Can Expats Transfer a UK Pension to Switzerland? Rules and Options Explained

Meanwhile, transferring your pension to an approved Swiss scheme may provide more flexibility in terms of contributions, investments, and withdrawal options.

Certain QROPS or international SIPP arrangements may offer withdrawals in Swiss francs or multi-currency options, which can help manage – but cannot fully eliminate – currency conversion risks, potentially supporting your pension’s long-term value.

This article will explain whether it’s possible to transfer a UK pension to Switzerland and provide an overview of viable transfer options. It will highlight their benefits and drawbacks and explore their taxation treatment.

How Is the Swiss Pension System Structured?

The Swiss pension system consists of three pillars:

Which UK Pensions Can You Transfer to Switzerland?

You can generally transfer two types of UK-registered pensions to Switzerland:

1. Defined benefit (DB) pensions: Traditional workplace pensions that provide a guaranteed income in retirement. They are calculated based on your salary and duration of employment.
2. Defined contribution (DC) pensions: Personal and workplace pensions funded with individual and employer contributions. The accumulated funds are invested in various assets, and your eventual pension income is determined by the amount of contributions and the performance of your investments.

Transferring a regular DB pension to Switzerland requires obtaining the cash equivalent transfer value (CETV)—the pension amount your provider offers for transferring funds out of the scheme. If your CETV is £30,000 or more, FCA rules require you to obtain advice from a regulated pension transfer specialist before proceeding.

For DC pension transfers, professional financial advice is only mandatory if your scheme contains special guarantees valued at £30,000 or more, such as a Guaranteed Annuity Rate (GAR).

Can You Transfer a UK State Pension to Switzerland?

Although it’s not possible to transfer a UK State Pension to an overseas scheme, you can still receive payments if you retire in Switzerland. Under the UK–Switzerland social security agreement, your UK State Pension, when paid to Switzerland, continues to receive annual cost-of-living increases (uprating).

To claim your State Pension from Switzerland, you must be within four months of reaching your State Pension age, which is currently 66. You can either contact the International Pension Centre directly or submit an international claim form to the centre.

Your UK State Pension can be paid into a Swiss bank account and received in Swiss francs. However, this option may expose the distributions to currency exchange fluctuations.

Which Swiss Schemes Allow UK Pension Transfers?

Upon relocating to Switzerland, you may enrol in a private pension plan or accrue occupational pension benefits if employed in the country. However, you may not be able to transfer your existing UK pension funds directly to such schemes. Your transfer eligibility will depend on two primary factors:

1. Whether the receiving scheme is recognised by His Majesty’s Revenue and Customs (HMRC), the UK’s chief taxation authority
2. Whether your UK pension provider allows overseas pension transfers

To avoid incurring substantial tax charges, you may only transfer a UK pension to HMRC-approved overseas schemes, known as qualifying recognised overseas pension schemes (QROPS). These arrangements must comply with HMRC’s strict rules and requirements and be listed on HMRC’s official QROPS list at the time of the transfer.

Transferring your UK pension to a Swiss scheme that is not considered a QROPS could result in HMRC classifying the transfer as an unauthorised payment, which may attract a tax penalty of up to 55% of the transferred amount.

Always check the current HMRC list before proceeding, as recognised schemes can change. At the time of writing there are currently two Swiss pension schemes on HMRC’s QROPS list:

1. Independent Vested Benefits Foundation: This vested benefits account retains pension assets until a trustee reaches the normal retirement age of 55 (rising to 57 in 2028).
2. CERN Pension Fund: This occupational pension scheme is designed for employees of the European Organisation for Nuclear Research, known as CERN.

Benefits and Drawbacks of QROPS

Transferring a UK pension to a QROPS in Switzerland may provide the following key benefits, subject to HMRC rules and scheme conditions:

The primary drawbacks of a pension transfer to a QROPS are the strict rules you must follow to avoid substantial tax charges. For example, you may face the 25% overseas transfer charge (OTC) in the following circumstances:

• The value of your transferred pension benefits exceeds the overseas transfer allowance of £1,073,100, in which case the excess is subject to the OTC;
• You are not a tax resident in the country where the QROPS is established at the time of the transfer; or
• You transfer to a QROPS in your country of residence but then move to another country within five years of the transfer.

In addition, QROPS benefits cannot normally be accessed before age 55 (rising to 57 in 2028). Early or unauthorised withdrawals may attract significant UK tax penalties.

UK tax charges may also apply if you access pension funds before you have been non-UK resident for at least ten consecutive years, or if you make a withdrawal within five years of transfer.

