Do I pay income tax on pension income?
Question asked by Peter Busby
I’m now working overseas but plan to return to the UK at some point in the future. Am I still able to pay into my UK pension?
Yes, you can live and work abroad and still pay into UK pension scheme. However, you might not be eligible for the same amount of tax relief that you would be if you were working in the UK.
To qualify for tax relief on your pension contributions, you would normally have to be a UK resident.
However, depending on your employer and employment status, you may be eligible for tax relief if you live overseas. For example, if you work for the Armed Forces you would retain membership in the Armed Forces Pension Scheme when on military service abroad.
Bear in mind that when you want to receive your pension benefits, your pension provider won’t normally pay them into an overseas bank account. This means you may have to transfer the money from a UK bank account to where you live abroad, and there will be transfer fees to pay as well as exchange rate fluctuations to factor in.