If you are considering retirement in South Africa, it is important to understand how to transfer a UK pension to South Africa—or more precisely, what your available alternatives are.
While direct transfers to South African pension schemes are not currently permitted under HMRC rules, other structures such as international Self-Invested Personal Pensions (SIPPs) can provide UK expats with tax-efficient and flexible retirement planning options.
This article explains whether and how you can transfer a UK pension to South Africa, outlines the associated tax implications of a pension transfer, and assesses your eligibility for South African pension benefits as a UK expat.
What You Will Learn
- Whether it’s possible to transfer a UK pension to South Africa
- How to move a UK pension to South Africa
- How pensions are taxed in South Africa
- If you can transfer a pension from South Africa to the UK
Can I Transfer a UK Pension to South Africa?
You can’t transfer a UK pension to South Africa directly as there are no South African pension schemes on HMRC’s list of qualifying recognised overseas pension schemes (QROPS).
To avoid tax penalties when transferring your pension overseas, the receiving jurisdiction must offer a scheme recognised by HMRC. Transferring a UK pension to an overseas plan that isn’t a QROPS is treated as an unauthorised payment, triggering a tax charge of at least 40%.
South Africa doesn’t currently have any QROPS, but HMRC’s list is updated twice a month, so this status may change in the future.
What Is the Alternative to Transferring a UK Pension to South Africa?
Since transferring a UK pension directly to South Africa is not feasible, you may consider an alternative, such as an international self-invested personal pension (SIPP).
International SIPPs are personal pension schemes based and regulated in the UK. They provide advantages that are particularly beneficial for UK expats living overseas, such as easier cross-border management, a broader range of investment opportunities, and greater withdrawal flexibility. They also allow UK residents and non-residents to consolidate multiple UK pensions into a single scheme for more optimised pension planning.
Your eligibility for transferring a pension to a SIPP depends on the type of pension you intend to transfer. UK expats can transfer the following pensions:
- Defined benefit (DB): Also known as a final salary pension, a DB pension is established by your employer and guarantees income in retirement. The amount you receive typically depends on your salary and the duration of your employment.
- Defined contribution (DC): This type of pension can be personal or workplace, and it allows contributions from you, your employer, or both. The funds are then invested in an array of assets, and the value of your pension will depend on the amount you contributed and the performance of your investments.
Expats enrolled in standard DB pensions must work with a pension transfer specialist if their pension’s cash equivalent transfer value (CETV) is over £30,000. Those who hold unfunded public sector DB schemes, such as the Teachers’ Pension Scheme or the NHS Pension Scheme, can’t transfer their pension to a SIPP.
If you’re moving a DC pension to an international SIPP, there are two transfer mechanisms you may utilise:
- Sell your assets, transfer funds to a SIPP, and reinvest within the scheme.
- Transfer your investments directly from a DC pension to a SIPP, which is only possible if both schemes support the same investment options.
Additionally, if your DC pension includes safeguarded benefits, such as a Guaranteed Annuity Rate (GAR), and the value of those benefits exceeds £30,000, you must consult a financial adviser before the transfer.
Pros and Cons of Transferring a UK Pension to an International SIPP
Transferring your UK pension to an international SIPP before moving to South Africa provides the following advantages:
| International SIPP Benefits | Explanation |
|---|---|
| More investment opportunities | International SIPPs allow you to invest in a wide selection of assets, including cash, bonds, trusts, and stocks in the UK or overseas. |
| Improved estate planning | DB schemes typically allow your beneficiaries to inherit up to 66% of your pension. Meanwhile, if you pass away before the age of 75, your heirs will inherit all of the remaining SIPP funds tax-free. Keep in mind that DC pensions will become a part of your taxable estate from April 2027. |
| Withdrawal flexibility | You can start withdrawing funds from a SIPP once you turn 55 (or 57 from April 2028) and choose from several withdrawal options. For instance, you can take up to 25% as a tax-free lump sum, leave the funds invested, or combine different withdrawal methods to meet your goals. You can also withdraw funds in multiple currencies, reducing currency exchange risks. |
| Tax Relief | You may be eligible for tax relief on your international SIPP contributions if you meet certain requirements. For instance, you must have relevant UK earnings or be a UK resident in at least one of the five tax years before moving to South Africa. The maximum amount of contributions for which you may receive tax relief is 100% of your relevant UK earnings, or £3,600 if you have no qualifying earnings. |
The primary drawbacks of international SIPPs are their fees, which include:
- Setup charges
- Administration fees
- Trading fees
- Exit fees
Although an international SIPP allows you to transfer any amount, you may contribute up to £60,000 gross per year before incurring income tax and potential tax penalties.
UK Pension Transfer to South Africa Service – Specialist Support for British Expats
Considering transferring your UK pension to South Africa? Work with trusted cross-border pension transfer specialists who understand both UK and South African tax and pension rules. We provide expert advice to help you make the most of your retirement savings.
Can UK Expats Benefit From South African Pensions?
UK expats can contribute to and benefit from South African retirement funds once they become tax residents in SA. The South African pension system includes several types of pensions:
| Factor | Explanation |
|---|---|
| Public pension | The South African Social Security Agency (SASSA) grant is similar to a state pension. It’s provided to the elderly with an income lower than R78,120 a year and assets worth R1,115,400 or less. |
| Occupational pensions | These retirement plans are available to those employed in the formal sector. For instance, SA residents employed in the public sector receive pension benefits from the Government Employees Pension Fund (GEPF). |
| Private pensions | SA offers various private pension funds that its residents can establish and leverage to increase their retirement savings. As of 1 September 2024, South Africa introduced the ‘Two-Pot Retirement System’. This reform splits retirement savings into two parts: a ‘savings component’, which allows limited early access for emergencies once per tax year, and a ‘retirement component’, which must be preserved until the member reaches age 55. Retirement annuities (RAs) are now governed by this two-pot structure, meaning expats contributing to RAs in South Africa should understand the new withdrawal restrictions and opportunities. |
For UK expats residing in SA, investing in a private pension, such as the retirement annuity (RA), is typically the most convenient retirement savings method. Contributions to RAs, whether made as lump sums or regular monthly contributions, qualify for tax deductions, while investment growth is tax-free.
