An International SIPP (Self-Invested Personal Pension) is a UK-registered pension arrangement tailored for British nationals living overseas. It allows expats to retain control over their UK pension investments while benefiting from the regulatory protections of the UK pension system.
Although similar in structure to a standard UK SIPP, this version includes features specifically designed to suit the needs of individuals living outside the UK.
Who Might Benefit?
This type of pension is particularly relevant for those who:
- Live abroad but want to retain control over how their UK pension is invested and accessed
- Prefer the governance and protection of the UK regulatory framework
- Are former UK residents with UK pension pots
- Cannot access a suitable QROPS in their current country
- Intend to draw their pension income while living internationally
- Want to consolidate several UK pensions into one scheme
Advantages
- Flexible Access: Withdrawals can start from age 55 (rising to 57 in 2028), with options for flexible drawdown.
- Broad Investment Choice: Investors can select from a wide range of assets, including funds, shares, ETFs, and fixed income products.
- Multi-Currency Accounts: Offers the ability to hold and invest in various currencies, helping to manage exchange rate exposure.
- Tax Efficiency: With appropriate planning and the presence of a double taxation treaty, withdrawals may attract reduced or no UK tax (NT code required).
- Pension Consolidation: Allows for the merging of multiple pension arrangements into one manageable plan.
- Greater Control: The investor has discretion over investment choices and retirement strategy.
- UK Regulation: Operates under FCA rules and may be covered by the Financial Services Compensation Scheme (FSCS), providing a degree of consumer protection.
- Portability: Accessible from almost any country, ideal for internationally mobile individuals.
- Estate Planning: Subject to current rules, pension funds can usually be passed to beneficiaries free of UK inheritance tax (although this is due to change in April 2027, and tax treatment depends on individual circumstances and may change)
Potential Drawbacks
- No Tax Relief for Non-UK Contributions: In most cases, individuals not earning UK-taxable income will not benefit from tax relief on new contributions.
- Varied Fee Structures: Providers charge different fees. While competitive options are available, charges should be reviewed carefully.
- Local Tax Considerations: Although some withdrawals may be tax-free in the UK, other jurisdictions may treat them as taxable income. Local advice is essential.
- Subject to UK Rules: Despite being tailored for expats, the pension remains under UK legislation, including age restrictions and tax treatment changes. For instance, UK inheritance tax rules are being amended in 2027, which may impact planning.
Is There a ‘Best’ International SIPP?
There is no universal solution. The most appropriate provider or platform depends on various factors, including:
- Your country of residence
- The size of your pension fund
- Your investment experience and preferences
- Whether you are using a financial adviser
- Contribution and drawdown needs
Things to Consider When Choosing a Provider
- Tax rules in your country of residence
- Platform fees and investment access
- Customer service and online functionality
- Whether you want a self-managed or advised solution
Summary
An International SIPP offers expats a structured, tax-efficient way to manage their UK pensions while abroad. It provides flexibility, investment choice, and global accessibility, making it a strong option for those looking to maintain control of their retirement planning outside the UK.
However, due to frequent changes in pension legislation and cross-border tax rules, personalised advice is essential. A regulated, independent financial adviser can help ensure the strategy you adopt remains suitable over time.
If you would like to explore whether an International SIPP fits your needs, please feel free to schedule an obligation-free call below, as a full review of your circumstances would be needed.
