Pensions and Retirement

UK citizens and those entitled to a UK pension or benefits who are living in Italy, and want to receive payments in Italy, should apply to the International Pension Service (www.thepensionservice.gov.uk). The Pension Service will send out a form which should then be taken to the nearest social security office (INPS) in Italy. The INPS will make the necessary arrangements for your pension/benefits to be transferred to Italy. If you became entitled to a UK pension before leaving for Italy, this can either be paid to you in Italy or the UK.

If you reach retirement age after taking up residence in Italy, you can arrange to have your UK pension paid into your Italian, or UK, bank account each month. Anyone who moves to Italy before reaching retirement age should continue to pay voluntary National Insurance contributions in the UK in order to qualify for a British state pension. Depending on which country you have paid the majority of contributions in, you are eligible to draw the pension in either country. Note that pensions are not frozen at the level they reached on arrival in Italy and instead the pension will rise in accordance with any increases that take effect in the UK. Retired expatriates in most other non-EU countries are not so lucky as pensions in these cases are frozen at the level levied in the year the expatriate left to retire abroad. Leaflet SA29 available from the International Pension Centre and post offices in the UK, provides details on EU pension and social security legislation.

It would be advisable to inform the Inland Revenue office with which you last dealt about your plans, and if you are subject to tax in Italy, it is worth checking whether your employer's pension contributions are taxable there. Previously, as a UK taxpayer you would not be taxed on your employer's contributions.

Also take advice from an independent financial adviser as to whether it is best for you to continue with a personal pension scheme in the UK and for how long, and what other conditions and/or restrictions apply to the scheme once you are resident in Italy.

Most people in a position to retire overseas have an amount of capital to invest, or will have once they sell their UK home and it is essential to take good advice on how and where this may best be done. Moreover, those who intend to maintain connections with both the UK and Italy will need advice on how their taxation affairs can be arranged to their best advantage.