For many British expatriates who have moved to the United States, one of the most important financial considerations is what to do with their UK pensions. Whether you’ve relocated for work, lifestyle, or retirement, your UK pension remains a significant asset — one that requires careful management to ensure it continues to grow and support you in the years ahead.
A Self-Invested Personal Pension (SIPP) offers a practical, flexible, and UK-regulated way to manage your retirement savings while living in America. For expats who plan to remain abroad but maintain ties to the UK, SIPPs can provide control, transparency, and long-term tax efficiency, helping you protect your wealth across borders.
What Is a SIPP?
A Self-Invested Personal Pension (SIPP) is a UK-registered pension that allows individuals to take an active role in managing their retirement funds. Unlike traditional personal pensions — which limit your choices to a small range of provider-selected funds — a SIPP gives you full control over your investment strategy.
Within a SIPP, you can invest in a wide range of assets, including:
- Individual UK and global shares
- Exchange-traded funds (ETFs) and bonds
- Managed funds and unit trusts
- Commercial property and cash holdings
Regulated by the UK Financial Conduct Authority (FCA), SIPPs remain one of the most transparent and secure pension structures for UK citizens living overseas.
Why SIPPs Are Popular with UK Expats in the US
The United States is home to one of the world’s largest British expat communities. However, the U.S. tax system — and its interaction with UK pensions — can be complex. While transferring your UK pension to a QROPS (Qualifying Recognised Overseas Pension Scheme) may not be possible for U.S. residents due to the absence of approved schemes, a SIPP offers an ideal alternative.
By keeping your pension within the UK, you can continue to grow your savings under a familiar and compliant framework, while coordinating your withdrawals and reporting for both HMRC and the IRS.
The Benefits of Holding a SIPP from the US
1️⃣ Retain Your Pension in a UK-Regulated Environment
Keeping your pension in the UK ensures that your funds remain protected by UK pension regulations and FCA oversight, providing confidence and peace of mind.
2️⃣ Investment Control and Flexibility
SIPPs allow you to choose how and where your money is invested — providing access to global markets, diversified assets, and tailored investment strategies that align with your long-term financial objectives.
3️⃣ Consolidate Multiple Pensions
Many expats accumulate several pensions throughout their UK careers. A SIPP enables you to consolidate them into one plan, simplifying management, reducing costs, and improving visibility of your overall retirement position.
4️⃣ Currency and Income Flexibility
SIPPs can hold investments and cash in multiple currencies, making them particularly useful for expatriates earning or living in the U.S. dollar. This helps you manage currency risk and control how and when you convert funds between GBP and USD.
5️⃣ Estate Planning and Inheritance Benefits
Funds within a SIPP can be passed to beneficiaries upon death — often free of UK Inheritance Tax (IHT) if death occurs before age 75. This makes a SIPP a valuable part of a broader wealth and succession strategy for globally mobile families.
Understanding Taxation: UK SIPPs and the U.S.
As a U.S. resident, you’re subject to taxation on your worldwide income — including pension withdrawals. However, the UK–U.S. Double Taxation Treaty ensures that you won’t be taxed twice on the same income.
Under the treaty:
- Most UK pensions, including SIPPs, are taxable only in the U.S., not in the UK.
- Pension income is declared to the IRS, not HMRC.
- The UK provider typically pays your pension income gross, without withholding UK tax.
However, because the U.S. and UK define “pensions” differently for tax purposes, professional advice is essential. You’ll need to ensure your SIPP is structured and reported correctly under U.S. tax law, including compliance with the Foreign Account Tax Compliance Act (FATCA).
An experienced cross-border financial adviser can help you coordinate between both tax systems to optimise your net income and avoid compliance pitfalls.
SIPPs vs. QROPS: The Key Differences
For expatriates in the U.S., a QROPS transfer (moving your pension out of the UK) is generally not permitted, as there are currently no recognised QROPS jurisdictions for U.S. residents.
| Feature | SIPP | QROPS |
|---|---|---|
| Jurisdiction | UK (regulated by FCA) | Offshore (HMRC-recognised jurisdictions) |
| Eligibility for U.S. residents | ✅ Yes | ❌ No approved QROPS in the U.S. |
| Regulation | Strong consumer protection under UK law | Dependent on overseas jurisdiction |
| Currency | GBP, with potential for multi-currency holdings | Often available in GBP, USD, EUR |
| Ideal for | UK expats in the U.S. maintaining UK ties | Long-term expats in countries with QROPS access |
For U.S.-based expatriates, SIPPs are the most practical and compliant solution for maintaining control and flexibility over UK pension savings.
Why Professional Advice Is Essential
Cross-border pension management between the UK and U.S. can be challenging. The two systems operate under very different tax and reporting rules, and errors can lead to double taxation or non-compliance.
At Blacktower Financial Management, we’ve been advising expatriates worldwide since 1986. Our advisers specialise in UK–U.S. financial planning, helping clients:
- Review and consolidate UK pensions into SIPPs
- Manage investments tax-efficiently under dual tax regimes
- Structure retirement income for long-term sustainability
- Protect wealth through compliant estate planning solutions
With the right strategy, you can enjoy the best of both worlds — U.S. living and a secure, growing UK pension.
Secure Your Pension, Secure Your Future
Your UK pension represents years of hard work — don’t let it sit unmanaged. A professionally advised SIPP gives you control, flexibility, and peace of mind as you build your life in the United States.
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Speak with one of Blacktower’s cross-border pension specialists to learn how a SIPP can help you manage your UK pension from the U.S., ensuring your wealth continues to grow securely and efficiently.