How to transfer UK pension to Canada

Planning to move to Canada, or even retire there? One of the many things you’ll need to add to your to-do list before your move is your pension. You may want to transfer it overseas, so that you can easily access your hard-earned pension income.

In this helpful guide, we’ll be taking a look at how to transfer a UK pension to Canada.

We’ll cover everything you need to know, including how to do it step-by-step and which types of UK pensions are eligible for overseas transfer. We’ll also touch on the costs, fees and potential tax implications.

And remember, if you’re looking to move pension savings or other income across international borders, the Wise account is an ideal solution. It offers low transfer fees*, the mid-market exchange rate and a choice of 40+ currencies, as well as being safe and secure for transferring large sums.

Can I transfer my UK pension to Canada?

Yes, you should be able to transfer a UK private or workplace pension to Canada.

However, it all depends on the conditions and restrictions of your particular pension scheme. You’ll also need to move your pension to what is known as a Qualifying Recognised Overseas Pension Scheme (QROPS) in Canada.

This means that it’s on HMRC’s list of approved QROPS schemes. Moving your pension to a QROPS makes it easier to transfer your pension, as well as avoiding a high tax bill. We’ll take a close look at QROPS and how it works later in this guide.

An important thing to note is that you’ll need be at least 55 years old to move your pension to a QROPS in Canada.¹

And you should also know that transferring UK-based pensions abroad may have significant tax implications. These can sometimes be complex and costly, depending on the country you’re moving to. So, it could be a good idea to speak to a pensions or tax specialist to get some expert advice.

Which UK pensions are eligible for transfer to Canada?

You should be able to transfer many types of workplace or private pension from the UK to Canada. This includes:²

• Defined benefit (DB) or ‘Final Salary’ schemes
• Defined contribution (DC) or ‘Money Purchase’ schemes

However, not every type of UK pension is eligible for transferring overseas.

You won’t be able to transfer your UK state pension, for example. But you will be able to receive your state pension payments while living in Canada. If you’re up-to-date with your National Insurance (NI) contributions, you’ll need to apply to the International Pension Centre within 4 months of your state pension age.³

It’s not possible to transfer unfunded civil service pensions abroad either. This means that you may not be able to move this kind of pension if you’re a teacher, police officer or NHS worker.²

You’ll need to check the specific conditions of your pension though. Some, such as defined benefit schemes, can have restrictions on transfers.

How to transfer your UK pension to Canada - a step by step guide

Transferring a UK pension to Canada will involve a few key steps.

The first is to check that your pension is eligible for transfer and then you’ll need to find a suitable QROPS scheme in Canada. And finally, there’s the application paperwork to complete.

We’ll run through these steps in more detail in just a moment. But first, some useful info on QROPS and how these schemes work.

Qualifying Recognised Overseas Pension Schemes (QROPS)

The most crucial part of transferring a UK pension overseas is finding a QROPS. These are pension schemes that have been vetted and approved by HMRC, and which allow UK nationals to transfer their pensions overseas.

Most UK pensions can only be moved to a QROPS. It may be possible to move your pension to a non-QROPS scheme, but you’ll face a whopping 40% tax bill on the transfer.⁴

It’s important to note though that transferring your pension to a QROPS in Canada may not mean you avoid tax charges altogether.

💡 Learn more: What is a QROPS?

Steps to transfer your pension

Now, here’s a step-by-step look at the process for transferring your pension from the UK to Canada:

1 - Find a QROPS scheme

The first thing to do is to find a QROPS in Canada. You’ll need to check the recognised overseas pension schemes notification list here. Sorted alphabetically by country, these are all the schemes that meet HMRC’s requirements to be a QROPS.

The good news is that you’ll find Canada on this list, and there are a few different QROPS to choose from. Just bear in mind that this list is updated regularly, so you should check back before you plan to make your transfer.

2 - Check that your UK pension allows transfers

Next, you’ll need to contact your pension provider to find out if it permits transfers overseas. It should if it’s a QROPS you’re transferring to, but it’s always worth double-checking.

