Managing cross-border pensions: Common pitfalls and how to avoid them

Global mobility is now the norm. Many clients no longer spend their whole lives in one country—they may work in several jurisdictions, retire abroad, or move multiple times during their careers. For financial advisers, this shift creates opportunities to add real value, but also increases complexity, particularly when it comes to pensions.

Cross-border pension planning requires careful navigation. While the rewards are significant, mistakes can be costly. Below are some of the most common pitfalls advisers face, and strategies to avoid them.

Double taxation risks

Perhaps the most obvious challenge is the possibility of double taxation on an individual’s retirement benefits. Without the right structure, a client’s pension income could be taxed both in the country where the pension is held and in the country of residence. This not only reduces retirement income but can also create unnecessary stress for clients who assumed their planning was sufficient. There is also the risk that a pension in the wrong jurisdiction will see higher tax rates being paid unnecessarily.

How to avoid it: Understanding Double Taxation Agreements (DTAs) is vital. Jurisdictions such as Malta, which maintains an extensive network of DTAs, can provide more certainty that income will not be taxed twice. Gibraltar is also another favoured jurisdiction owing to its fixed 2.5% tax rate on retirement income.  Pension providers offering flexibility in the pension jurisdiction assist Advisers when mapping out both current and potential future residencies of their clients to ensure that tax efficiency is preserved. International pensions that meet global compliance standards, such as QROPS or international SIPPs, offer advisers more flexibility to keep arrangements valid across borders. Advisers should also stay current with both HMRC rules and local legislation in the jurisdictions where their clients may reside.

Currency volatility

For internationally mobile clients, currency risk is a serious but sometimes overlooked issue. Exchange rate fluctuations can erode income over time. For instance, a retiree drawing a UK-based pension in sterling while living in the eurozone may find their purchasing power dropping significantly if rates move adversely.

How to avoid it: Pension structures that allow multi-currency investment and drawdown can provide stability. Advisers should encourage clients to think about the currency of both their pension assets and their expected expenses in retirement. Members may also wish to hold investments in the currency where they live to mitigate these risks

Lack of flexibility

Retirement planning often assumes stability, yet many expats continue moving even after they retire. Life events such as family circumstances, health, or new opportunities may prompt a change of country. Pension arrangements that are too rigid can create frustration or force costly restructuring.

How to avoid it: Focus on pension solutions that allow flexible access to benefits and offer portability across jurisdictions. This ensures clients can adapt without being penalised by their financial structures.

The adviser’s role in adding value

Cross-border pension planning is rarely straightforward. It requires foresight, knowledge of multiple jurisdictions, and the ability to align financial arrangements with a client’s long-term life goals. Advisers who identify these pitfalls early and guide clients toward robust, flexible solutions not only safeguard wealth but also provide peace of mind.

In today’s interconnected world, this type of advice is no longer niche—it’s increasingly mainstream. By addressing tax exposure, compliance, currency, and flexibility from the outset, advisers can turn complexity into clarity, proving their value as trusted partners for globally mobile clients.

How Momentum supports advisers

For advisers managing the complexities of cross-border retirement planning, having access to pension structures that are transparent, well-governed, and internationally recognised is essential. We provide solutions across leading jurisdictions, including Malta, Gibraltar, and the Isle of Man, designed to meet global compliance standards while offering flexibility and clarity. By combining technical expertise with a focus on long-term sustainability, Momentum helps advisers deliver pension outcomes that align with clients’ increasingly international lives.