From the pristine beaches of Mauritius to the vineyards of South Africa and the wildlife-rich savannas of Kenya, Africa offers some of the world’s most desirable destinations for retirement and expatriate living. With its growing expat communities, improving infrastructure, and favourable tax environments in key jurisdictions, the continent is attracting increasing numbers of retirees and professionals from the UK, US, and Europe.
However, relocating to Africa also means navigating a complex financial landscape. One of the most important — yet often overlooked — parts of that transition is managing your pension. Understanding how to efficiently structure, access, and protect your retirement savings can have a profound impact on your long-term financial security.
Why More Expats Are Choosing Africa
Several African nations now offer a lifestyle and investment climate that rival traditional expat hubs in Europe and Asia.
- South Africa continues to attract retirees for its Mediterranean climate, high standard of living, and English-speaking culture.
- Mauritius has emerged as a global financial hub, offering permanent residence options for investors and retirees, alongside political stability and attractive tax rates.
- Namibia, Botswana, and Morocco are gaining popularity among adventurous retirees seeking a lower cost of living and natural beauty.
While the continent is vast and diverse, one common thread runs through the experience of many expats — the need to adapt their retirement and pension strategies to suit life outside their home country.
Understanding Your Pension Options Abroad
When relocating to Africa, it’s essential to review how your pension will be treated — both in the country where it’s held (e.g. the UK) and in your new country of residence.
1️⃣ Keeping Your Pension in the UK
Many expats choose to leave their pension in the UK, particularly if they have a defined benefit (final salary) scheme or wish to retain UK regulatory protection.
This option provides stability, but it can also expose retirees to currency fluctuations and exchange-rate losses if they withdraw income in sterling but spend in local currency.
Additionally, pension income may still be subject to UK taxation, depending on your residency status and the existence of a Double Taxation Agreement (DTA) between the UK and your new country.
2️⃣ Transferring to a QROPS
For many expats, a Qualifying Recognised Overseas Pension Scheme (QROPS) offers greater flexibility and tax efficiency.
A QROPS is an HMRC-recognised overseas pension scheme that allows you to transfer your UK pension abroad while retaining key protections and benefits.
Potential advantages include:
- Access to a wider range of investment options.
- Multi-currency flexibility, allowing you to hold and draw income in the same currency as your living expenses.
- The ability to avoid future UK Lifetime Allowance restrictions.
- Simplified estate planning, as QROPS can often be passed on to beneficiaries with greater efficiency.
QROPS are particularly beneficial for long-term expats or retirees permanently based outside the UK, although suitability depends on factors such as the type of pension held, the total value, and your residency status.
Popular jurisdictions for QROPS transfers include Malta, Gibraltar, and Guernsey, each offering strong regulatory oversight and favourable tax treatment.
3️⃣ Considering International SIPPs
An International SIPP (Self-Invested Personal Pension) is another option that allows expats to retain a UK-regulated pension while investing and drawing income abroad.
For some expatriates — particularly those unsure if they’ll stay abroad permanently — an International SIPP provides an ideal balance between flexibility and familiarity.
Taxation and Double Taxation Agreements (DTAs)
Tax treatment is one of the most critical factors when managing your pension overseas.
The UK has Double Taxation Agreements with several African countries, including South Africa, Mauritius, Botswana, Egypt, and Zambia. These treaties ensure that you won’t pay tax twice on the same income.
- In many cases, pension income is only taxable in your country of residence, not in the UK.
- However, UK government service pensions (e.g., civil service, military, NHS) remain taxable in the UK but are usually exempt in your country of residence.
Each DTA operates differently, so professional advice is vital to avoid unexpected liabilities.
For countries without a DTA, expats may be at risk of double taxation, making proper planning even more important.
Managing Currency and Exchange-Rate Risk
One of the most common — and underestimated — financial challenges for expats in Africa is currency volatility.
Drawing income from a UK pension in sterling while spending in South African rand (ZAR), Mauritian rupee (MUR), or Kenyan shilling (KES) can lead to significant fluctuations in the actual value of your retirement income.
Mitigation strategies include:
- Holding investments in multi-currency accounts.
- Structuring your pension or QROPS in the currency of expenditure.
- Using currency hedging or foreign exchange services to secure better transfer rates.
A well-diversified portfolio and regular reviews with your financial adviser can help reduce exposure to these risks and ensure long-term stability.
Estate Planning and Inheritance Tax
Cross-border estate planning is another vital aspect of managing your pension in Africa.
Even after relocation, many expats retain a UK domicile, meaning their estate could still be subject to UK Inheritance Tax (IHT) at 40%.
Some countries, such as South Africa, also levy estate duty, which can apply to worldwide assets for residents.
Without proper structuring, this could expose your heirs to double taxation on your estate.
Working with an adviser experienced in international estate planning ensures that your assets are protected and passed on efficiently, in line with both UK and local laws.
Why Professional Advice Matters
Managing pensions across borders is complex. Between UK regulation, African tax regimes, and currency volatility, small mistakes can have long-term consequences.
A qualified cross-border financial adviser can help you:
- Assess whether a QROPS, International SIPP, or retaining a UK pension is most suitable.
- Navigate DTAs and local tax obligations.
- Structure your retirement income for maximum tax efficiency.
- Build a portfolio that balances growth, stability, and income.
- Plan your estate and ensure wealth passes smoothly to your beneficiaries.
At Blacktower Financial Management, we’ve been helping expatriates manage their wealth across jurisdictions since 1986.
With offices in Europe, the Caribbean, and the US, and a network of professional partners across Africa, we provide bespoke, compliant advice to help expats protect and grow their assets — wherever they live.
Final Thoughts
Africa offers exceptional opportunities for expatriates — a high quality of life, natural beauty, and a lower cost of living compared to many Western countries.
But to enjoy those benefits fully, it’s crucial to ensure your pension and investments are structured correctly.
Whether you’re retiring to Cape Town, relocating to Mauritius, or dividing your time between London and Nairobi, careful financial planning can help you preserve wealth, reduce tax exposure, and create lasting financial security.
Speak to an International Pension Specialist
If you’re living or planning to retire in Africa, it’s never too early to review your pension arrangements.
At Blacktower Financial Management, our advisers specialise in helping expatriates make the most of their retirement savings through clear, compliant, and personalised financial advice.