Growing speculation that UK Chancellor Rachel Reeves may restrict the tax advantages of retirement savings in her November Budget is leading British expatriates across Europe to explore transferring their pensions out of the UK.
No policies have been finalised, but Reeves is contending with a £20 billion shortfall in public finances and borrowing costs at their highest level in more than a decade, with ten-year gilt yields hovering near 4.75%.
Amid pressure to generate revenue without resorting to overt income-tax increases, speculation has intensified that pensions could become a target.
Expats Eye Offshore Pensions as Budget Looms
deVere’s Investment Director James Green, who was quoted by Daily Express, Financial Mirror, London Loves Business, Business Money, DIY Investor, and Business Matters Magazine, amongst other media, comments: “Expats are already weighing their options.
“Even the possibility of new or extended taxes on pensions is enough to set serious savers in motion. British nationals living in Europe, those planning to retire there, or other nationalities, such as Irish and Dutch with UK pensions, are now considering international solutions to protect their retirement income.”
deVere has seen a sharp rise in enquiries from UK nationals in Portugal, Spain, France, and the Netherlands. Many are considering cross-border EU IORP arrangements, especially in Malta, in anticipation of the upcoming Budget.
“The conversation has shifted from curiosity to preparation. People recognise that Malta’s EU-recognised framework provides flexibility, strong investor protection and potential tax efficiencies that could prove vital if the UK introduces tougher rules,” James adds.
Malta offers tax-efficient lump-sum withdrawals of up to 30% without a lifetime limit, flexible phased income based on the member’s chosen schedule, and, for non-residents, inheritance treatment often outside UK death duties. Portugal’s still-attractive tax regime, mirrored by comparable arrangements in Spain and France, adds to the appeal for internationally mobile retirees.
Malta and EU Frameworks Gain Investor Interest
Furthermore, frozen thresholds and hidden tax increases have already pushed millions into higher tax bands.
Even a slight prolongation of those freezes would impact a large number of middle-class pensioners. UK retirement savers living overseas, or intending to, should already be weighing the potential consequences.
Official figures reveal that UK public borrowing is significantly exceeding forecasts as the cost of servicing debt climbs, with interest payments running tens of billions above expectations.
“This fiscal reality keeps pressure on the Treasury to find revenue sources less politically explosive than broad income-tax hikes. Pensions are a perennially tempting option, which is why investors are acting even before any announcement,” deVere’s Investment Director says.
He cautions that steep pension taxes could erode market confidence: “It discourages long-term saving and investment, weakening the very economy the government aims to strengthen.
“Savers and investors naturally look for jurisdictions where the rules are clearer and more stable.”
Planning Ahead: Why Early Action Matters
James Green recommends seeking professional advice at an early stage.
“Cross-border pension planning requires time and precision,” he says.
“Waiting until after the Chancellor’s Budget could mean missing the opportunity to make compliant, efficient transfers before any new measures take effect.”
Rachel Reeves has yet to announce any changes, but the mix of fiscal strain and political considerations is prompting expatriates to contemplate proactive steps regarding their retirement income.
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