A private pension can of course be paid out wherever you choose to spend your retirement years, but if you have worked in the UK for long enough, you will still be eligible to claim your state pension even if you decide to relocate permanently to Italy.

Your state pension can be paid into an Italian bank account, or into a bank or building society account in the UK. However, if you divide your time between Italy and the UK, then you must decide which country you wish your state pension to be paid into: the payments cannot be alternated to coincide with different periods of the year spent in different countries.

If you change your mind about spending your retirement in Italy, or if you decide to come back to the UK for a year or more, you can request that your state pension be paid into your UK bank of building society account.

With regards to paying tax on your UK state pension, it will depend on the follow factors:
-  Whether or not you are declared as a “non-UK resident” with regards to tax purposes.
-  The country in which you are a tax resident.
-  If you alternate between the UK and Italy, it is probable that you will be classed as a UK resident for questions of tax amongst other things.
-  If you reside outside the UK permanently, then you will almost certainly be classed as a non-UK resident.

In the case of the last point, your taxability will depend on whether you are resident in a country that holds a “double taxation agreement” with the UK – meaning that you will not be obliged to pay UK tax on your UK state pension, but instead you will be taxable in your country of residence. If you live in one of the countries that do not hold a “double taxation agreement”, then you will have to pay UK tax as well as running the risk of being taxed a second time in your country of residence.

In order to find out more about your tax position with regards to your UK state pension if resident in a foreign country, it is worth contacting HMRC Residency. If you are a working resident of a country outside the UK, it may be possible for you to make contributions to a state pension in your country of residence. This is possible in most EEA countries, and other such as Canada and New Zealand also have special arrangements.

It depends on the length of time you are working in a foreign country, but in some instances it is possible to have the payments you made into a pension plan credited to your state pension in the UK. Another alternative that may be available to you is to receive two pensions – one from the UK and one from your previous country of work and residence. Decision like these will be made when you reach UK state pension age, and will take into account where you live/have lived and worked.

If you are relocating to Italy in order to spend your retirement, then you will be required to contact the following entities before leaving to inform them of your departure and to supply them with your new address:
-  The International Pension Centre (if you are already receiving a State Pension)
-  HM Revenue & Customs' National Insurance Contributions Office
Your local Tax Office

It is usual for The Pension Service to send you a form about four months before you reach UK state pension age. This form asks about any insurance and residence you may have in other countries. If you are less than three months away from UK state pension age, but you have not yet received this form, you are advised to contact the International Pensions Centre.

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