Ten Years to Go: How to Build a Flexible Retirement Plan When You Live Abroad

The decade before retirement is the final opportunity to make meaningful adjustments before your salary stops, and your investments begin funding your lifestyle. For expats, retirement planning is more complex than for those living and working in a single country. It typically involves multiple pension arrangements across different jurisdictions, income in more than one currency, and tax systems that interact in ways a single-country plan rarely has to account for. The earlier these decisions are made, the more options remain available.

In this article, I will cover:

1. Key Takeaways

2. Why Is It Important to start by defining what you want your retirement to look like?

3. Where Will Your Retirement Income Actually Come From?

4. What Matters More Than Investment Returns in Retirement Planning?

5. Why Does Your Retirement Plan Need to Stay Flexible?

6. How Should Expats Approach Estate and Legacy Planning Before Retirement?

7. How Do You Stress-Test a Cross-Border Retirement Plan?

8. Why Shouldn't You Wait Until Your Final Working Year to Plan?

9. Frequently Asked Questions

Key Takeaways 

1. Living and working abroad means your pension savings are rarely in one place. People living outside the UK typically accumulate pension benefits across multiple pension systems, each with its own pension age, pension contribution rules, and tax on pension savings.

2. A UK pension scheme you left ten years ago may have been de-risked by the pension provider without your knowledge. The amount of pension savings you receive in retirement can look very different to what you expect if your pension plans in the UK have not been reviewed.

3. For expats weighing up a pension to an international SIPP or overseas pension scheme that meets HMRC's qualifying criteria, the overseas transfer allowance and overseas transfer charge can significantly affect how much of your pension value actually transfers.

4. Moving abroad to retire is not just a lifestyle decision. Your country of residence determines how pension income is taxed, whether your UK pension is paid into an overseas bank account gross or net, and whether you can align your pension drawdown with your actual spending currency.

5. Saving for retirement is one thing. Structuring pension savings so you do not pay tax on your pension savings twice, avoid an unauthorised payment from your plan, or trigger an unexpected tax charge is another. This is where professional advice on your pension arrangements becomes essential.

Why is it important to start by defining what you want your retirement to look like?

It is probably no surprise that the most common conversation I have with my clients is retirement planning for expats.

Most people know exactly when they want to retire, usually around a big birthday: 55, 60 or 65. The reason is often not based on the lifestyle they want or when they can actually afford to retire, but rather because it sounds right.

And so there are a few questions worth asking before any pension decisions are made:

• Where will you live in the world?
• Will you remain abroad or return home?
• Will you continue to work as a consultant or freelancing, or will you stop work entirely?
• Will you need to support children or ageing parents?
• What about moving abroad to retire at 58, or 63, rather than a fixed round number?

You might have moved several times during your career. You might have a favourite country. You might long to return home, or ageing parents might mean you feel obliged to. Your children may have settled in another country, and you might want to be close to them.

You might want to continue working but have more flexibility than the nine-to-five. I spoke to someone recently who wanted to set up a restaurant when he retired, a complete change from his engineering career. You might simply want to enjoy yourself and not have to worry about work again.

Understanding what you want your retirement to look like on a day-to-day basis helps clarify where your priorities are. When you understand how you want to live your life, we can start planning how your finances can deliver that, including which pension plan or combination of pension plans will support it.

Where Will Your Retirement Income Actually Come From?

Often, clients have worked in multiple countries during their career, with each country having different pension provisions and rules. It's not unusual to have bought rental properties in various countries or have company shares from past employers. The next step is to understand what you've built up, what you're entitled to and when.

State provision – what you receive from the UK State Pension often depends on what you have contributed, and for expats there are two things to check. First, the rules around filling National Insurance gaps tightened from April 2026, with the low-cost voluntary route abolished and the catch-up window narrowed. Second, around 453,000 British pensioners overseas did not benefit from this year's triple lock increase because their pension is frozen in countries without a reciprocal uprating agreement. Check your State Pension forecast before relying on it as part of your retirement plan.

Workplace pension schemes – your old or existing employer may have set up a pension for you, it could be one that guarantees you an income for life or could be one that you then have to manage yourself. There might be rules around when and how much income you can take too, and they may have changed since you worked there. Note also that the minimum age at which most people can access a private pension is due to rise from 55 to 57 in 2028, so if your plans rely on accessing benefits before then, it's worth checking whether you're affected. The first step is to understand what the current position is.

