For many British expatriates, pensions represent one of the largest parts of their wealth. Yet thousands of expats unknowingly leave retirement savings scattered across multiple schemes — some forgotten, some underperforming, others eroded by unnecessary fees.
Since the UK’s auto-enrolment rules were introduced in 2012, millions of workers have been automatically enrolled in workplace pensions. While this helped increase long-term saving, it also created a generation of workers with multiple small pension pots, often left behind as careers and countries change.
If you’ve since moved overseas, those pensions don’t simply disappear — but without careful attention, they could become disconnected from your wider retirement strategy.
The Long-Term Impact of Unattended Pensions
Every job change in the UK may have left you with another pension pot. For expats, this creates a unique challenge:
- Multiple pensions across different providers
- No clear oversight of investment performance or charges
- Difficulty receiving updates when correspondence is sent to an old UK address
While some of these pensions may be quietly compounding, others could be underperforming, sitting in outdated funds, or charging high fees. Left unchecked, this could result in significant opportunity cost.
Could You Be Missing Out?
Ask yourself a few simple questions:
- Do you know where all of your UK pensions are held?
- Are you aware of the fees you’re paying — and are they competitive?
- Did you choose your investment funds, or did you simply accept the defaults?
- Have you reviewed the performance of those funds in recent years?
- Do any of your pensions include legacy benefits that might be valuable?
If you hesitated to answer, you’re not alone. Many expats have not reviewed their pensions in years, sometimes decades. That doesn’t make them irrelevant — in fact, it makes them more urgent.
Why This Matters Even More When You Live Abroad
Expats face additional complexity. Pension reviews aren’t just about performance — they’re also about regulation, tax, and currency.
- Lost contact: If your pension provider still has your old UK address, you may have stopped receiving statements and updates.
- Changing rules: UK and overseas tax regimes continue to evolve. A major shift is coming in April 2027, when UK pensions will form part of your estate for inheritance tax (IHT) purposes. Many expats who assumed pensions passed tax-free may now need to rethink their estate planning.
- Currency risk: Most UK pensions are denominated in sterling. If your retirement spending will be in euros, dollars, or dirhams, exchange rate fluctuations could significantly affect your income. A strong pound could benefit you, but a weak pound could reduce your purchasing power at precisely the wrong time.
These are not abstract issues — they are very real financial risks expats face every day.
Hidden Gems Lurking in Old Pensions
While many older schemes are outdated, some still carry benefits that are no longer available in modern plans. Examples include:
- Guaranteed Annuity Rates (GARs): Some pensions offer annuity rates far above what’s available in today’s market.
- Enhanced Tax-Free Cash: Certain legacy schemes allow more than the standard 25% tax-free withdrawal.
- Pension Term Assurance: Life cover with tax relief built in — now rare but valuable.
- Guaranteed Minimum Pensions (GMPs): Available to those who were contracted out of SERPS, offering a valuable minimum level of retirement income.
Handled correctly, these features can add substantial value. But they need professional assessment — what’s an asset for one person may be irrelevant for another.
But Beware the Traps
Not all old pensions are treasures. Many are riddled with drawbacks:
- Lifestyle switching: Some schemes automatically de-risk your portfolio as you approach a set retirement age, without asking you. That may suit someone buying an annuity, but not someone planning flexible drawdown.
- Lack of flexibility: Older pensions may not support modern options such as phased withdrawals or passing wealth efficiently to beneficiaries.
- Limited funds: Many older schemes only offer a small range of outdated funds, missing opportunities in global markets.
Left unchecked, these traps can significantly limit your retirement choices.
Review. Rethink. Realign.
The smart approach is to take control through a clear process:
- Review — Locate all of your pensions, analyse performance, fees, and any legacy benefits.
- Rethink — Consider whether consolidation, switching funds, or using international pension options better fits your current life abroad.
- Realign — Ensure your pensions work with your wider financial plan, including tax rules in your country of residence, inheritance planning, and retirement income goals.
Real Life: What We See in Practice
At Blacktower, we regularly meet expats who had no idea how much was locked away in old pensions. One client had six separate pots spread across different providers, none of which had been reviewed in over 15 years. After analysing costs, benefits, and currency exposure, we helped consolidate the appropriate schemes and preserve valuable features. The end result: a simpler structure, improved performance oversight, and a clearer retirement strategy.
This is the difference between pensions running on autopilot and pensions actively working for you.
Next Steps: Take Back Control
If you haven’t reviewed your pensions since leaving the UK, now is the time. Here are the steps you may consider:
- Reconnect with lost providers and gather up-to-date statements.
- Consolidate where appropriate to reduce costs and improve oversight.
- Assess legacy benefits — don’t give up guarantees without professional guidance.
- Check tax implications, especially ahead of the 2027 IHT changes.
- Align pensions with your currency needs, especially if you plan to retire outside the UK.
At Blacktower, we specialise in helping expatriates bring clarity to their pensions, identifying hidden value, avoiding costly traps, and aligning retirement savings with life abroad.
Final Thoughts
Your pensions could represent the backbone of your retirement — but only if they are reviewed and managed with care. Leaving them scattered, forgotten, or underperforming may not support your long term goals without review.
By reviewing, rethinking, and realigning, you can ensure your pensions are working as hard as you are to secure the lifestyle you want, wherever you live.
Speak with Blacktower’s cross-border financial advisers today to review your pensions. We’ll help you uncover hidden opportunities, avoid unnecessary costs, and align your retirement savings with your global lifestyle.
Disclaimer
This article is for informational purposes only and does not constitute investment, tax, or legal advice. The value of investments can go down as well as up, and you may not get back the amount originally invested. Past performance is not a reliable indicator of future results. Tax treatment depends on individual circumstances and may be subject to change. Always seek regulated financial advice before making any financial planning or investment decisions
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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