By Simon Huften, QROPS Specialist | Strata QROPS

QROPS vs Leaving Your UK Pension in the UK - Which Is Right for You?

One of the most common questions Simon Huften hears from British expats in Canada: should I actually transfer my UK pension, or am I better off leaving it where it is?

It is a fair question – and the honest answer is that it depends on your pension type, its value, your age, and whether you are permanently settled in Canada. There is no single correct answer that applies to every British expat. What there is, however, is a clear framework for working out which option fits your specific situation.

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This page gives you that framework. It covers the key differences between transferring to a Canadian RRSP via QROPS and leaving your pension in the UK – for both Defined Benefit (DB) and Defined Contribution (DC) pensions – including the scenarios where transfer makes compelling sense and the scenarios where it does not. One factor that has changed the calculation significantly since 2024: the April 2027 UK Inheritance Tax deadline.

Are you eligible for a QROPS transfer? →

What You Are Actually Choosing Between

When a British expat in Canada considers their UK pension, the core choice is between two positions:

	Leave Your Pension in the UK	Transfer via QROPS to a Canadian RRSP
Where it sits	Remains in the UK pension system – governed by UK pension legislation	Moves to a Canadian RRSP – governed by Canadian tax and estate law
Currency	Paid in GBP – your retirement income depends on GBP/CAD exchange rate at drawdown	Held and paid in CAD – aligned with your Canadian life and cost of living
UK IHT (from April 2027)	Your pension death benefits enter your estate for 40% IHT – new from April 2027	Canadian RRSP sits outside UK IHT entirely – no exposure, regardless of estate size
Estate planning	UK trustee has discretion over lump sum death benefits; DB survivor benefit typically 50% of income	You name your beneficiaries directly; spousal RRSP rollover passes 100% of fund tax-free
Tax treatment in Canada	UK pension income is taxable in Canada under the UK-Canada tax treaty – no double taxation	RRSP grows tax-deferred in Canada; withdrawals taxed as Canadian income at your marginal rate
Access rules	Governed by UK scheme rules – age and drawdown conditions set by the scheme	Governed by RRSP/RRIF rules – flexible Canadian drawdown from age 55 (57 from April 2028)
Ongoing administration	Managed by UK scheme trustees; currency conversion required on each drawdown	Managed by Canadian provider (iA Clarington or Industrial Alliance); all in CAD

Both options are legal, established, and used by British expats in Canada. The question is which one fits your situation – and that question splits differently depending on whether you hold a DB or DC pension.

Defined Benefit Pensions: The Transfer vs. Leave Decision

DB pensions – final salary and career average schemes – are the most complex transfer decision and carry the most significant regulatory requirements. The FCA’s regulatory starting position (PS18/20) is that transferring a DB pension is unlikely to be in the member’s best interests in most cases. That is the regulatory default. It does not mean transfer is wrong – it means independent FCA-regulated advice is mandatory before any DB transfer where the CETV exceeds £30,000, and that advice must be given by a qualified pension transfer specialist.

Simon Huften works within this framework. Every DB transfer he manages begins with the FCA independent advice stage – and some do not proceed past it, because the advice confirms that staying in the DB scheme is the better outcome for that client. That is as it should be.

With that context in place, here is how the DB decision breaks down:

Defined Benefit pension transfers – the full process →

The Case for Transferring a DB Pension

April 2027 IHT exposure is removed entirely. A DB scheme death benefit - typically a lump sum of 2–4x salary for active members, or a continued survivor pension - will be included in your estate for UK IHT from April 2027. At a CETV of £400,000, that is a potential £160,000 IHT liability for your beneficiaries. A completed QROPS transfer removes this exposure.
Currency consolidation. Your DB income in retirement is paid in GBP. If you are living in Canada and spending in CAD, every monthly pension payment involves an exchange rate risk. A DB scheme paying £3,000/month at a GBP/CAD rate of 1.58 delivers ~CAD 4,740. At 1.40, the same pension delivers ~CAD 4,200. Over a 20-year retirement, exchange rate movement materially affects your purchasing power.
Estate planning clarity. A DB scheme survivor benefit is typically 50% of your pension income, paid to your spouse or dependants after your death. A Canadian RRSP spousal rollover passes 100% of the fund to your spouse with no immediate tax event - a structurally superior outcome for estate planning in most cases.
Transfer multiple assessment may reveal a favourable exchange. The CETV of your DB scheme may be significantly higher than the actuarial value of the benefits you would receive in retirement - particularly in low-interest-rate environments. If the transfer multiple (CETV ÷ annual pension) exceeds 30–35x, the capital value you are capturing may represent better value than the scheme income stream. This is one of the assessments Simon makes in the CETV review stage.