Investment portfolios – you may have set up a Regular Savings Plan 20 years ago with an adviser you no longer hear from, or you may invest via a trading platform yourself. It's sensible to understand where your money is and with whom, what you're invested in now and any tax implications. Portfolios to grow your investments can look different to portfolios that help give you income.

Company shares – it's common to be given shares whilst working for an employer, they accumulate over time; you might move companies, but the shares remain there, possibly paying dividends. Similar to investment portfolios, in the 10 years to retirement it's sensible to review what you have accumulated and whether they will work for you as part of your retirement plan.

Rental income – many of the people I speak to are landlords, some have specifically planned it that way, to deliver rental income in retirement, and some have become landlords accidentally by keeping their old properties when they move country. Whatever the reason, rental income can play an important part in delivering income in retirement, but things like mortgages and changing tax rules can have a big impact on the actual income received.

There will likely be a few sources to deliver the income you'll need in retirement, so it's important to understand each of them thoroughly, and consider how best to use them when you no longer have a salary coming in. Relying on only one or two sources often creates unnecessary risk.

What Matters More Than Investment Returns in Retirement Planning?

It's very tempting to focus solely on returns. However, there are a few things that do need to be looked at when planning your retirement, which often have a greater impact on your retirement success than chasing the extra 1-2% per year.

The main areas of focus are:

• Tax efficiency – now and when you come to need the money.

• Withdrawal strategies – how are you actually going to be able to take your money out?

• Inflation and longevity – According to the ONS National Life Tables 2021 to 2023, a 65-year-old man in the UK can expect to live a further 18.5 years on average, and a 65-year-old woman a further 21 years. If you retire at 55, your pension savings may need to last 30 years or more. Inflation over that period will have a significant impact on how far your money goes and, ultimately, your standard of living.

• Currency exposure – your income might be in one or two currencies, and the bulk of your expenditure might be in another, which poses some currency risk.

• Healthcare costs – as you get older, premiums for health insurance rise materially, and global medical cost inflation has been running well into double digits in recent years (WTW 2026 Global Medical Trends Survey) often outpacing general inflation by a wide margin.

One thing in life is certain: things change. Building flexibility into your retirement plan helps bridge the gap between where things are now and where they might be in ten, twenty or even thirty years' time.

Over the last forty years, UK pensions have undergone significant changes, some beneficial, some not. Many countries are also bringing in more punitive legislation on landlords, taxing rental income more heavily, restricting rent increases, or making it difficult and expensive to sell property. Having multiple sources of pension income and investment income reduces the impact of these changes on your overall retirement plan.

This is also why the structure of pension savings matters. Pension savings held across a mix of pension plan types, including personal pension, workplace pension, and where appropriate a qualifying recognised overseas pension scheme, can offer more flexibility than a single concentrated pension pot when circumstances change.

How Should Expats Approach Estate and Legacy Planning Before Retirement?

For many high net worth expatriates, retirement planning is about more than ensuring enough income to enjoy their lifestyle. It is also about deciding how their wealth will support the people and causes that matter most to them.

The decade before retirement is an ideal time to review estate and legacy planning. By this stage, many people have accumulated significant pension funds and assets across multiple countries. Without careful planning, these may be subject to different tax regimes and succession laws, potentially reducing the value ultimately passed on to beneficiaries.

This is particularly relevant for UK pensions. From April 2027, most unused pension funds and pension death benefits will be brought within the scope of UK Inheritance Tax for the first time, following legislation passed earlier this year. This is a significant change for anyone who has historically viewed their pension as a tax-efficient way to pass on wealth. Reviewing how this affects your wider estate plan well ahead of the change is now pressing for many expat pension holders.  

‍Read more: UK pension IHT changes from April 2027.

This is also an opportunity to consider whether you would like to make lifetime gifts to children or grandchildren, support education costs, assist with property purchases, or establish a broader family wealth strategy. For many clients, seeing the positive impact of their wealth during their lifetime can be just as rewarding as leaving an inheritance.

Finally, expats should remember that estate planning is rarely governed by the rules of just one country. Your nationality, country of residence, the location of your pension savings and other assets, and where your beneficiaries live can all influence how your estate is treated. A coordinated, cross-border approach can help avoid unintended consequences and ensure your retirement and legacy plans work together.

‍Read more: Estate planning checklist for expats.

How Do You Stress-Test a Cross-Border Retirement Plan?

As an expat, you are likely to hold pension savings and other assets across multiple countries and currencies, all of which bring an element of risk to your retirement plan.

