Can You Transfer a UK Pension to Dubai? A Guide for Accessing Your Pension in the UAE

Although UK pensions cannot be transferred directly into a UAE-based scheme, this guide explains how British expatriates in Dubai can manage or transfer their UK pensions to compliant alternatives—such as Self-Invested Personal Pensions (SIPPs) and International Private Pension Plans (IPPPs).

It outlines eligibility rules, tax implications, and key steps for ensuring pension access is optimised while living in the UAE.

Is It Possible To Make a UK Pension Transfer to the UAE?

Before transferring your UK pension to the UAE, it’s essential to determine the type of UK pension you hold. UK expats typically have two types of workplace pensions:

1. Defined benefit: Also known as final salary, this is a traditional workplace pension, meaning your retirement savings depend on your salary and the length of employment.
2. Defined contribution: This is a plan both you and your employer contribute to. The funds are then invested in various assets to grow your retirement savings.

Defined contribution pensions can be easily transferred from one provider to another, although exit fees may apply, particularly for schemes established before 2001.

While it is possible to transfer a defined benefit pension to a defined contribution scheme, members of unfunded public sector schemes, such as the Teachers’ Pension Scheme or the NHS Pension Scheme, may only transfer their benefits to another defined benefit scheme.

The ability to transfer your UK pension to a defined contribution plan is crucial, as most international pension schemes are based on this model.

Consulting a qualified pension transfer adviser, such as those at Titan Wealth International, ensures a holistic evaluation of your pension arrangements. They will assess the feasibility of the pension transfer and recommend effective strategies for optimising your pension’s performance while living in the UAE.

What Are the Options for a UK Pension Transfer to the UAE?

One of the primary options for transferring a UK pension abroad is through a qualifying recognised overseas pension scheme (QROPS) established in your country of residence. QROPS are overseas pension plans approved by the HM Revenue & Customs (HMRC) as eligible to accept pension transfers from UK-registered schemes.

To be included on HMRC’s QROPS list, an overseas scheme must adhere to rules similar to those governing UK pension plans. For instance, the minimum age for accessing pension benefits must be 55 (increasing to 57 from April 2028).

You may transfer a UK pension to a QROPS without incurring fees, provided you meet one of the following requirements:

• You’re a UK non-resident
• You plan to retire abroad
• You’re planning to move overseas within the next 12 months

However, the HMRC’s QROPS list doesn’t currently include any schemes based in the UAE. While transferring pension savings to a QROPS in another foreign jurisdiction is possible, doing so would trigger a 25% Overseas Transfer Charge (OTC) if the scheme is not located in your country of residence.

As an alternative to transferring to a QROPS, you may consider transferring your pension to individual pension plans based in the UK, such as a regular or international Self-Invested Personal Pension (SIPP). These schemes provide UK expats with greater flexibility in managing retirement savings while residing in Dubai.

Additionally, you may explore the option of transferring your retirement savings to an offshore pension plan. However, such plans do not offer UK tax reliefs and may entail additional tax charges.

What Is a Self-Invested Personal Pension (SIPP) in the UK?

As a UK expat living in Dubai, transferring a UK pension to a SIPP enables flexible access to diverse investment options, provides more control over your retirement savings from overseas, and allows withdrawals in multiple currencies.

SIPPs are UK-based personal pension accounts regulated by the Financial Conduct Authority (FCA) and approved by HMRC. They provide access to a wide selection of investments, including the following:

• Mutual funds and ETFs
• Company shares in the UK and abroad
• Open-ended investment companies (OEICs)
• Real estate investment trusts (REITs)

You’re allowed to contribute 100% of your annual income to a SIPP, up to a maximum of £60,000 if you are a UK resident. If you are non-resident, you may contribute up to £3,600 gross annually and still receive tax relief.

However, for up to five tax years after leaving the UK, you may be eligible for tax relief on contributions up to the full annual allowance (£60,000), provided you were UK-resident in at least one of the five preceding tax years. This includes personal and employer contributions, along with any applicable tax reliefs.

There are no limits on the amount you can transfer from an existing pension to a SIPP, as transfers do not count towards the annual allowance.

SIPP contributors are also eligible for a pension commencement lump sum (PCLS) of 25% upon reaching the retirement age of 55 (rising to 57 on 6 April 2028). This change applies equally to UK-based SIPPs and qualifying overseas schemes (QROPS), in line with updated HMRC regulations.

This means you can withdraw your pension benefits tax-free up to the lump sum allowance (LSA) of £268,275. The remaining pension funds may be subject to income tax depending on your residency status.

Higher-rate (40%) or additional-rate (45%) tax relief is only available if you are a UK tax resident and submit a self-assessment tax return.

Non-residents are not eligible for higher-rate relief and may only receive basic-rate relief (20%) on contributions up to £3,600 gross annually, unless they have UK-relevant earnings or are within the five-year post-residency relief window.

What Are the Tax Implications of Transferring a UK Pension to an International SIPP?

UK expats contributing to a SIPP are eligible for government tax relief at the basic rate of 20%. Non-residents who do not have UK-relevant earnings may still contribute up to £2,880 net per tax year, which HMRC will gross up to £3,600 gross with basic-rate tax relief.

For example, if you contribute £2,880 to your SIPP, HMRC will add £720, bringing the total contribution to £3,600. This is the maximum permitted annual contribution for most UK non-residents.

If you are a UK tax resident, you may qualify for additional tax relief on your contributions, provided you file a self-assessment tax return. The rates of additional relief are:

• 20% extra relief on the portion of income taxed at the 40% rate (i.e., higher-rate taxpayers).
• 25% extra relief on the portion of income taxed at the 45% rate (i.e., additional-rate taxpayers).