The Case for Leaving a DB Pension in the UK

Guaranteed income for life. A DB pension pays a guaranteed income regardless of investment performance. Once transferred to an RRSP, that income security disappears - your retirement income depends on drawdown from a market-linked investment portfolio. For British expats who value income certainty above all else, this trade-off may not be appropriate.
Scheme-specific enhancements may be lost on transfer. Some DB schemes carry enhanced early retirement terms, protected tax-free lump sums, inflation linking above CPI, or generous dependant benefits that would be forfeited on transfer. These must be assessed and quantified before the transfer decision.
The FCA independent advice stage may conclude against transfer. If a qualified pension transfer specialist determines that the guaranteed income stream of your DB scheme outweighs the CETV value in transfer, and that the April 2027 IHT position does not change that balance for your estate planning goals, the advice may be to retain the scheme.

Defined Contribution Pensions: The Transfer vs. Leave Decision

DC pensions – money purchase, workplace auto-enrolment, and group personal pensions – have a different decision profile from DB. There is no guaranteed income stream to surrender. The transfer decision is primarily about where your accumulated pension pot grows, how you access it in retirement, and how it is treated on your death.

Defined Contribution pension transfers – the full process →

The Case for Transferring a DC Pension

April 2027 IHT exposure is removed entirely. Your DC pension pot will be included in your UK estate for IHT from April 2027 at 40%. If you are UK-domiciled - as most British expats remain, regardless of Canadian residency - your beneficiaries face a direct IHT charge on your pension's value. A completed QROPS transfer removes this.
Currency alignment. A DC pension growing in GBP in a UK-based investment fund carries both currency and jurisdiction risk. Transferring to a Canadian RRSP aligns your retirement savings with your Canadian life - the currency, the investment market, and the drawdown currency all match.
RRSP flexibility. A Canadian RRSP gives you flexible drawdown control that many older UK DC schemes do not offer. You draw what you need, when you need it, at your marginal tax rate - without the rigid income rules of older UK pension frameworks.
Consolidation. If you hold multiple UK DC pensions from different employers, a QROPS transfer consolidates them into a single Canadian RRSP under one provider and one set of investment instructions.

The Case for Leaving a DC Pension in the UK

If you are uncertain about permanent Canadian residency. The QROPS 5-year rule means that returning to the UK within 5 full UK tax years of the transfer may trigger a 25% HMRC charge retroactively on the transferred amount. If your Canadian residency is not settled, leaving your pension in the UK avoids this risk entirely.
If the pension is below the minimum viable transfer size. Transfer administration costs - CETV requests, FCA advice fees for DB pensions above £30,000, provider setup - have a minimum viable threshold. For very small DC pensions, the economics of transfer may not justify the process.

The April 2027 IHT Calculation: What Staying in the UK Now Costs

Until October 2024, UK pension death benefits sat outside the estate for UK Inheritance Tax purposes. From April 2027, that exemption ends. If your UK pension remains in the UK system after April 2027 and you are UK-domiciled, your beneficiaries face a 40% IHT charge on your pension’s value above the nil-rate band.

Most British expats in Canada remain UK-domiciled for IHT purposes – domicile is determined by legal tests, not by where you live. Moving to Canada permanently does not automatically change your domicile. The IHT risk is real for the majority of this audience.

UK Pension Value	Potential IHT Exposure at 40%	Amount Your Family Does Not Receive	Position After QROPS Transfer
£200,000	~£80,000	~£80,000 diverted to HMRC	Zero IHT – RRSP governed by Canadian estate law
£300,000	~£120,000	~£120,000 diverted to HMRC	Zero IHT – RRSP governed by Canadian estate law
£400,000	~£160,000	~£160,000 diverted to HMRC	Zero IHT – RRSP governed by Canadian estate law
£600,000	~£240,000	~£240,000 diverted to HMRC	Zero IHT – RRSP governed by Canadian estate law
£800,000	~£320,000	~£320,000 diverted to HMRC	Zero IHT – RRSP governed by Canadian estate law

Note: figures above are illustrative examples assuming the pension value is fully subject to 40% IHT above the nil-rate band. Your actual IHT position depends on your total estate, available nil-rate bands, residence nil-rate band, and domicile status. Consult a qualified UK tax advisor for your specific position.

The IHT change does not affect pension income you draw during your lifetime. It affects what your beneficiaries receive on your death – which is a separate calculation from your own retirement income planning.

Full IHT hub: UK Pension Inheritance Tax 2027 – What British Expats in Canada Need to Know →

UK Inheritance Tax – GOV.UK

When Leaving Your Pension in the UK Is the Right Call

A QROPS transfer is not the right answer for every British expat in Canada. Here are the specific scenarios where Simon Huften’s assessment is typically to retain the UK pension:

Your residency in Canada is not settled.

The QROPS 5-year rule means that if you return to the UK within 5 full UK tax years of the transfer, HMRC may apply a 25% charge retroactively on the full transfer value. If you are not certain that Canada is your permanent home, leaving your pension in the UK preserves your optionality.

You are approaching or above age 70.

