UK Pensions and Thailand

The frozen state pension

The UK state pension is paid to people living abroad, but annual increases are only applied in certain countries — those with a reciprocal arrangement. In countries without one, the pension is “frozen” at the rate when you moved or first claimed abroad.

The practical consequence, if increases are not applied, is that the real value of your state pension falls each year while your Thai costs rise. Any long-term budget needs to model that, not assume it away.

Private and workplace pensions

• Most UK schemes will pay into a UK bank account without difficulty while you live abroad.
• Some providers are restrictive about overseas addresses — check before you move, not after.
• Drawdown decisions taken as a non-resident can have different tax consequences; take advice first.
• Keep a UK bank account open. It makes almost everything simpler.

Getting the money to Thailand

The usual approach is to have pensions paid into a UK account and transfer to Thailand yourself, in chunks, using a specialist transfer service rather than a bank wire. You control the timing, you see the rate, and the fees are far lower.

Tax

Where your pension is taxable depends on your residence status, the type of pension, and the double taxation agreement between the UK and Thailand. Government service pensions are often treated differently from private ones.

This is worth paying an adviser for, once. The cost of an hour of proper cross-border advice is trivial against the cost of getting your residence position wrong for several years.