UK Pension Transfers to New Zealand

A brief overview

Transferring your UK pensions to New Zealand is a major financial step, and as with any decision there are benefits and drawbacks.

Many Brits who have settled in New Zealand and Kiwis who have returned to New Zealand after working in the UK find that the benefits of transferring their UK pensions to New Zealand can outweigh any possible drawbacks, but you should make a fully informed decision rather than just hearing one side of the story.

General Benefits of Transferring your UK Pensions to New Zealand:


  • Some New Zealand pension schemes can give you more investment choice than UK personal and occupational pensions,
  • Your benefits cannot be reduced by your former employer or pension scheme administrators if your UK pension scheme faces a deficit,
  • There is no cap to the level of income you can take
  • There is no reduction in your pension fund if you decide to retire early – many UK final salary pension schemes reduce your fund value by 4% for every year you retire early.


  • You can consolidate personal and occupational pensions into one NZ pension scheme, and
  • It will be easy for you to keep up with pensions legislation and tax changes that may affect your pension (rather than trying to comb the UK news for relevant details).


With your pension funds held in New Zealand Dollar-denominated investments, you eliminate the impact of currency exchange fluctuations and bank transfer charges on your pension income.


Your pension can be taken as a tax-paid lump sum or tax paid income. If you leave your pension in the UK you will be liable to NZ tax on any income you take from it. If you transfer your UK pension to NZ during the 4 year tax exemption period or take your lump sum payment from your UK pension there is no tax to pay. Outside of the 4 year tax exemption period there may be tax to pay to the IRD on lump sum withdrawals and transfers. To find out more, you would need to take independent tax advice on this or get in touch with us and we can put you in touch with our recommended experts.


You can keep your UK pension transfer in Pounds with our preferred New Zealand pension scheme, while you wait for the right exchange rate. UK pension providers can take anything from weeks to months to process pension transfer requests, and you have no control over when they send the funds to your New Zealand scheme – being able to choose when you convert your Pounds into New Zealand Dollars can prove very valuable to you.


The investment advice is provided by Investment Adviser Savvy Wealth Limited who have access literally thousands of investments from NZ, Australia, UK, Europe and USA. Savvy Wealth Limited can customise a portfolio just for you – an option which is restricted to a select few in the UK. You can be as active or hands-off as you like. You receive regular updates on the performance of your pension fund, and regular advice on how to adjust your investments to best suit your objectives.


We have been involved with transferring UK pensions to New Zealand since 2002, and have extensive experience of UK and New Zealand financial services.  At Henderson Consulting we take the time to make sure that you understand your options.


We fully disclose our charges from the outset, and believe that they are some of the most reasonable you’ll find.By consolidating your schemes into one NZ QROPS scheme you may enjoy a reduction in scheme costs as well as less time and effort keeping updated.


Some pension transfer services demand to know the size of your fund before they’ll even talk to you – we’ll investigate transferring any kind of eligible pension for you, large or small.


While we can just transfer your pensions, we also can introduce you to a full range of financial services specifically chosen for migrants from the UK and returning Kiwis, including Mortgages, Foreign Exchange, Stockbroking, Investments, Wills, EPAs, Life and Health Insurance, and NZ & UK tax.

Possible Drawbacks of transferring your UK pensions to New Zealand:


  • Your New Zealand pension fund value and therefore part of your retirement income will depend on the performance of the investments in your pension fund – you forfeit any of the income guarantees that may be built into your UK pension fund, and
  • You also lose any spouses or dependants pensions, annual increases and inflation-linked increases that may be built in to your UK pension scheme. However, if transferred to a NZ QROPS the transferred fund forms part of your estate and can therefore continue to generate an income without reduction if required to your beneficiaries after your death.


New Zealand pension schemes are generally liable to more tax than UK pension schemes as they grow – in New Zealand pension schemes investment income is taxed at the company rate of 28% and investments outside NZ and Australia may be liable to New Zealand’s Fair Dividend Rate tax.

Lump sum withdrawals from UK pensions after the 4 year tax exemption period has expired will be taxable by the IRD based upon years of residency in NZ. For clarification you would need to take independent tax advice on your individual situation.

This is quite a contrast to UK personal pensions, which grow almost free of tax – but as a rule New Zealand pension funds are designed for capital growth rather than income, so the NZ tax burden on most pension funds is relatively small. And of course, you can then take benefits from your New Zealand pension fund as tax-paid, with no further income tax to pay.