Simon Huften’s working age ceiling for QROPS transfers is 70, driven by the RRSP-to-RRIF conversion requirement. As age 70 approaches, the remaining retirement horizon over which RRSP benefits are realised shortens – and the economics of transfer need to be assessed against that shorter horizon.

Your pension value is below the minimum viable transfer threshold.

For very small DC pensions, the transfer administration costs – in time, in CETV request charges, in provider fees – may not be justified by the pension’s size. This is assessed on a case-by-case basis.

The FCA independent advice confirms the DB scheme income stream outweighs the CETV value.

Independent advice on DB transfers above £30,000 CETV is mandatory – not advisory. If that advice concludes that the guaranteed income stream of your DB scheme is more valuable than the transfer capital for your specific situation and goals, Simon Huften will not recommend proceeding.

You intend to return to the UK in retirement.

If your long-term retirement plan is to return to the UK, a QROPS transfer to a Canadian RRSP is the wrong direction – and the 5-year rule would likely trigger a retrospective charge on return. Retaining your UK pension may preserve valuable retirement benefits and simplify future cross-border pension planning.

Your DB pension carries scheme-specific enhancements that transfer would forfeit.

Some DB schemes offer inflation linking above statutory minimums, early retirement enhancement at favourable actuarial terms, or dependant benefits beyond the statutory requirement. These cannot be replicated in a Canadian RRSP. If the enhancement value is material, retaining the scheme may be the correct outcome.

Frequently Asked Questions

Is it always better to transfer my UK pension to Canada rather than leave it?

No – and anyone who tells you it always is would not be giving you regulated financial advice. Whether to transfer depends on your pension type, its value, your age, your residency position, and your retirement goals. For DB pensions, FCA-regulated independent advice is mandatory for CETVs above £30,000 – and that advice concludes against transfer in a meaningful proportion of cases. For DC pensions, the decision is generally more straightforward, but the QROPS 5-year rule and minimum viable transfer size still apply. Simon Huften will tell you directly if your situation does not call for a transfer.

What is the main reason British expats in Canada choose to transfer their UK pension?

In 2026, the April 2027 UK Inheritance Tax change has become the primary trigger for the transfer decision. From April 2027, UK pension death benefits will be included in the deceased’s estate for IHT at 40%. Most British expats in Canada remain UK-domiciled for IHT purposes – meaning their UK pension is exposed to this charge regardless of Canadian residency. A completed QROPS transfer removes that exposure entirely: once in a Canadian RRSP, the pension is a Canadian asset governed by Canadian estate law, with no UK IHT. Currency consolidation, RRSP flexibility, and estate planning advantages are additional reasons – but the IHT deadline is the current urgency driver.

What happens to my UK pension if I leave it in the UK and die after April 2027?

If you remain UK-domiciled and your UK pension stays in the UK system after April 2027, your pension’s value is added to your estate for UK Inheritance Tax on your death. IHT applies at 40% on the portion of your total estate above the nil-rate band (currently £325,000 for individuals, with additional residence nil-rate band in some cases). For a British expat with a £400,000 pension and an estate already above the nil-rate band, that represents approximately £160,000 in IHT on the pension alone – paid by your beneficiaries before they receive anything. A completed QROPS transfer before April 2027 removes this liability. Transfer after April 2027 removes the IHT exposure for future deaths – it does not apply retroactively.

Can my spouse receive my UK pension if I leave it in the UK?

It depends on your pension type. For a DB pension, your scheme will typically pay a survivor’s pension to your spouse – usually 50% of your pension income – on your death. For a DC pension, your nominated beneficiary can inherit the remaining pot, though from April 2027 this is subject to IHT at 40%. By contrast, a Canadian RRSP allows you to name your spouse as the direct beneficiary. On your death, your spouse assumes the full RRSP via a spousal rollover – with no immediate Canadian income tax event. The full fund passes to your spouse, not 50% of an income stream, and not after a 40% IHT charge.

How long does a QROPS transfer to Canada take if I decide to proceed?

It depends on your pension type. A Defined Contribution pension transfer typically takes 6–8 weeks under normal conditions. A Defined Benefit pension transfer takes 12–16 weeks from CETV request through to fund arrival in the Canadian RRSP – 4–6 weeks for the CETV request, 4–6 weeks for FCA independent advice, and 4–6 weeks for the transfer instruction and scheme processing. Scheme delays – particularly from large public sector or corporate DB schemes – can extend this to 20+ weeks in some cases. As of August 2026, DB pension holders have a narrowing window to complete a transfer before April 2027. Simon Huften actively manages CETV requests and scheme timelines to reduce delay risk at every stage.

Find Out Which Option Is Right for Your Specific Pension

The comparison above gives you the framework. The answer for your situation depends on your pension type, its value, your age, and your estate planning goals – none of which this page can determine for you.

No commitment. No fees. Just a clear picture of where you stand and what your options are.