How to transfer UK pension to Italy

Dreaming of retiring to Italy from the UK? You’ll have a lot of planning to do, but a crucial thing to add to your to-do list is sorting out your pension.

You might want to transfer your UK pension to Italy, but is it possible? Find out everything you need to know here in our helpful guide.

We’ll run through the steps involved, which UK pensions are eligible for transfer and how to get started. We’ll also touch on the potential costs and tax implications involved.

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 Italy?

Unfortunately, it may not be possible to transfer your UK private pension directly to Italy. At least, not in the same way as you can in some other countries, or without incurring a hefty tax bill.

How it normally works is that you’ll move your UK pension to a Qualifying Recognised Overseas Pension Scheme (QROPS) in the country you’re moving to.

This would mean that it’s on HMRC’s list of approved QROPS schemes. These are designed to make it easier to move pensions abroad - and help UK expats avoid high transfer fees and taxes.

Crucially, it can often be the only way to transfer a UK pension abroad. This is because many UK pension providers won’t facilitate or allow transfers to non-QROPS schemes.

The only snag is that Italy doesn’t have any schemes on HMRC’s QROPS list at the moment. This is likely due to incompatibilities between UK and Italian pension systems.¹

There is a potential workaround, however. You may be able to transfer your pension to an EU QROPS or an approved scheme in another country, such as Spain or Germany for example.

Whether or not you can do this depends on the conditions and restrictions of your particular pension scheme. Some may not permit overseas transfers at all.

Whatever your circumstances or retirement plans, it’s important to remember that transferring UK-based pensions abroad can have significant tax implications. These can sometimes be complex and costly, depending on the country you’re moving to.

So, it’s strongly recommended to speak to a pensions or tax specialist to get some expert advice.

Which UK pensions are eligible for transfer to Italy?

Not every type of UK pension is suitable for transfer overseas.

If you’re moving your pension to an EU-based QROPS, you should be able to transfer most types of private and workplace pension.

It’s important to check the specific conditions of your pension though - as some have restrictions on transfers.

One pension type you definitely won’t be able to transfer overseas is your UK state pension.

The good news is that you can still receive your state pension payments while living in Italy. Before you leave, you’ll just need to make sure you’re up-to-date with your National Insurance (NI) contributions, or check whether you meet other eligibility criteria (i.e. having lived or worked abroad).

To receive UK state pension payments into an Italian bank account or international account, you’ll need to apply to the International Pension Centre within 4 months of your state pension age.²

If you have a defined benefit civil service pension (i.e. as a teacher, NHS worker or police officer), you may face difficulties in transferring it abroad - no matter where you’re moving to. You can usually receive pension payments overseas, but may not be able to transfer the pension to a new provider.³

You’ll need to contact your pension provider for more information and to find out about your options.

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

There are a few steps involved in transferring a pension overseas. Before you do anything else though, it’s recommended to seek professional financial and/or tax advice.

Then, you’ll need to check that your pension is eligible for transfer, and find a suitable EU-based QROPS scheme to move it to. There’s likely to be quite a bit of paperwork involved.

We’ll run through these steps in more detail in just a moment. But first, a quick explanation of what QROPS is and how it works.

Qualifying Recognised Overseas Pension Schemes (QROPS)

Qualifying Recognised Overseas Pension Schemes (QROPS) are schemes in other countries that have been vetted and approved by HM Revenue & Customs (HMRC).

Not all countries are on HMRC’s QROPS list. Unfortunately, Italy doesn’t have any approved QROPS schemes, although some other EU countries do.

Most UK pensions can only be moved to an HMRC-approved QROPS. It may be possible to move your pension to a non-QROPS scheme, but the enormous downside to this is that there’s a whopping 40% tax bill to pay on the transfer.⁴

It’s important to note though that transferring your pension to a QROPS may not mean you avoid tax charges altogether. Again, it’s a good idea to get professional advice to understand your options and obligations.

💡 Learn more: What is a QROPS?

Steps to transfer your pension

Ready to transfer your UK pension to Italy? Here’s how to do it step-by-step, in this case via a QROPS scheme based in another EU country.

1 - Find a suitable QROPS within the EU

First of all, you’ll need to find a suitable QROPS in an EU country like Spain or Germany. Although there aren’t any QROPS in Italy (which would be easier), taking this route will indirectly allow you to move your pension out of the UK and into the EU.

To find a QROPS, check HMRC’s recognised overseas pension schemes notification list here. Handily, it’s sorted alphabetically by country.

2 - Make sure your UK pension allows overseas transfers

The next important step is 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 not every type of pension is eligible for transfer outside of the UK.

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

3 - Complete the application form for the transfer

Once you’ve found a QROPS, checked your pension conditions and perhaps also spoken to a financial advisor or pensions specialist, the final step is to apply for the transfer.

You’ll need to download and complete Form APSS 263 from the UK Government website.⁴ 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)

You’ll need to submit your completed application form to your UK pension scheme administrator to start the transfer process.⁴

It’s really important to provide all the information you’re asked for, and not miss anything out. If you’re asked for further details, respond as quickly as you can.

If you fail to provide all the requested details within 60 days of submitting your form, your transfer will be taxed at 25%, This applies 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 case-by-case. It may depend on the processes and efficiency of the pension providers involved in both countries. If you have complex personal circumstances, this can slow things down - as can any delays in responding to requests for information.

For info on specific timeframes for your transfer, you’ll need to speak to your pension provider. It could also be worth speaking to the QROPS provider too.

Ultimately though, you should manage your expectations. Pension transfers between countries are rarely straightforward and they usually take at least a few months.

Now, how much will it cost you to transfer a UK pension overseas? There is one main cost you need to know about - the overseas transfer charge of 25%.⁴

If you manage to transfer your pension to an EU QROPS and you’re living within the EU - and stay there for at least 5 years - you shouldn’t have to pay this charge.⁴

However, you might still be liable for it if your transfer exceeds your personal 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 Italy

When it comes to tax and pensions, things are never straightforward. It can become even more complicated when you’re trying to navigate rules in more than one country.

This is why it’s always a good idea to seek professional advice before transferring a pension to another country.

You’ll need to find out whether you’re liable for the 25% transfer tax we discussed earlier, or a higher 40% charge if you’re transferring to a non-QROPS (which is usually not permitted, but still technically possible). There may be other tax implications you need to know about too.

Save money on pension transfers to Italy with Wise

After reading this guide, you should have a better idea of how to transfer your UK pension to Italy.

You may not be able to transfer your pension directly to Italy, but we’ve covered everything else you need to know about indirect transfers to another EU-based QROPS. This includes the steps, costs and taxes involved - and the importance of seeking professional pensions or tax advice.

But it’s also a good idea to think about how you’ll actually receive your pension sum in Italy. A key consideration is that your pension pot will need to be converted from British pounds (GBP) to euros (EUR).

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 EUR.

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 la bella vita in Italy.

Sign up with Wise today

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Sources used:

1. International Adviser - All French and Italian Rops dropped from UK pension list
2. GOV.UK - State Pension if you retire abroad
3. Chase Buchanan - Pros and Cons of QROPS Pension Transfers for Defined Contribution or Defined Benefit Schemes
4. GOV.UK - Transferring your pension

Sources last checked on date: 16-Jan-2025