Mounting speculation that UK Chancellor of the Exchequer Rachel Reeves could tighten the tax treatment of retirement savings in her November Budget is prompting British expatriates across Europe to weigh moving their pensions out of the UK, according to deVere Group investment director James Green.
No measures have yet been announced, but Reeves faces a £20 billion shortfall in public finances alongside borrowing costs at their highest in more than a decade, with ten-year gilt yields hovering around 4.75%.
The pressure to raise revenue without increasing headline income tax has led to debate that pensions may come under scrutiny.
“Expats are already weighing their options,” James Green notes.
“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 Group, which supports 80,000 expatriate clients, reports a marked rise in enquiries from UK citizens in Portugal, Spain, France and the Netherlands. Many are exploring cross-border EU IORP structures, particularly in Malta, in anticipation of the Budget.
“The conversation has shifted from curiosity to preparation,” he explains. “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.”
Malta permits tax-efficient lump-sum withdrawals of up to 30% with no lifetime cap, phased income payments on a schedule determined by the member, and inheritance treatment often outside UK death duties for non-residents. Portugal’s favourable tax regime, along with similar arrangements in Spain and France, continues to appeal to mobile retirees.
James Green stresses that concerns are not limited to high-net-worth individuals.
“Frozen allowances and stealth tax rises have already drawn millions into higher brackets,” he says.
“Even a modest extension of those freezes would hit many middle-class pensioners. Anyone with UK retirement savings who lives abroad, or plans to, should be considering the implications now.”
Official data show UK public borrowing running well above expectations as debt-service costs rise. “Interest payments are tens of billions higher than projected,” notes the deVere director.
“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.”
He warns that heavy taxation of pensions would harm market confidence. “It discourages long-term saving and investment, weakening the very economy the government aims to strengthen,” he says.
“Savers and investors naturally look for jurisdictions where the rules are clearer and more stable.”
James Green recommends seeking professional advice early.
“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.”
He concludes: “Rachel Reeves has not confirmed any changes, but the combination of fiscal pressure and political calculation is enough for expats to be considering decisive action on their retirement income.”