Many find that the opportunities afforded to them by having access to a larger range of high quality investments more than makes up for paying more tax on the growth of their NZ pension fund.


UK and/or New Zealand pension regulations, pension scheme regulations, and New Zealand and/or UK tax regulations may change at any time, and we cannot anticipate what the impact of these changes on your pension fund may be.


  • Once you have transferred your UK pension funds to New Zealand you cannot transfer them back into your UK scheme. This is the first reason NOT to transfer your UK pension funds to New Zealand until you are sure that you are going be living in New Zealand when you retire.
  • If you do return to the UK to live, and the HMRC suspects that you transferred your pension funds to New Zealand without intending to retire there, they may impose significant tax penalties on your pension funds. This is the second reason NOT to transfer your UK pension funds to New Zealand until you are sure that you are going to be living in New Zealand when you retire.

General Conditions for Transferring your UK Pension to NZ

  • Most private and company pensions can be transferred even ones where drawdown has commenced, but not once an annuity has been purchased. UK State pensions can not be transferred as well as unfunded UK Government schemes such as the NHS, Police, Armed Forces and Teachers pensions.

  • The transfer payment must be made direct to the receiving scheme in New Zealand, which must be a scheme recognised by the UK HMRC as a (Qualifying) Recognised Overseas Pension Scheme (ROPS).

  • Controlling directors of UK companies and high earners may need to apply to the UK Inland Revenue for permission to transfer their pension funds.

  • If your pension fund is worth more than £1.0731 million (your Lifetime Allowance from 6th April 2021), you may be subject to tax if you have not already applied for and received protected rights. The ability to apply for protected rights ceased on 5th April 2009.

Is there a time limit for pension transfers to New Zealand?

You can only transfer your UK pensions once you have permanently emigrated from the UK. From 9th March 2017 certain transfers to and from QROPS schemes will be subject to a 25% tax charge. These do not apply if you are resident in the same country in which the  QROPS is established. If your residency status changes within 5 full tax years from the date of the transfer then this HMRC charge of 25% will apply – to find out more click here

If you transfer UK pension during your transitional tax residency then the IRD will not tax the transfer of your UK pension. If you transfer your UK pension outside of that 4 year period, then the IRD will tax the transfer. The taxable amount of the pension transfer increases year by year (after the 4 years) up to a maximum of 100% of the transfer being taxable at your marginal tax rate – to find out more – click here

Please note that once your pension is transferred to New Zealand, you cannot transfer it back to a UK pension fund. If you enter this investment before you have been outside the UK for 5 complete tax years, then return to live in the UK before you have been outside the UK for 5 years, you will need to leave your pension in a QROPS pension fund until you reach retirement age or be liable for a hefty UK tax charge.

Is there anything I should do before I leave the UK?

You can keep paying into your UK personal pensions once you are resident in New Zealand if you still have some UK income. This generally needs to be earned income rather than investment income. Under HMRC rules you only qualify for tax relief on pension contributions up to the ‘basic amount’ of ₤3,600 and you are only eligible for this relief for five tax years after you leave the UK.

Some Brits we have come across have been advised to “consolidate” their UK personal and occupational pensions into a UK SIPP before they emigrate to New Zealand. This is not an essential step in transferring your pensions to New Zealand, and it is likely to incur additional costs.

Gathering your paperwork

You can however request the transfer value and paperwork to transfer to an overseas scheme for benefits you hold in money Purchase schemes also known as Defined Contribution schemes such as Personal Pensions, Stakeholder Pensions, Self Invested Personal Pensions and pensions used for contracting out of S2P/SERPS before you arrive in New Zealand.

We recommend that you do not apply to your pension administrator for transfer values and paperwork for benefits you hold in UK Final Salary pension schemes also know as Defined Benefit schemes until you arrive in New Zealand, as in most cases they will only be valid for 3 months, so could almost be out of date before you arrive. Many UK pension schemes will not provide a second transfer value until a further year has passed, and they are likely to charge you a fee of around £250 if made within 12 months. Unfunded UK Government schemes can not be transferred such as Teachers, Police, Armed Forces and NHS pensions. In an unfunded defined benefit pension, no assets are set aside and the benefits are paid for by the employer or other pension sponsor as and when they get paid.

Please contact us if you wish to find out more or request our free comprehensive Pension Information Guide.