When moving to Portugal at retirement age, it’s a good idea to weigh up all the ways you can make the most of your pension.

You may well find that it’s beneficial to move your pension into an overseas scheme, such as a Self-Invested Personal Pension (SIPP) or a Qualifying Recognised Overseas Pension Scheme (QROPS). Under the right circumstances, these schemes could ensure you have greater control over your pensions and potentially even lower your tax bill – although certain conditions will, of course, apply.

Under the right circumstances, these schemes could ensure you have greater control over your pensions and potentially even lower your tax bill.

To move your pension into one of these schemes, you will need to meet certain criteria required: you must be living, or going to live, abroad, and you must remain living abroad. It is important to remember that it will take around ten years of receiving your pension through QROPS before you will see any real benefit – making it incredibly important to consider your options now rather than later.

Self-Invested Personal Pension (SIPP)

Placing your pension into an SIPP allows you the opportunity to invest your funds in a number of different ways (with applicable tax charges). There are two different types of SIPP: a Low-cost SIPP which you are fully in control of and a Full SIPP, which offers the widest choice of investments that you receive advice on – typically these come with higher charges.

You can invest your pension into a variety of investments, including:

  • Overseas property
  • Stocks and shares in certain companies
  • Investment trusts as authorised by the Financial Conduct Authority (FCA)
  • Unit trusts and Open Ended Investment Companies
  • Exchange traded funds (ETF)
  • Gold bullion
  • Works of art (including antiques and vintage cars)
Finance-Pension-Pot

You need to make sure you assess the best options for your pension when you move to Portugal.

Qualifying Recognised Overseas Pension Scheme (QROPS)

By definition, QROPS are HMRC approved and recognised UK pension schemes based overseas, with specific rules and regulations. It is important to remember that there are a number of schemes available that qualify as a QROPS, so you will need to assess each one in turn to work out which one best suits your requirements. There are a number of benefits that you can obtain by transferring your pension into a QROPS:

  • Tax free growth
  • Currency choice
  • Greater investment choice
  • Avoidance of inheritance taxes
  • Tax free lump sum (can be up to 30%)

Whatever overseas pension option you choose, it’s so important to utilise the services of an authorised tax and financial advisor when you are moving to Portugal to make sure that everything is in order.

Transfer your existing UK pension to Portugal

If you decide to rely on your existing UK-based pension, you will need to assess how the income you receive will be affected by the continuously fluctuating exchange rates. Given the extreme volatility of the market, this could result in you receiving a significantly different figure every month, and losing out further depending on who you send your funds with. Our currency partner, Smart Currency Exchange, can offer a number of services to help you make the most of your funds, as well as offering favourable exchange rates and a regular payments plan that can automate your pension payments for you.

Download your free Portugal Buying Guide

The Portugal Buying Guide is designed to support you through each stage of buying property in Portugal, providing relevant, up-to-date information and tips from Portugal property experts and expats who have been through the process themselves. The guide helps you to:


  Ask the right questions
  Avoid losing money
  Avoid the legal pitfalls
  Move in successfully

Download your free guide to buying abroad

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