What Is the Alternative to Transferring a UK Pension to a Swiss QROPS?

As an alternative to transferring your UK pension to an overseas scheme, you may consider moving it to an international self-invested personal pension (SIPP). This UK-based personal pension arrangement provides access to global investment opportunities while preserving eligibility for UK tax relief and allowances.

There are no limits on the pension benefits you can transfer to an international SIPP as transfers aren’t considered contributions.

After transferring to an international SIPP, you may be able to continue contributions, but eligibility for tax relief and employer contributions depends on scheme rules and whether you have relevant UK earnings. Contributions are then invested across a wide range of assets, which can provide diversification and potential for long-term growth.

International SIPPs are regulated by the UK’s Financial Conduct Authority (FCA), which ensures a high level of oversight and improved protection of retirement savings.

Advantages and Disadvantages of International SIPPs

Transferring your UK pension to an international SIPP provides the following advantages:

Before transferring your pension, consider the fees associated with establishing and managing an international SIPP as they may be higher than the costs of your current scheme.

Additionally, to avoid potential tax charges, ensure the contributions you make after the pension transfer don’t exceed the annual tax-free contribution limit of £60,000.

Is QNUPS a Viable Transfer Option for UK Expats in Switzerland?

Qualifying non-UK pension schemes (QNUPS) are offshore pension arrangements typically established in low-tax jurisdictions such as Malta and the Isle of Man.

QNUPS are not classed as QROPS. Direct pension transfers from UK-registered schemes into a QNUPS are treated as unauthorised payments by HMRC and may attract tax charges of up to 55%.

While not a viable transfer option, they can sometimes be used as a complementary retirement savings vehicle. However, they do not benefit from UK tax reliefs and allowances.

Possible features of QNUPS for UK expats in Switzerland include:

• No statutory UK contribution limits, allowing potentially larger savings than in UK-registered schemes.
• Earlier access in some jurisdictions (from age 50 or 55), subject to local law and scheme rules.
• The ability to take a tax-free lump sum (e.g. 25–30%) depending on the jurisdiction’s pension rules.
• A broad range of permitted global investments, including listed securities, funds, and in some cases residential property.
• Growth within the structure is generally outside UK Capital Gains Tax (CGT), though local tax rules may apply.
• Under current rules, many QNUPS have been treated as outside the UK Inheritance Tax (IHT) net, but from 6 April 2027 unused pension funds and pension death benefits will generally be included in the deceased’s estate for UK IHT purposes unless exempt (e.g. spouse, civil partner, or charity beneficiaries).

QNUPS often carry higher set-up and administrative charges than UK-based schemes, and their tax treatment depends on both UK legislation and the jurisdiction in which the QNUPS is established. Professional advice is essential before considering them.

What Is the Tax Treatment of Pensions for UK Expats in Switzerland?

Switzerland imposes taxes on the worldwide income of its tax residents. Accordingly, once you gain Swiss residency, your pension income will generally be subject to Swiss income tax.

Since the Swiss income tax is levied at the federal, cantonal, and municipal levels, your personal tax rate will vary depending on your canton of residence. Combined rates can be significant and typically fall within a broad range, depending on location.

If you withdraw your pension as a lump sum, it will be subject to Swiss capital withdrawal tax rather than standard income tax. Rates are set by canton and municipality and can vary widely, commonly around 5% to over 20%. These are usually lower than full income tax rates but differ considerably across Switzerland.

To ensure you fully understand how your canton of residence and withdrawal method impact the taxation of your pension income, consider consulting professional expat tax advisers, as both Swiss and UK tax rules may apply depending on your circumstances.

How Does the UK-Switzerland Double Tax Agreement Work?

If you are a tax resident in Switzerland and transfer your pension to an international SIPP, which is a UK-registered scheme, both the UK and Switzerland may tax your pension withdrawals based on their individual tax laws. In this case, a double taxation agreement (DTA) between the UK and Switzerland may protect you from double taxation on the same pension income. Its provisions state the following:

• Private pension payments to a Swiss tax resident are only taxable in Switzerland.
• Lump sum payments from a pension scheme established in the UK and received by a Swiss resident are in principle taxable only in the UK. However, Swiss cantonal tax rules may still apply to lump-sum withdrawals, meaning the overall tax treatment can vary and should be confirmed with a qualified cross-border tax adviser.
• UK unfunded public sector pension entitlements received by a Swiss tax resident may be taxed only in the UK, unless the recipient is both a Swiss tax resident and a national, in which case they will be taxed in Switzerland.