You can contribute up to 27.5% of your annual taxable income, or R350,000 per year, to an RA, whichever is lower.
Lump sum withdrawals of up to one-third of the value of your RA are tax-free once you turn 55, but you must use the remaining funds to purchase a life annuity or invest in a living annuity.
Can I Transfer My South African Pension to the UK?
If you contribute to a retirement annuity while residing in SA and decide to return to the UK, you can transfer the accrued funds to the UK.
The South African Income Tax Act states that, from 1 March 2021, SA residents who stop contributing to an RA before reaching age 55 will receive the full value of the RA benefits as a lump sum, provided they were SA non-residents for a consecutive period of at least three years on or after 1 March 2021.
This rule applies if you were a South African tax resident and ceased residency for a continuous period of at least three years on or after 1 March 2021. Upon satisfying this condition, you may withdraw the full value of your RA before age 55, subject to approval from SARS. This rule is designed to prevent early access by individuals who intend to return to South Africa shortly after departing.
However, if you are older than 55 and have already withdrawn a portion of your RA and invested the rest in an annuity, the annuitised funds can’t be transferred to the UK. The capital will be locked in an SA annuity and subject to SA taxation upon withdrawal.
How Can You Improve Estate Planning While Living in South Africa?
You can enhance estate planning by enrolling in a qualifying non-UK pension scheme (QNUPS) while residing in South Africa. QNUPS is a tax-efficient pension scheme based outside of the UK, typically in one of the following jurisdictions:
- Malta
- Guernsey
- The Isle of Man
QNUPS are designed to allow for supplemental retirement savings when annual pension contribution limits in the UK—such as the £60,000 annual SIPP allowance—have been fully used. These schemes have no contribution limits and offer flexibility in investment and distribution planning.
However, from 6 April 2027, QNUPS will fall within the scope of UK Inheritance Tax (IHT) for UK-domiciled individuals unless the scheme meets new exemption criteria.
This legislative change may reduce the estate planning benefits previously associated with QNUPS. UK expats considering QNUPS should consult a cross-border tax adviser to evaluate whether this structure remains appropriate for their circumstances.
Tax Implications of Withdrawing a UK Pension While Living in South Africa
The UK and South Africa impose taxes on foreign and UK-based pensions according to their specific tax laws and your residency. Generally, South African non-residents are liable for tax on income sourced in SA, while its residents are taxed on worldwide income.
As of 23 July 2025, the foreign pension exemption under Section 10(1)(gC)(ii) of the South African Income Tax Act remains in force. However, the 2025 Budget Review (published on 12 March 2025) proposes repealing this exemption during the current legislative cycle—likely by the end of 2025.
If enacted, this change would make most UK pension income taxable in South Africa, even if it arises from foreign service. UK expats living in South Africa should speak to a qualified cross-border financial adviser to assess how this potential change could affect their retirement income and tax liabilities.
Additionally, pension funds accrued by South African residents and non-residents from a local retirement fund are subject to income tax.
SA non-residents can only receive pension benefits from a South African retirement fund (like the RA) if they used to be SA residents but have terminated their residency and obtained residency in another country, such as the UK.
Non-residents receiving annuity or lump sum income from a South African retirement fund must apply for a tax directive using SARS form RST01. This directive is valid for up to three years and helps avoid default withholding rates.
If you receive South African pension benefits and keep or regain your UK tax residency, you may be liable for tax in both jurisdictions because the UK taxes its tax residents on global income. However, the UK–South Africa double taxation agreement (DTA) grants the taxing right to your country of residence, which means that pension benefits received by South African residents from schemes like international SIPPs will only be taxable in SA.
Complimentary UK Pension Transfer Strategy Consultation
Transferring your UK pension to South Africa requires careful planning to navigate HMRC restrictions and South African tax law. Without the right structure, you may face unnecessary tax exposure or loss of pension benefits. In a complimentary consultation with Titan Wealth International, you will:
- Discover whether an international SIPP or alternative structure aligns with your residency and retirement objectives.
- Receive a comprehensive review of the UK–South Africa Double Taxation Agreement and the impact of proposed South African tax changes.
- Gain a personalised pension consolidation and withdrawal strategy, including estate planning considerations and currency risk mitigation.
Key Takeaway
Although it is not currently possible to transfer a UK pension directly to a South African pension scheme, UK expats can still manage their retirement planning effectively by considering alternative solutions such as international Self-Invested Personal Pensions (SIPPs). These structures offer greater investment flexibility, cross-border access, and estate planning advantages.
This article has outlined the options available to UK expats wishing to transfer a UK pension to South Africa, reviewed the tax treatment of pensions under South African law, and highlighted the potential role of QNUPS in broader retirement planning.
At Titan Wealth International, our pension transfer specialists offer regulated advice tailored to your residency status, financial objectives, and pension structure. We help expatriates evaluate whether SIPPs, QNUPS, or other pension strategies align with their long-term goals—while ensuring compliance with UK and South African tax law.