The real question is not simply "Can I retire?" but:

• What if inflation increases?

• What if markets fall just before retirement?

• What if I live to 95?

• What if I move country after I retire?

• What if tax rules change, including pension tax rules?

• What if my pension income is frozen in a country without an uprating agreement?

This is where lifetime cashflow modelling helps answer these questions with greater confidence than assumptions alone. A well-structured cashflow model maps your pension income, investment income, expenditure, and pension arrangements year by year, and tests your retirement plan against the scenarios that actually keep internationally mobile families awake at night.  

Read more: Cashflow modelling for expat retirement planning.

‍Why Shouldn't You Wait Until Your Final Working Year to Plan?

This is one of the most common patterns I see. Retirement becomes imminent, and it comes to the front of your mind. However, some financial planning opportunities for expats require years rather than months.

Reviewing the structure of a pension plan, considering an overseas pension transfer, making voluntary National Insurance contributions, topping up a pension pot, or restructuring how assets are held all take time. Some of these pension decisions also have regulatory deadlines that pass without notice if you are not watching for them.

The earlier these conversations begin, the more options remain available, and the more flexibility exists to adapt as legislation, pension rules, and your own circumstances evolve. For people living overseas who are ten years from their target retirement date, now is exactly the right time to start.

Frequently Asked Questions

1. Should I transfer my UK pension abroad before I retire?  
Transferring a UK pension to an overseas pension scheme, such as a Qualifying Recognised Overseas Pension Scheme (QROPS), can make sense for expats who plan to retire permanently outside the UK and want their pension income aligned with their country of residence. However, overseas pension transfers come with an overseas transfer charge in some circumstances, and the rules around what constitutes a qualifying recognised overseas pension scheme are complex. A pension transfer is an irreversible decision for most pension types and requires careful analysis of the tax treatment, pension income flexibility, and your long-term retirement plans before acting.
Read more: How a financial adviser can help with UK pension transfers.

2. Can I still access my UK State Pension if I live abroad?
Yes. UK State Pension entitlement is based on your National Insurance record, not your country of residence. However, whether your pension income increases each year depends on where you retire. In countries without a reciprocal uprating agreement with the UK, including Malaysia, the State Pension is frozen at the rate first paid. For expats with gaps in their National Insurance record, the rules for making voluntary contributions have tightened significantly since April 2026. Check your position with a current State Pension forecast before relying on it as part of your retirement plan.  
Read more: UK State Pension guide for expats 2026.

3. What is the minimum pension age, and does it affect expats?  
The minimum pension age at which most people can access a UK private pension is currently 55, rising to 57 in 2028. This applies to UK pension plans including personal pension, SIPP, and most workplace pension schemes, regardless of where you live. If your retirement plan involves accessing pension savings before 57, it is worth confirming with your pension provider whether you are affected by the change, and whether any protected pension age applies to your specific pension scheme.

4. How will the UK's pension inheritance tax changes from April 2027 affect my estate plan?
From April 2027, most unused pension funds and pension death benefits will fall within the scope of UK Inheritance Tax for the first time. If you have viewed your pension pot as a tax-efficient way to pass wealth to the next generation, this changes the calculation. For expats, the position also depends on whether you are treated as a long-term UK resident and the jurisdiction of your pension scheme. Reviewing how this interacts with your wider estate plan before April 2027 is now a priority.  
Read more: UK pension inheritance tax changes.

5. Is a self-invested personal pension (SIPP) suitable for expats?
A SIPP offers more flexibility over investment choices and drawdown options than most standard workplace pension schemes, which can be useful for expats managing a pension plan across borders. For those with multiple deferred UK pension pots, consolidating into a SIPP can provide cleaner oversight. For expats considering a pension to an international SIPP specifically designed for non-UK residents, the structure can accommodate multiple currencies and jurisdictions more cleanly than a standard UK pension scheme. However, the right pension type depends on individual circumstances, and the decision should be reviewed alongside your wider retirement plan and country of residence.

Disclaimer

This content is for general information purposes only and does not constitute financial, tax, legal or immigration advice. Melbourne Capital Group does not provide tax advice. You should consult a qualified tax adviser regarding your specific tax position. This article does not take into account your personal circumstances, and no action should be taken without seeking advice tailored to your individual situation. References to legislation, tax rates and thresholds, including UK National Insurance, pension and Inheritance Tax rules, reflect our understanding as at the date of publication, may change, and can vary depending on your nationality, country of residence and where your assets are held.

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