Pensions in Portugal

Transferring your UK pension to Portugal 

Retirees living in Portugal who are in receipt of a UK State Pension can opt to receive it into their UK bank or their Portuguese account. You may claim your UK state pension by contacting the International Pension Centre in the UK. There are different ways to receive it, either in the UK or directly in Portugal. For non-EU countries it will depend if there is an agreement in place between your country and Portugal (including the UK post-Brexit). 

If you decide to have your pension paid into your UK bank account in sterling, the rate received when you transfer it into euros will obviously vary, depending on the exchange rate. However, if you use a currency transfer (or FX company) to send euros into your Portuguese account (see Settling In for how to set up a Portuguese bank account) they can set up a regular payments plan for transfers that will help you budget every month. 

As you are only too aware in recent months, currencies yo-yo up and down and currency brokers can also offer you better rates than banks on the transfer of lump sums - not just regular transfers like pension or any other UK income.

In Portugal the taxation of pensions depends on what type is being used - they differentiate between State Retirement and Occupational Pensions; Government Service Pensions and Personal Pensions. If you have complex or multiple pension funds it is advisable that you seek advice from a financial advisor before you leave the UK to find the most tax-efficient way of structuring these assets, whether in the UK or Portugal, or both. It is key that they look at your investments as a whole, not piece-meal, at the outset.