Your UK pension when emigrating from the UK to United States

If you're moving from the UK to United States, one of the first money questions is what happens to your pension. The destination system here is 401(k) / IRA.

Can you transfer a UK pension into 401(k) / IRA?

There is no QROPS route into a US 401(k) or IRA — the US has no QROPS-registered schemes. You generally leave the pension in the UK; the US-UK tax treaty gives UK pensions some recognition, but the US taxes worldwide income and imposes strict foreign-account reporting (FBAR/FATCA). Get US-UK cross-border tax advice before you become US-resident.

The 25% overseas-transfer charge

HMRC can apply a 25% Overseas Transfer Charge to a UK pension moved into a QROPS that doesn't meet the exemption conditions. Getting this wrong is one of the most expensive mistakes in the whole move — model it before you transfer anything.

Your real options

• Leave it invested in a UK SIPP or workplace scheme and draw it later — usually the simplest, and often the best.
• Where a compliant QROPS exists in United States, transfer after taking advice on the overseas-transfer charge and the destination's tax treatment.
• A blend — consolidate UK pots into one SIPP now, decide on transferring once you're settled and the tax picture is clear.

Decide what happens to your pension before you move money — the right answer is tied to your UK residence status, your age, and whether United States has a QROPS-registered scheme.