What happens to my UK pension?

You can keep your UK pensions when you move to Portugal. The State Pension still rises each year because Portugal is in the EEA, but new arrivals no longer get the old NHR 10% rate: most UK pensions are now taxed in Portugal at the normal IRS rates.

The State Pension in Portugal

You can claim your UK State Pension while living in Portugal, and because Portugal is in the European Economic Area (EEA), it goes up every year as it would in the UK. Claim it through the International Pension Centre. Check your forecast and National Insurance record on GOV.UK before you go.

The S1: healthcare paid by the UK

If you live in Portugal and get a UK State Pension (or some other exportable UK benefits), you may be entitled to an S1 form. Request it by phone from NHS Overseas Healthcare Services (+44 191 218 1999), then register it at a social security office (segurança social) and at your local health centre (centro de saúde). You and your dependants then get Portuguese state healthcare on the same basis as a Portuguese citizen, plus a UK-issued GHIC or EHIC for travel. An S1 can also stand in for the travel insurance the consulate asks for with a visa. See How does Portuguese healthcare work for Brits?

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 Class 2 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
• For 2025–26 and earlier years, the old 3-year conditions still apply
• If you work in Portugal, you pay Portuguese social security instead, which can count towards a Portuguese pension. See How do pensions work in Portugal?

How Portugal taxes UK pensions

To stop UK tax being taken from a private pension, send form DT-Individual to the Portuguese tax office to certify you are resident there; it then goes to HMRC. Until it is processed, you may need to claim back UK tax. UK providers don’t take off Portuguese tax, so you file an IRS return each year between 1 April and 30 June. Ask your adviser how the treaty treats your particular schemes

What happened to the 10% NHR rate?

Under the old non-habitual resident (NHR) regime, many retirees paid a flat 10% on foreign pensions. NHR closed to new entrants at the end of 2023. People already registered keep it until their 10 years run out. Its replacement, IFICI, is aimed at people working in qualifying jobs and gives no relief at all on pensions. If you arrive now, plan on paying the normal progressive rates. Madeira’s rates are 30% lower than the mainland’s in 2026. See Do I still pay UK tax?

Lump sums

In the UK you can usually take 25% of a pension tax-free. Don’t assume that a lump sum taken while you are Portuguese resident will be tax-free in Portugal too. Many people look at taking any lump sum before they become resident, but the right answer depends on the type of scheme, the amount and your timing, so get advice from a regulated cross-border adviser first. See How do I move money from the UK?

Leaving UK pensions where they are

• You can leave workplace and personal pensions invested in the UK and draw them from Portugal. Tell each provider your new address and check they can pay into a Portuguese account
• To move a pension abroad without heavy UK tax, the receiving scheme must be a QROPS (qualifying recognised overseas pension scheme). If it isn’t, you pay at least 40% tax
• A transfer to a QROPS can face a 25% overseas transfer charge unless you live in the scheme’s country and stay within your overseas transfer allowance. If you move country within 5 years, the charge can apply
• Be wary of anyone who contacts you out of the blue about a transfer