Portugal’s mild climate, political stability, and advantageous tax environment make it a leading destination for UK expats seeking to relocate their pension.
For those considering transferring to a Qualifying Recognised Overseas Pension Scheme (QROPS) in Portugal, understanding the tax treatment, regulatory framework, and wider wealth solutions available is essential.
In this guide, we’ll explain whether it’s possible for UK expats to transfer their pension to a QROPS in Portugal. We’ll discuss relevant tax regulations, eligibility rules, potential risks, and everything else a UK expat should be aware of before deciding to move their pension to Portugal.
What You Will Learn
- Whether a UK expat can transfer their pension to a QROPS in Portugal, and how to do it.
- The key benefits of using a QROPS as part of your international retirement strategy.
- The tax implications, fees, and potential risks associated with a QROPS transfer.
- What alternative structures – such as international SIPPs – may offer more flexibility or tax efficiency.
Can UK Expats Transfer Their Pension to a QROPS in Portugal?
To qualify as a QROPS, a pension scheme must be listed on His Majesty’s Revenue and Customs (HMRC) register of Recognised Overseas Pension Schemes (ROPS). As of May 2025, no Portuguese pension schemes appear on this list. This means UK expats cannot currently transfer their UK pension directly to a QROPS based in Portugal.
Why Is Portugal Not on the QROPS List?
For a scheme to receive QROPS approval, it must meet HMRC’s strict regulatory and structural requirements – such as minimum retirement age restrictions, reporting obligations, and consistent tax treatment.
While Portugal has a well-established pension system, no local providers currently meet the QROPS criteria.
HMRC updates the ROPS list twice monthly (on the 1st and 15th). While it’s possible that a Portuguese scheme could qualify in the future, there are no current indications that such a change is forthcoming.
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Transferring a Pension to a QROPS While Living in Portugal
UK expats residing in Portugal previously had the option to transfer their UK pension to a QROPS in another European Economic Area (EEA) country – such as setting up a QROPS in Malta – without incurring additional tax charges. However, following a policy update from His Majesty’s Revenue and Customs (HMRC) on 30 October 2024, this strategy is no longer tax-efficient for most individuals.
Updated QROPS Transfer Rules for 2025
Under current HMRC legislation, transfers of UK pensions to QROPS schemes are now subject to a 25% Overseas Transfer Charge (OTC) unless both the scheme member and the QROPS are located in the same country at the time of transfer. This means:
- UK expats living in Portugal who transfer their pension to a QROPS in Malta or any other EEA jurisdiction will incur the 25% OTC.
- The OTC exemption only applies if you are a tax resident in the same country where your QROPS is based at the time of transfer.
While jurisdictions like Malta continue to offer regulatory stability, English-speaking administration, and broad investment access, the new OTC rules significantly reduce the appeal of these schemes for expats residing in Portugal.
Is a QROPS Still an Option For Expats In Portugal?
Although technically possible, transferring a UK pension to a QROPS while living in Portugal is now unlikely to be tax-efficient unless you are willing to relocate to the same jurisdiction as the QROPS provider.
Given the complexity and potential costs, expats should reassess whether a QROPS structure aligns with their long-term retirement and estate planning objectives.
Financial Considerations When Transferring a UK Pension to an EEA QROPS
In addition to the 25% OTC, several other financial risks should be considered before proceeding with a QROPS transfer from Portugal:
| Taxes | Explanation |
|---|---|
| UK withdrawal rules | Withdrawing funds from a QROPS before the minimum retirement age of 55 (rising to 57 in 2028) may result in a tax charge of at least 40%. Strict adherence to UK pension access rules is required. |
| Double taxation risk | While Portugal maintains Double Taxation Agreements (DTAs) with most EEA countries, you must ensure your pension distributions are properly reported to avoid taxation in both jurisdictions. |
| Currency risk | Holding your QROPS in a non-euro currency (e.g. Swedish krona) exposes your pension to exchange rate fluctuations and conversion fees, which may reduce the real value of withdrawals in euros. |
Before proceeding with any QROPS transfer, it is essential to seek professional guidance. At Titan Wealth International, our expat pension specialists provide tailored advice based on your residency, financial goals, and tax profile.