Higher- and additional-rate relief is not available to non-residents unless they have UK-relevant earnings and remain eligible under the five-year post-residency contribution rules.

What Is the Difference Between International and Standard SIPPs?

International and standard SIPPs share many features, but the former are specifically designed for UK non-residents and expats who don’t plan on returning to the UK. These plans enable you to access and manage your UK pension efficiently whilst living in the UAE.

The table below outlines the key differences between international and standard SIPPs:

Both plans are regulated by the UK authorities, providing a secure environment for growing retirement savings. Additionally, they allow you to pass pension benefits to your beneficiaries free of UK inheritance tax if you die before age 75. Otherwise, the funds are taxed at the beneficiary’s marginal income tax rate.

Considering their respective features, standard SIPPs are typically more appropriate for expats who plan to return to the UK, while international SIPPs are well-suited for those who intend to retire in the UAE.

What Are the Benefits of Moving a UK Pension to an International SIPP?

Transferring your UK pension to an international SIPP while living in Dubai provides the following benefits:

How Do You Move a UK Pension to an International SIPP?

To transfer your pension to an international SIPP as a UK expat in Dubai, follow the steps outlined below:

1. Understand your UK pension scheme: Before deciding to move your pension to an international SIPP, it’s crucial to understand the type of pension you have (defined benefit or defined contributions). This assessment will help determine whether transferring to an international SIPP is appropriate and beneficial. Engaging a qualified financial adviser can provide valuable guidance to ensure that an international SIPP aligns with your long-term retirement objectives and personal circumstances.
2. Research international SIPP providers: If international SIPP is a suitable pension transfer option, research the available providers. Pay close attention to features like investment options, customer service, and fees associated with the transfer.
3. Choose a provider and apply: Once you have identified a suitable provider, contact them to initiate the application process. Providers will typically supply the necessary documentation for completion. Gathering details of your existing pension plans beforehand is advisable, as this information may be required during the application.
4. Obtain pension transfer value: Request a pension transfer value from your current pension provider. This statement will outline the current value of your pension, along with any applicable charges or penalties, such as exit fees, that may impact the transfer.
5. Assess investment options: Following the successful transfer of your pension, review the investment options offered by your international SIPP provider. Allocate your funds to investments that align with your retirement goals and risk tolerance.

Should You Transfer a UK Pension to an Offshore Pension Plan?

If moving your pension to a SIPP is not feasible, you may consider transferring to an offshore scheme, such as an international private pension plan (IPPP). Originally established to serve employees of multinational corporations, IPPPs are now widely utilised by UK expats seeking pension solutions that offer global mobility and cross-border flexibility.

IPPPs are usually located in low-tax offshore jurisdictions like Guernsey and the Isle of Man, meaning they provide benefits such as:

• Lump-sum payments
• No restrictions on investments
• No limit on the benefits you can receive

Since most IPPPs aren’t approved by HMRC, transferring your UK pension to one of these schemes would result in a minimum 40% unauthorised payment charge and an additional 15% penalty if you transfer more than 25% of your fund.

Is It Possible To Transfer UK Retirement Savings to a National Pension Scheme in the UAE?

The UAE nationals are entitled to benefits under the General Pension and Social Security Authority (GPSSA), which provides pension and social security coverage to Emirati citizens employed in the government or private sectors. Anyone older than 18 and younger than 60 is eligible for the GPSSA as long as they’re a UAE national.

This plan typically isn’t suitable for expats, as eligibility is contingent upon acquiring UAE citizenship—a status granted only under exceptional circumstances, including:

1. Marriage to a UAE national
2. Descent from an Emirati family
3. Residency in the UAE for more than 30 years
4. Recognition for exceptional contributions in fields such as science, investment, or medicine
5. Receipt of a Golden Visa through an investment of at least AED 2 million in UAE real estate

If one of these criteria applies and you’re employed by a UAE employer, you may become eligible to participate in the GPSSA scheme. However, the GPSSA only allows for the accumulation of pension benefits during employment within the UAE and does not permit the transfer of existing UK pension assets into the scheme.

Can You Withdraw a UK Pension Tax-Free in the UAE?

The taxation of your pension benefits whilst living in the UAE depends on your tax residency status. If you are a UK resident at the time of withdrawal, any amount exceeding the lump sum allowance will be subject to UK income tax.

If you are a UAE tax resident, your UK pension benefits will not be taxed in the UAE. Under the terms of the double taxation agreement (DTA) between the UK and the UAE, pension income is taxable only in your country of residence.

As the UAE does not levy personal income tax, withdrawals received while resident in Dubai are effectively tax-free.

However, the default position of most UK pension providers is to withhold UK income tax from non-PCLS (Pension Commencement Lump Sum) withdrawals, regardless of your overseas residency status.

To ensure your pension income is paid gross (i.e. without UK tax deducted), you must apply for a ‘No Tax’ (NT) tax code from HMRC.

This requires obtaining a UAE Tax Residency Certificate and completing the relevant double tax treaty (DTT) claim forms. While the full process is not covered here, expats should be aware that this step is essential to access tax-free pension income in the UAE.

You are considered a tax resident in the UAE if you meet one of the following criteria:

• Your residence, as well as personal and financial ties, are primarily in the UAE.
• You spend more than 183 days in the UAE in a single tax year.
• You are present in the Emirates for over 90 days in a 12-month period and have strong ties to the UAE, provided you hold a valid residency visa or are a UAE or GCC member state national.

Additionally, under the UK’s temporary non-residence rules, pension income may still be subject to UK tax if you return to the UK within five years.

Specifically, if you were a UK-resident in four of the seven tax years before moving abroad, and you return within five years, certain income—such as flexible drawdown payments—may be retrospectively taxed by HMRC.