Can I transfer my UK pension to New Zealand?

You can transfer your pensions from the UK to New Zealand, but there’s plenty to consider beforehand.

We look at the rules and regulations and what you need to take into account. 

Transferring to other countries: India | Canada | Malta | Spain | Portugal | Australia

What is QROPS?

Since 2017, all pensions transferred from the UK to New Zealand must be put into a Qualifying Recognised Overseas Pension Scheme (QROPS) or a Self-Invested Personal Pension (SIPP). 

There are certain tax and investment implications to using QROPS pension, or ROPS, which features a range of benefits, including: 

• A QROPS scheme is generally taxed according to local rules, which can differ significantly from UK rules. In some cases you could end up with a lower tax bill.
• QROPS offer a broad choice of investments from across the global market, which may give you access to more investments than your current pension.
• A new ‘overseas transfer allowance’ (OTA) was introduced on 6 April 2024 to replace previous checks against the lifetime allowance. The OTA is £1,073,100 for the tax year 2024/25. Transfers over this amount into a QROPS scheme will attract a 25% tax charge on the excess amount. 

What are the rules for transferring my pension to New Zealand?

To open a QROPS and move your UK pension to New Zealand, there are certain regulations that must be met.

Here are the key rules: 

• Your scheme must conform to the definition in the HMRC’s Pension Tax Manual 
• Your scheme must be an overseas pension created outside the UK, and meet the regulations test by being taxed as an occupational scheme in another country 
• Your scheme must be a Recognised Overseas Pension Scheme (ROPS] 

• It must pass a benefits tax relief test 
• Benefits are payable from the age of 55, except in the case of illness 

The trustees of the UK scheme have a responsibility to check if the scheme is a QROPS or not. Otherwise, the transfer could be an unauthorised payment, resulting in tax penalties.

What are the benefits of transferring your UK pension to New Zealand?

There are many tax implications to transferring your UK pension to New Zealand, as your pension will be taxed under New Zealand tax rules.

The timing of when you withdraw money from your pension could also significantly affect your tax bill.  

Similar to other big decisions, it's a good idea to seek professional advice beforehand. 

Here are some of the pros when you transfer: 

• Benefits paid in New Zealand are governed by New Zealand tax rules, although withdrawals made within five years are subject to UK tax rules.
• There may be less tax to pay than with a UK scheme, but you should take advice to check the details.

What are the disadvantages of transferring your UK pension to New Zealand?

There are some disadvantages to be aware of when transferring your UK pension to New Zealand, but they may be avoided with some research and professional advice. 

It’s vital you avoid making the wrong transfer to a scheme that is not qualified by HMRC, as this could land you with a tax bill of up to 55% of the value transferred. 

Payments from the scheme are subject to UK tax rules for five tax years following the transfer.

The QROPS scheme needs to report to HMRC on payments made from the scheme for 10 years following the tax year in which you leave the UK. Unauthorised payments, like taking money before you turn 55, could incur a tax charge.  

How do I transfer my UK pension to New Zealand?

If you’ve decided to transfer your UK pension to New Zealand, you can start the process by sending your current pension provider a letter of authority, which will tell them who is acting on your behalf. 

You’ll also need to request various vital forms concerning the transfer of your pension and the transfer value, which you can do over the phone. 

Once you have the paperwork, you’ll have a lot to sort, but a financial adviser may be able to offer guidance so you can get your pension transferred without any issues. 

Can I access my state pension?

If you retire to New Zealand, you'll still receive your UK state pension if you have sufficient National Insurance contributions and are of retirement age. 

But you won’t benefit from the annual UK increases in the state pension.  

What else to consider before moving to New Zealand

You’ll want to plan carefully before moving to New Zealand. 

Here are some key financial considerations: 

• Your new home: How will you fund your New Zealand home – with a mortgage, savings or the sale of your current property? If you’re taking out a mortgage, a broker can help you determine how much you can borrow. 
• Sort your tax affairs: HMRC must know about your move and updated circumstances. A financial adviser can help you decide how to tell HMRC, clarify your tax affairs and advise you on making the most of your pension. 
• Inheritance: When you own a property in New Zealand, draw up a will to ensure the interests of your loved ones are thoroughly protected should something happen to you.    
• Get insurance: You’ll need to insure your life in New Zealand. It's worth finding the best policy for your home and car, and potentially private medical insurance. 
• Open a New Zealand bank account: It’s a good strategy to open a New Zealand bank account before you arrive. It means you’ll be able to transfer funds in advance of your move. Make sure you have several forms of ID before contacting your chosen bank.  

Before you start looking for your new property in New Zealand, a decent savings fund is vital if you want to visit the country to find your new home. It’s also wise to have money set aside for transporting your belongings.  

If you want to retire to New Zealand, ensuring you transfer your UK pension properly is an essential first step.

Most types of pension schemes are transferrable to New Zealand, including occupational, final salary, defined benefit, defined contribution, self-invested and small self-administered schemes.

Need advice on transferring your pension?

Transferring your pension when planning to move to another country can be complex, but you don’t have to do it alone. 

Unbiased can quickly match you with a qualified financial adviser who can ensure the process is as smooth as possible.