We help you assess whether a QROPS – or an alternative such as an International SIPP – offers a more efficient and compliant structure for your retirement planning.
Is It Possible To Transfer a Pension to a Portuguese Scheme That Isn’t a QROPS?
Portugal’s pension system is primarily state-based. Employees must contribute a mandatory portion of their income – typically 11% – towards the public pension scheme. Individuals with insufficient contributions may qualify for a means-tested social pension.
There are also voluntary occupational and private pension schemes available. However, UK expats should be aware that transferring a UK pension to a Portuguese scheme not recognised by HMRC carries serious tax consequences. These include:
- An immediate 40% unauthorised payment charge.
- An additional 15% surcharge if the transfer exceeds 25% of your pension pot.
Beyond these tax implications, transferring to a non-recognised scheme could leave your funds outside the UK’s regulatory protections. If the provider underperforms or becomes insolvent, you are unlikely to have access to UK-based investor compensation.
Before proceeding with any pension transfer to Portugal, consult a cross-border pension transfer specialist. At Titan Wealth International, we help UK expats assess their pension transfer options, avoid unnecessary tax exposure, and structure their retirement income in a secure, compliant way.
Book Your Complimentary QROPS Review
If you’re living in Portugal and considering a QROPS – or already hold one based in the EEA – recent tax rule changes may affect your retirement strategy.
- Identify exposure to the 25% Overseas Transfer Charge (OTC).
- Review fees, performance, and cross-border tax compliance.
- Evaluate whether your QROPS still suits your needs - or if an international SIPP is more efficient.
Transferring Pension to a SIPP
For UK expats residing in Portugal, transferring your pension to a Self-Invested Personal Pension (SIPP) can be a tax-efficient alternative to a QROPS – particularly now that most EEA-based QROPS attract a 25% Overseas Transfer Charge (OTC).
SIPPs are UK-regulated pension schemes that offer significant advantages for expats:
| Feature | Explanation |
|---|---|
| Wider Investment Choice | SIPPs provide access to a broad range of investment options, including equities, bonds, ETFs, and funds—far beyond those typically available in traditional workplace pensions. |
| Contribution and Withdrawal Flexibility | You can contribute as much or as little as you choose, at any time. Withdrawals can also be tailored to suit your retirement income needs, including tax-free lump sums (up to 25%) and flexible drawdown options. |
| Cost Efficiency | SIPPs typically use clean share classes, eliminating hidden commission fees. Compared to many QROPS, SIPPs can reduce total charges by 2–5%, which can have a meaningful long-term impact on your retirement outcomes. |
| Inheritance Planning | SIPPs offer flexible estate planning options, allowing you to pass on your pension funds to beneficiaries. If you die before age 75, the funds can usually be inherited tax-free. After age 75, withdrawals made by your beneficiaries will be subject to income tax at their marginal rate. As pension assets typically fall outside your estate, they are not usually subject to UK inheritance tax. |
For many expats in Portugal, International SIPPs offer a more transparent, cost-effective, and flexible way to manage UK pension benefits without triggering additional tax charges.
Key Takeaway
In this guide, we’ve explained that transferring a UK pension directly to a QROPS in Portugal is not possible, as no Portuguese schemes currently appear on HMRC’s recognised list.
While UK expats previously used EEA-based QROPS – such as those in Malta – to access their pensions while residing in Portugal, the updated HMRC rules (effective from 30 October 2024) now impose a 25% Overseas Transfer Charge unless the individual and the QROPS are both located in the same country at the time of transfer.
Given these changes, it’s essential for expats to reassess their pension transfer strategy. Working with a specialist can help you avoid unnecessary tax charges and identify more suitable alternatives, such as an international SIPP.
At Titan Wealth International, our pension transfer specialists offer a comprehensive QROPS review to assess costs, investment strategy, and tax exposure. We’ll help you align your retirement plans with the latest regulations and provide step-by-step support throughout the transfer process.
