefore see the amount you get in local currency change as the exchange rate fluctuates.
You can choose to be paid every 4 or 13 weeks.
Increases in your pension while abroad
One of the most significant changes when you travel abroad is whether your UK state pensions will be increased as the pension is increased in the budget each year. Currently if you remain in the UK your state pension will increase each year by the greater of the percentage growth in average earnings, inflation (CPI) and 2.5%. Whether you get this increase will depend on where you decide to retire. You pension will be frozen at the rate when you leave the country unless your are moving to one of these countries:
- Countries in the EEA, which includes all EU countries plus Iceland, Liechtenstein and Norway
- Countries the UK has a social security agreement with (except Canada, Australia and New Zealand):
- the Isle of Man
- The Philippines
Your pension will go up to the current rate if you return to live in the UK.
Earning a State Pension Abroad
If you live or work abroad in another country, you may be able to contribute towards that country’s State Pension scheme and be eligible for that country’s state pension as well as your UK State Pension.
If you worked in the European Economic Area (EEA) countries, Gibraltar and Switzerland you only need to claim your state pension in the last country where you lived or worked. Your claim will cover all EEA countries (including the UK), Gibraltar and Switzerland. You don’t need to claim for each country separately. Outside these countries you will need to contact the pension service in that country separately to claim any pension due.