Which account for UK expats to receive UK New State Pension payments

KuriousMe

Hi, does anybody know what fees and or charges are incurred if the UK State Pension gets to be paid directly into a foreign EU bank account? I am wondering which would be best for me in receiving my forthcoming UK state pension. I could allow it to be paid into my existing UK bank's current account and then use the likes of say XE.com to transfer to my foreign EU account (which avoids my UK bank's charges) or instruct HMRC / DWP to pay it directly into my EU account (if that is even possible?) Putting it simply does the UK state Pension paid into an EU account incur fees or charges from HMRC / DWP if that is even possible to do?

molerat

Yes you can have it paid into a foreign bank account and it will be paid in local currency.  There are no charges from DWP but you will be subject to the official exchange rates on the date of payment.  It may be better if paid into a UK account as you could be more in control.  I am sure others will be along with personal experience.

poseidon1

molerat said:

Yes you can have it paid into a foreign bank account and it will be paid in local currency.  There are no charges from DWP but you will be subject to the official exchange rates on the date of payment.  It may be better if paid into a UK account as you could be more in control.  I am sure others will be along with personal experience.

Without doubt, receive in your UK account so that you control when and how much you remit via  XE.com or Wise ( formerly Transferwise ) to your foreign account.

You will want to avoid your foreign bank account uncompetitive exchange rates, and decide where you want your pension to accumulate when not needed for your foreign spending. Please note Wise currently offer to credit interest on dollars, sterling and euros held within their foreign exchange service, so worth a look.

born_again

Are your UK bank aware you are no longer living in the UK?

Bostonerimus1

poseidon1 said:

molerat said:

Yes you can have it paid into a foreign bank account and it will be paid in local currency.  There are no charges from DWP but you will be subject to the official exchange rates on the date of payment.  It may be better if paid into a UK account as you could be more in control.  I am sure others will be along with personal experience.

Without doubt, receive in your UK account so that you control when and how much you remit via  XE.com or Wise ( formerly Transferwise ) to your foreign account.

You will want to avoid your foreign bank account uncompetitive exchange rates, and decide where you want your pension to accumulate when not needed for your foreign spending. Please note Wise currently offer to credit interest on dollars, sterling and euros held within their foreign exchange service, so worth a look.

I thought HMRC converts your pension to the appropriate currency before depositing in your foreign bank account so you get an HMRC rate and not the local bank's rate. I would also not try to time the foreign exchange markets.

Marcon

KuriousMe said:

Hi, does anybody know what fees and or charges are incurred if the UK State Pension gets to be paid directly into a foreign EU bank account? I am wondering which would be best for me in receiving my forthcoming UK state pension. I could allow it to be paid into my existing UK bank's current account and then use the likes of say XE.com to transfer to my foreign EU account (which avoids my UK bank's charges) or instruct HMRC / DWP to pay it directly into my EU account (if that is even possible?) Putting it simply does the UK state Pension paid into an EU account incur fees or charges from HMRC / DWP if that is even possible to do?

See https://www.gov.uk/state-pension-if-you-retire-abroad#:~:text=You'll%20need%20the%20international,change%20due%20to%20exchange%20rates.

nigelbb

Bostonerimus1 said:

poseidon1 said:

molerat said:

Yes you can have it paid into a foreign bank account and it will be paid in local currency.  There are no charges from DWP but you will be subject to the official exchange rates on the date of payment.  It may be better if paid into a UK account as you could be more in control.  I am sure others will be along with personal experience.

Without doubt, receive in your UK account so that you control when and how much you remit via  XE.com or Wise ( formerly Transferwise ) to your foreign account.

You will want to avoid your foreign bank account uncompetitive exchange rates, and decide where you want your pension to accumulate when not needed for your foreign spending. Please note Wise currently offer to credit interest on dollars, sterling and euros held within their foreign exchange service, so worth a look.

I thought HMRC converts your pension to the appropriate currency before depositing in your foreign bank account so you get an HMRC rate and not the local bank's rate. I would also not try to time the foreign exchange markets.

This is correct. Unless you want to play at being a currency trader it's far better to have your UK state pension paid into your overseas bank account. Of course if you still have a foothold in the UK & spend any significant time there it may be more convenient to have it paid into a UK bank account so you have sterling for your UK visits.

JohnWinder

'I thought HMRC converts your pension to the appropriate currency before depositing in your foreign bank account so you get an HMRC rate and not the local bank's rate'

Mmm. Central banks publish daily exchange rates, not buy/sell rates but one single rate. I doubt HMRC would use that rate because if it is buying Euros to pay into your account each fortnight, who is it buying them from and does the seller accept the mid-market 'single' rate or do they ask HMRC to pay the buy rate? You'll get the mid-market rate with Wise and their ilk, but then need to pay several dozen basis points for their exchange service. It's not clear to me which would pay better, but one is a lot easier.

JohnWinder

'I thought HMRC converts your pension to the appropriate currency before depositing in your foreign bank account so you get an HMRC rate and not the local bank's rate'

Mmm. Central banks publish daily exchange rates, not buy/sell rates but one single rate. I doubt HMRC would use that rate because if it is buying Euros to pay into your account each fortnight, who is it buying them from and does the seller accept the mid-market 'single' rate or do they ask HMRC to pay the buy rate? You'll get the mid-market rate with Wise and their ilk, but then need to pay several dozen basis points for their exchange service. It's not clear to me which would pay better, but one is a lot easier.

JohnWinder

Please note Wise currently offer to credit interest on dollars, sterling and euros held within their foreign exchange service, so worth a look.

For EU and New York customers?

poseidon1

JohnWinder said:

Please note Wise currently offer to credit interest on dollars, sterling and euros held within their foreign exchange service, so worth a look.

For EU and New York customers?

https://wise.com/help/articles/31thpWvBl38OL54poT6VAE/who-can-use-interest-and-stocks

This is Wise list of country regions where residents can earn interest or invest their currency pots. Many of the EEA countries covered and special arrangements ( on a separate link) for those in the USA.