Is it possible to transfer a UK pension to Poland?

Accumulated pension schemes

Many Brits residing in Poland or Polish citizens who have returned home after living in the UK may be faced with a significant question regarding what to do with their accumulated pension schemes in Britain.

This has become a more pressing issue in light of Brexit and the added uncertainty it has created.

Unfortunately, the answer to whether one can transfer their UK pension to a Polish scheme is a simple ‘no’.

However, this does not leave you without options. If you are a resident of Poland with a UK pension, there are alternative courses of action available to you.

1 – Transfer Your Pension to an International SIPP

A SIPP (Self Invested Personal Pension) is a UK-based pension scheme set up under trust that enables you to accept the cash equivalent transfer value (CETV) from a defined benefit scheme or the funds from a defined contribution scheme.

Some benefits of transferring your pension to an International SIPP include:

• It is covered by the UK Poland double taxation treaty, ensuring that your 25% pension commencement lump sum (PCLS) will be tax-free.
• You have investment flexibility to determine how your pension is invested.
• You have the option to hold your pension in a currency that aligns more closely with your future expenses and liabilities (e.g. EUR).
• You have greater flexibility to decide who will be nominated as beneficiaries under your pension.
• You have flexibility in withdrawing pension income and lump sums (from minimum pension age of 55).

2 – Do nothing

It may be best to leave your pension where it is. 

However, it would still be worth reviewing the investments within your pension to ensure that they align with your objectives, values and risk profile.

If your pension is a defined benefit/final salary scheme, there will be strong reasons to leave it as is. 

At the very least, you should be aware of the benefits available through your current scheme before considering giving it up.

3 – Qualifying Recognized Overseas Pension Scheme (QROPS)

A Qualifying Recognised Overseas Pension Scheme (QROPS) is an overseas pension scheme that meets certain requirements set by HMRC. 

The main function of QROPS is that it allows British expats to move their pensions overseas.

In most cases, an International SIPP (see above) will be a better option. 

However, if your pension funds are near or in excess of the Lifetime Allowance, then a QROPS may be worth considering.

QROPS tax treatment in Poland

It is important to understand the implications of any double taxation treaty between Poland and the country in which any QROPS is located.

Sometimes it will be much less favorable than the treaty between the UK and Poland.

Read our article: Retiring to Poland from the UK: What You Need to Know.