Brits in France: What you need to know about your pension
Retiring to France is a popular option for Brits, offering a relaxed and sunny climate with good wine that's still within an easy journey of family back in the UK. But ensuring that you make the most of your pension is vital for your new life.
For Brits already living in France, the good news is Brexit didn’t change everything.
UK state pensions and civil service pensions can still be able to be paid into EU bank accounts, while private pension providers should have arrangements in place to ensure they can also continue to do so.
Be aware, however, that private pensions (including the UK state pension) are taxable in France - only public service pensions remain taxable in the UK.
READ MORE: Explained: The tax situation for British pensioners in France
Brexit also brought about some changes.
Tom Goold, founder of international financial advisers Valiant Wealth, said: "It pays to be pro-active if you’re planning to move to France or any other country. If you have a private UK pension and are over the age of 55 then you have full flexible access to the pot.
"The first 25 percent - known as the pension commencement lump sum (PCLS) - is tax free but only if you are UK tax resident. Once you have established tax residency elsewhere you will pay tax according to local rules, providing that country has a double tax agreement with the UK – which France does.
"This means that even the PCLS will be taxed by France, so it can pay off to take the maximum amount out of your pension before you leave.
"If this means taking a large amount and you are worried about it being in cash then you can simply invest it via a vehicle suitable for residents of France rather than leaving it in cash and losing value against the current high level of inflation.
"There are flexible pension vehicles available for EU residents such as UK-based SIPPs (self-invested personal pensions) that offer multiple currency accounts and will pay out gross of UK tax to a foreign bank account. Most UK SIPP providers aren’t interested in non-residents as the extra compliance makes it commercially unviable as well as extra post-Brexit complications involved with giving advice."
Brits living in France can claim their UK state pension, by completing an international claim form - here - as long as they have paid enough UK National Insurance to qualify. Claims must be made no more than four months before retirement age.
The UK government’s gov.uk website has more information on pensions for Britons living overseas.
Tax matters
Many people think that if all your income comes from the UK then there is no need to do a French tax declaration. That is in fact not the case, almost all residents of France are required to fill in the annual declaration.
On top of that, your private pension will be taxed in France (at marginal rates if you are draw it down via an 'income stream', or at regular intervals).
Tax declarations begin in April.
READ ALSO How to fill out the French tax declaration
You should inform tax authorities back in the UK that you’re moving to France.
Pensioners are treated favourably in France, as they are taxed by household and there is a 10 percent reduction available, as long as it does not exceed €4,123 or fall below €422 (per household).
Currency matters
Be aware that currency fluctuations between sterling and the euro will mean that the amount that finally makes it into your bank account will change from month to month.
Scams
Brits living in France are unfortunately frequently targeted for cold-calls and scams surrounding pensions - find out more on how to protect yourself.
In all cases, it is best to obtain independent advice that's appropriate to your personal situation, from a financial expert.
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For Brits already living in France, the good news is Brexit didn’t change everything.
UK state pensions and civil service pensions can still be able to be paid into EU bank accounts, while private pension providers should have arrangements in place to ensure they can also continue to do so.
Be aware, however, that private pensions (including the UK state pension) are taxable in France - only public service pensions remain taxable in the UK.
READ MORE: Explained: The tax situation for British pensioners in France
Brexit also brought about some changes.
Tom Goold, founder of international financial advisers Valiant Wealth, said: "It pays to be pro-active if you’re planning to move to France or any other country. If you have a private UK pension and are over the age of 55 then you have full flexible access to the pot.
"The first 25 percent - known as the pension commencement lump sum (PCLS) - is tax free but only if you are UK tax resident. Once you have established tax residency elsewhere you will pay tax according to local rules, providing that country has a double tax agreement with the UK – which France does.
"This means that even the PCLS will be taxed by France, so it can pay off to take the maximum amount out of your pension before you leave.
"If this means taking a large amount and you are worried about it being in cash then you can simply invest it via a vehicle suitable for residents of France rather than leaving it in cash and losing value against the current high level of inflation.
"There are flexible pension vehicles available for EU residents such as UK-based SIPPs (self-invested personal pensions) that offer multiple currency accounts and will pay out gross of UK tax to a foreign bank account. Most UK SIPP providers aren’t interested in non-residents as the extra compliance makes it commercially unviable as well as extra post-Brexit complications involved with giving advice."
Brits living in France can claim their UK state pension, by completing an international claim form - here - as long as they have paid enough UK National Insurance to qualify. Claims must be made no more than four months before retirement age.
The UK government’s gov.uk website has more information on pensions for Britons living overseas.
Tax matters
Many people think that if all your income comes from the UK then there is no need to do a French tax declaration. That is in fact not the case, almost all residents of France are required to fill in the annual declaration.
On top of that, your private pension will be taxed in France (at marginal rates if you are draw it down via an 'income stream', or at regular intervals).
Tax declarations begin in April.
READ ALSO How to fill out the French tax declaration
You should inform tax authorities back in the UK that you’re moving to France.
Pensioners are treated favourably in France, as they are taxed by household and there is a 10 percent reduction available, as long as it does not exceed €4,123 or fall below €422 (per household).
Currency matters
Be aware that currency fluctuations between sterling and the euro will mean that the amount that finally makes it into your bank account will change from month to month.
Scams
Brits living in France are unfortunately frequently targeted for cold-calls and scams surrounding pensions - find out more on how to protect yourself.
In all cases, it is best to obtain independent advice that's appropriate to your personal situation, from a financial expert.
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