What happens to my UK pension?

You can keep your UK pensions when you move to Canada, but the rules change. The UK State Pension stops rising, topping up National Insurance from abroad got harder in April 2026, and moving a pension to Canada carries tax traps on both sides.

The State Pension is frozen in Canada

You can claim your UK State Pension while living in Canada. It only goes up each year if you live in the EEA, Gibraltar, Switzerland or a country whose agreement with the UK provides for increases. Canada has a social security agreement with the UK, but it doesn’t cover yearly increases, so your pension stays at the rate you first get in Canada. If you go back to the UK, it rises to the current rate again.

Over a long retirement, inflation makes a frozen pension worth much less. Build that into your plans.

What the UK–Canada agreement does

• If you are posted to Canada by a UK employer for a limited time, you may be able to keep paying UK National Insurance instead of Canadian contributions
• Time you lived or worked in the UK can help you meet the minimum residence needed for Canada’s Old Age Security (OAS) and the contribution rules for some Canada Pension Plan (CPP) benefits
• Each country still pays its own pension, based on your own record there
• It doesn’t unfreeze the UK State Pension

OAS normally needs 10 years’ residence in Canada after age 18, and a full OAS needs 40. See How do pensions and savings work in Canada? Check how the agreement applies to you with Service Canada

Voluntary National Insurance after April 2026

Gaps in your National Insurance (NI) record reduce your State Pension. The rules for paying voluntary contributions from abroad changed on 6 April 2026:

• You can no longer pay the cheaper Class 2 contributions for time abroad
• You can pay Class 3 (£18.40 a week in 2026–27) if you lived in the UK for 10 years in a row, or paid 10 years of qualifying NI in total
• A year of Class 3 costs about £957 and can add about 1/35th of the full pension, roughly £6.89 a week
• Check your NI record and forecast on GOV.UK before you leave

Because the pension is frozen in Canada, extra years buy a pension that won’t rise. Weigh the cost against how long you expect to draw it.

UK workplace and personal pensions

• You can leave them where they are. They stay invested in the UK
• You can usually take money from age 55 (rising to 57 from April 2028), depending on the scheme rules
• Tell each provider your new address and check they can pay into a Canadian bank account

Under the UK–Canada tax treaty, pensions paid to a Canadian resident are generally taxed in Canada, and you declare them on your Canadian return. Canada doesn’t recognise the UK’s 25% tax-free lump sum, so a lump sum taken while you are resident can be taxable in Canada. Timing matters: taking money before you become resident can be treated very differently. Get cross-border tax advice first. See Do I still pay UK tax?

Moving a UK pension to Canada

To move a UK pension abroad without heavy UK tax, the receiving scheme must be a QROPS (a qualifying recognised overseas pension scheme). Very few Canadian schemes are on HMRC’s list, and you can’t transfer straight into a personal RRSP as a QROPS.

The other route is to take a lump sum from the UK pension once you are Canadian resident and pay it into a Registered Retirement Savings Plan (RRSP). Canada can let you deduct an amount equal to a foreign pension lump sum paid into an RRSP, so it isn’t taxed until you draw it. The lump sum may be taxed in the UK first. This only suits some people and the rules are strict.

Get advice and avoid scams

MoneyHelper gives free guidance on UK pension transfers. Paid advice should come from a regulated adviser who understands both countries, ideally FCA-authorised in the UK and licensed in your province. Be wary of anyone who contacts you out of the blue offering a transfer. Report suspected pension scams to Report Fraud.