There may also be conditions, costs or other tax implications you need to know about before setting up the transfer.

And remember that you won’t be able to transfer your pension to Canada if you’re not yet 55.¹

3 - Submit the transfer application form

The final step is to apply for the transfer. But before you do this, it’s strongly recommended to speak to a financial advisor or pensions specialist to get some expert advice.

When you’re ready, you’ll need to download and complete Form APSS 263 from the UK Government website. This asks for information such as:

• Your personal details and National Insurance number
• Address and contact information for you in the UK (or your previous UK address if you’ve already moved)
• Details of the QROPS - including the name, address, country in which the scheme is established and regulated and its HMRC reference number
• Your employment details (if relevant).

This form needs to be submitted to your UK pension scheme administrator to start the transfer process.

It’s really important to make sure you check your form carefully before submitting it, and don’t miss out any information.

If you are asked for more info, provide it promptly. If you fail to provide all the requested details within 60 days of submitting your form, your transfer will be taxed at 25% - whether or not you’re exempt from other taxes or charges.⁴

Timeframes and costs involved

How long it takes to transfer a UK pension overseas varies, depending on:

• The complexity of your personal circumstances
• The efficiency of the pension providers involved in both countries
• How quickly you respond to requests for information.

You’ll need to speak to your pension provider (and perhaps the QROPS provider in Canada too) to find out more about specific timeframes for the transfer to be completed. But as a minimum, you can expect it to take around 3-6 months.¹

In terms of costs, there is one main charge you need to know about. This is the overseas transfer charge of 25%. If you’re living in the same country as the QROPS you’re transferring to - and you don’t leave for at least 5 years - you shouldn’t have to pay this charge.⁴

However, it may apply if your transfer exceeds your overseas transfer allowance (OTA). This is currently set at £1,073,100, although it can differ in some circumstances. If you exceed your OTA, the 25% charge may be payable on the excess.⁴

Tax considerations of transferring your UK pension to Canada

Tax is never simple, especially when pensions are involved. This is why it’s always a good idea to get some professional advice before transferring a pension to another country.

But generally speaking, here’s what you need to know about tax when you move a UK pension to Canada.

If you’re living in the same country as the QROPS, you shouldn’t be liable for tax on the transfer. So if you’ve already moved to Canada and live there permanently, and transfer your UK pension to an Canada-based QROPS, you shouldn’t have to pay tax.⁴

However, there are still some tax implications you need to know about, depending on your circumstances.

For example, you may have to pay tax on your pension transfer to Canada if:

• You make a transfer that exceeds your overseas transfer allowance (OTA) of £1,073,100⁴
• You transfer your pension to a non-QROPS (which is usually not permitted, but still technically possible)
• You withdraw money from a QROPS - there’s the possibility that Canada’s withholding taxes may be applied, and the amount is then added to your taxable income for the year.¹

Save money on pension transfers to Canada with Wise

After reading this, you should have a better idea of how to transfer your UK pension to Canada, including the steps, costs and taxes involved.

But it’s also important to think about how you’ll actually receive your pension sum in Canada.

A key consideration is that your pension pot will need to be converted from British pounds (GBP) to Canadian dollars (CAD).

If you use a local bank account, you could be stung by high currency conversion fees and poor exchange rates. As it’s likely to be a large amount you’re transferring, this could make a serious dent in your retirement funds.

Luckily, there’s a better solution available. Open a Wise account and you can manage your money in 40+ currencies, including GBP and CAD.

You can use it to send and receive money internationally, for low fees* and mid-market exchange rates.

This could be hugely useful for transferring your pension between countries, or even for receiving your UK state pension or other UK-based income while living in Canada.

Sign up with Wise today

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Sources used:

1. Unbiased - Can I transfer my UK pension to Canada?
2. Blacktower Financial Management Group - Qualifying Recognised Overseas Pension Scheme (QROPS)
3. GOV.UK - State Pension if you retire abroad
4. GOV.UK - Transferring your pension

Sources last checked on date: 17-Jan-2025