The UK State Pension can be paid to someone even though they are living abroad. If this is on a permanent basis, then whether they receive the annual increases will depend on where they live.

They may be entitled to the annual increase to their State Pension if they live in:

• the UK for six months or more each year;
• an EEA country;
• Switzerland; or
• a country that has a reciprocal social security agreement with the

The position regarding the taxation of the income is as follows:

• individuals who are classed as UK residents are taxed in the usual manner;
• those who are deemed to be non-residents and who live in a country which has a double taxation agreement with the UK do not pay UK tax on their State Pension, but may pay tax in the country in which they live; and
• those living in a country that does not have a double taxation agreement with the UK pay UK tax and may also be taxed in the country in which they live.