For British nationals residing in New Zealand, the decision to transfer a UK pension to a Qualifying Recognised Overseas Pension Scheme (QROPS) warrants careful evaluation. Current market conditions, including exchange rates and investment performance, may present a strategic opportunity to consolidate assets locally.
The GBP/NZD rate has stabilised near recent highs presenting an opportunity. In the last 12 months with the GBP/NZD exchange rate strengthening by 8% that’s quite a gain just from the currency. Its likely as the NZ economy improves (NZ Reserve Bank forecasts Nov 2025) that the relative advantage of this currency difference will decrease over 2026.
Consider this:
Converting £100,000 UK Pension at today’s rate could yield approximately $231,500 NZD, reflecting a potential 8% uplift solely from currency translation. This is based on the GBP/NZD closing rate of 2.3150 as of 28 November 2025 compared with 12 months ago.
Retaining a UK pension abroad can introduce complexities, including currency fluctuations and tax implications.
Below, we outline key considerations for transferring to a New Zealand QROPS:
Key Benefits of a QROPS Transfer
Secure Favourable Exchange Rate: The current GBP/NZD rate stands at 2.3150 (28 November close). For a £250,000 pension, this equates to approximately $578,750 NZD upon transfer.
Inheritance Tax Advantages: UK pensions inherited by non-spousal beneficiaries before age 75 may incur up to 55% inheritance tax. New Zealand imposes no inheritance tax on QROPS-held pensions, allowing full transfer to heirs.
Protection from Potential Policy Changes: The UK Lifetime Allowance was abolished in 2024, but ongoing discussions suggest possible reinstatement. A pre-2026 transfer secures grandfathered status under current rules.
Control: You have control of your money and where it is invested.
Tax-Efficient Withdrawals: Under New Zealand tax rules withdrawal from investments such as a QROPS fund are treated as a return of capitall – no taxable income, compared to the UK’s 25% tax-free lump sum limit.
Simplified Administration: Once you are over age 55 you can start making regular withdrawals (from Aril 2028 this increases to age 57) and these are not subject to GBP/NZD currencies conversion fees or fluctuations from currency movements.
Temporary Resident Tax Relief: Through the Transitional Tax Rules, growth on transferred funds remains tax-free within the first four year.
Client Case Study (Name Changed for Privacy)
Mike, aged 58, transferred £420,000 in September 2025.
- Funds converted to $972,300 NZD.
- Invested in a balanced 60/40 risk-return profile
- Subsequent market growth added 3.5% (net of tax and fees), equivalent to $34,030
- Full inheritance to his spouse, tax-free.
The Transfer Process
The transfer process for moving your UK Pension to New Zealand is relatively simply, refer to this section on our web site Transfer Process | Lyfords Pension Transfer