If you are considering living abroad, you might be wondering about the impact of doing so on your retirement income. In this article, we explore the pension-related issues you need to consider.
Firstly, Armed Forces pensions are claimed and paid in the same way no matter where you live. Once the pension is in payment, the scheme requires the member to complete a Life Certificate every two years and, if the form is not returned as instructed, the pension will stop – so do not ignore this piece of important personal admin!
Armed Forces pensions are normally taxable in the UK, even if you are paying other tax abroad. If your pension is being taxed in UK, in order to prevent your money from being taxed twice, visit Tax Treaties and arm yourself with a copy of any Double Taxation Agreement which exists between the UK and your new country of residence – then make sure your accountant in your chosen country is aware of it.
There are some countries in which you can choose to have your pension taxed under the local tax regime – eg. Nepal or the Channel Islands – and there are others that insist on the tax being paid in the country of residence– eg. Australia and Canada. Wherever you are going to live, go armed with the latest information at Tax on Income Living Abroad – and remember that tax rules do not remain static!
An AFPS pension can be paid into an account in many, but not all, overseas countries.
Details of countries to which pensions can be paid and the monthly cost of the transfer, visit Overseas Mandate Payments. You can also email veteransukpension@equiniti.com or ring 0345 121 2514 from UK or +44 1903 768625 from overseas. These are also the numbers to ring should you need to make a change to the way that your pension is paid or chase up a P60. You can also seek help by completing an online query with Equiniti. Please note, the account must name you as a holder – it can be in your name only or a joint account, but your name must be there.
The State – or Old Age – Pension is based on the individual’s National Insurance Contributions (NICs) – currently, 35 years’ worth of NICs are required to qualify for a full State Pension. Your State Pension Age (SPA) is currently 67 or 68 but keep an eye on possible changes at Check Your State Pension Age .
You will not have to pay NICs whilst living abroad – but you can. The options are:
To pay voluntary NICs. If you don’t do so immediately you can buy back up to six years’ worth of contributions to fill any gap which has occurred.
Not to pay NICs and accept that you will receive only the proportion of the State Pension that your NICs have paid for.
When you are approaching your SPA, you can claim online at New State Pension How to Claim.
The State Pension is paid gross (i.e. before tax) and will have to be declared on your tax return. Once in payment, it will not necessarily rise annually as it would in the UK. For example, it does rise if you live in the USA but it does not rise if you live in Canada.
More information about NICs and the State Pension is available here .
16 June 2025 – © 2025 Forces Pension Society
