UK Pension Transfers in France

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For many UK nationals settling in France, one of the most important (and often confusing) aspects of their financial planning is what to do with their UK pension. Post-Brexit changes, shifting tax rules, and evolving pension legislation mean this decision has become far more complex than it once was.

If you’re living in France, or planning to, you typically have three broad options for your UK pension:

• Retain the existing UK scheme

• Transfer to an overseas scheme (QROPS)

• Transfer to an alternative UK scheme (SIPP)

Below we explore each of these routes, their advantages, pitfalls, and how they interact with French taxation.

Retain Your Existing UK Pension

Before Brexit, leaving your UK pension untouched was often the simplest and cheapest approach. Whether you held a defined benefit or defined contribution plan, you could generally access your benefits without too much hassle—even from France.

However, Brexit changed this landscape. Access to some UK pension schemes from France has become more restricted. For instance:

• Some providers won’t allow flexi-access drawdown if you live outside the UK.

• Annuity-only pensions might not pay benefits abroad at all.

• Certain schemes impose high fees, poor investment choice, or strict access rules.

That said, not every UK pension needs to be moved. Many offer valuable guarantees, such as:

• Guaranteed income for life (important in defined benefit schemes)

• Protected spouse or dependent benefits on death

• Low charges or strong governance

It’s therefore crucial to review your existing pension carefully. Sometimes, the best solution is simply to leave it in place. This is why many advisers offer an initial consultation to evaluate your specific scheme before recommending a transfer.

Transfer to an Overseas Pension (QROPS)

A QROPS (Qualifying Recognised Overseas Pension Scheme) is designed for UK pension transfers abroad. French residents are eligible to transfer to a QROPS within the EEA without paying the UK’s punitive overseas transfer charge.

Here’s what you need to know:

• Since 2017, transfers to a QROPS outside the EEA are generally subject to a 25% tax charge.

• If you move outside the EEA within five years of transfer, the 25% charge can also be applied retrospectively.

• There’s an additional 25% tax on the excess amount if your pension exceeds the Lifetime Allowance (LTA) on transfer (which remains £1,073,100 in 2024).

Benefits of a QROPS for French residents:

• Payments are free from UK income tax at source

• 25% pension commencement lump sum from age 55

• Flexible drawdown options in many jurisdictions (e.g., Malta)

• Access to 100% of your fund from age 55

• Broad investment choice

• Ability to hold funds in any major currency

• Freed from UK pension legislation changes

• Exempt from UK inheritance tax on death

QROPS can be an excellent option for those with larger pensions, those wanting currency flexibility, and those wanting certainty about future UK rule changes.

Transfer to an Alternative UK Scheme (SIPP)

A SIPP (Self-Invested Personal Pension) is another popular route for British expats. Although technically a UK-based scheme, many SIPPs are specifically designed to serve non-UK residents.

Key points about SIPPs:

• They’re usually defined contribution schemes. You know what you pay in, but your retirement outcome depends on investment performance.

• You don’t have to buy an annuity—flexible drawdown is available.

• On death, your SIPP can typically be passed on to beneficiaries, sometimes free of UK tax.

• SIPPs are usually cheaper and more accessible than QROPS.

Advantages for expats:

• 25% tax-free lump sum from age 55

• Withdraw income through drawdown or flexi-access

• 100% of pension can be accessed from 55

• Wide investment options

• Funds can be held in any major currency

However:

• UK legislation changes continue to apply.

• UK pension death tax applies if you die after age 75 (beneficiaries pay their marginal rate, up to 45%).

• Income is taxed in France, but the UK-France Double Taxation Agreement (DTA) can help eliminate UK tax at source.

Taxation of UK Pensions in France

Perhaps the most critical question for expats is: How will my UK pension be taxed in France?

UK pensions are treated as earned income in France and taxed at your marginal French income tax rate.

UK schemes typically withhold UK income tax at source, but this can often be avoided.

How?

Thanks to the UK-France Double Taxation Agreement (DTA), you can apply for an NT (No Tax) code from HMRC. This code allows your UK provider to pay your pension gross (without UK tax deducted).

However, getting an NT code can be slow. Options include:

• Withdrawing your 25% Pension Commencement Lump Sum (PCLS)—which is UK tax-free anyway.

• Taking a small initial income withdrawal to trigger the NT code.

• Claiming any UK tax deducted back from HMRC at year-end.

French Social Charges:

• 9.1% social charge applies to pension income.

• Reduced to 7.4% for income under €2,000/month (or €3,000/couple).

• Exemptions may apply if you hold an EU S1 or aren’t affiliated with French healthcare.

• These nuances mean professional advice is highly recommended to navigate the taxation rules efficiently.

Conclusion: Make Informed Choices

Transferring your UK pension as a French resident is far from a one-size-fits-all decision.

For some, staying in their existing scheme offers security and simplicity.

For others, transferring to a QROPS can deliver international flexibility and escape UK legislation.

A SIPP can offer investment control at lower cost, while still retaining UK regulation.

But all these options have different tax implications in both the UK and France. That’s why it’s crucial to understand your existing scheme, define your goals, and seek independent, specialist advice before making any decision.

Your retirement security depends on making the choice that suits you best.

Still not sure what is best for you then get the free Guide from our partners at SJB Global – click here.