For many British expatriates, supporting a spouse or partner in later life is a key financial consideration. This often raises a practical question: can your pension be transferred to your husband or wife, either during your lifetime or on death?
In most situations, UK pensions cannot be directly transferred to another person during life. However, a spouse may still benefit from pension wealth through:
- Personal contributions paid on their behalf
- Inheritance of pension benefits
- Court-ordered division of assets during divorce
This article explains how these options work, the relevant tax considerations, and the different rules that apply to State and private pensions.
Can You Transfer a Pension to Your Spouse During Your Lifetime?
Generally, you cannot transfer your pension pot to another person, including a spouse, while you are alive. UK pension rules treat pension savings as personal entitlements, except where courts order a division due to divorce or dissolution of a civil partnership.
However, a spouse may benefit from retirement income through other methods, most commonly by making pension contributions on their behalf.
Contributing to a Spouse’s Pension
You can pay into a spouse’s personal pension (for example, a SIPP or stakeholder pension), which may help boost their retirement income. Contributions count towards the spouse’s annual pension allowance and may qualify for tax relief where HMRC rules are met.
Key points to understand:
- You cannot contribute directly to their workplace pension in most cases.
- If your spouse has no UK earnings, they can typically receive tax relief on contributions up to £3,600 gross per year (£2,880 paid in, topped up by £720 from the provider).
- If they have UK earnings, contributions can be higher and may receive additional tax relief depending on their tax bracket.
Eligibility for tax relief requires the spouse to meet HMRC criteria, which typically include UK residency or recent past UK residency within the previous five tax years. Expats should seek professional guidance before making significant third-party contributions, particularly when neither spouse is UK-resident for tax purposes.
Can You Transfer a UK State Pension to a Spouse?
A UK State Pension cannot be transferred during life. However, a surviving spouse or civil partner may inherit certain elements upon death, depending on:
- The type of State Pension (old or new system)
- When each partner reached pension age
- NI (National Insurance) contribution history
- Whether they remarry before reaching State Pension age
Old State Pension System (Before April 2016)
Under the pre-2016 system, a spouse may be able to:
- Inherit part of the basic State Pension
- Benefit from the deceased partner’s Additional State Pension (SERPS or State Second Pension)
- Use the deceased’s NI contributions to increase their own entitlement
New State Pension System (From April 2016)
Inheritance is more restricted, but a spouse may be able to inherit part of a protected payment if:
- The marriage or civil partnership existed before 6 April 2016
- The surviving spouse has not remarried before reaching State Pension age
Deferred State Pension
If the deceased deferred their State Pension, additional benefits may pass to the spouse. These can be received as:
| Deferral Period | Benefit Type |
| 1 year or more | Weekly payments or a lump sum |
| 5 weeks–1 year | Weekly increase |
| Less than 5 weeks | Added to the deceased’s estate |
Rules vary depending on NI history, marital status, and residency, so advice is beneficial when calculating potential entitlement.
Does a Private Pension Transfer to a Spouse on Death?
The treatment of private pensions differs based on the type of pension.
Defined Contribution (DC) Pensions
These include personal pensions and SIPPs. On death:
- If you die before age 75 and benefits are designated within two years, withdrawals for beneficiaries are generally free from UK income tax.
- If you die at or after age 75, beneficiaries pay income tax at their marginal rate on withdrawals.
Your spouse may receive the fund as:
- A lump sum
- A continuing drawdown pension
- An annuity purchased in their name
Defined Benefit (DB) Pensions
Also known as final salary pensions. They typically pay:
- A survivor’s income (often between 50% and 66% of the member’s pension)
- Limited or no lump-sum death benefits
If no eligible beneficiary is named, payments will usually stop on death.
Inheritance Tax on Pension Death Benefits
Traditionally, most pensions have been outside the scope of Inheritance Tax (IHT). However, new rules due from April 2027 mean many unused pension benefits and death payments will fall within IHT, at the prevailing rate above available allowances.
This may apply to:
- Defined benefit lump sums
- Flexi-access drawdown benefits
- Pension protection lump sums
- Annuity protection payments
- Dependant and successor pensions
Some death-in-service benefits may still be exempt. Executors are likely to be responsible for reporting and settling any IHT due. Cross-border IHT planning and considerations around domicile add further complexity, particularly for long-term expats.
Can a Spouse Receive Pension Benefits After Divorce?
During divorce, pensions are classed as matrimonial assets and can be divided, even if one spouse is a non-resident. Common methods include:
1. Pension Sharing
- A court order splits one partner’s pension into a separate entitlement for the other spouse.
- A new pension pot is created in the spouse’s own name.
2. Pension Offsetting
- One spouse keeps their pension, while the other receives other assets of comparable value (e.g., equity in a home).
3. Pension Attachment (Earmarking)
- Part of the pension is paid to the former spouse when the member retires.
- Payments depend on when and how the member chooses to draw benefits.
The basic State Pension cannot be shared, although rights linked to Additional State Pension built up before April 2016 may be shared.
International divorces involving UK pensions often require coordination between local courts and UK schemes, so specialist advice is important.
Key Takeaway
A UK pension cannot be directly transferred to a spouse during lifetime, but a partner can still benefit through:
- Pension contributions made on their behalf
- Inheritance of private or State Pension benefits
- Court-ordered division during divorce
Tax treatment varies depending on age at death, residency, pension type, and potential IHT changes from 2027. For expats, cross-border residency and domicile rules can significantly affect outcomes, so individuals may wish to seek personalised planning.
Speak to a Blacktower Adviser
Blacktower Financial Management has supported UK expats for nearly four decades across many countries. Our advisers can discuss:
- Pension contributions for spouses
- Cross-border pension inheritance
- IHT implications for expats
- Divorce and pension division involving overseas residency
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
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