Case Study: Expat Returning to UK — Pension Planning With a DB, UAE DEWS and a DC Pot (2026)

When Andrew left the UK for Dubai in 2003, pension planning was the last thing on his mind. He was 36, ambitious, and focused on building his career in infrastructure consulting. Twenty-two years later, he is returning home with a complex mix of pension assets spread across two countries — and some significant decisions to make before he retires at 62.

Andrew’s case illustrates how common it is for expats returning to the UK to face a pensions puzzle. Multiple schemes, different rules, and the ever-present question of whether to consolidate or keep things separate all need careful consideration.

Andrew’s Pension Position

When Andrew sat down with a pension transfer specialist, his position looked like this:

1. UK Defined Benefit Pension (Deferred)

Before leaving for Dubai, Andrew had worked for a large UK engineering firm for 11 years. He left with a deferred DB pension — sometimes called a “frozen” pension — that would pay him approximately £8,400 per year from age 65. His employer had provided a Cash Equivalent Transfer Value (CETV) of £290,000.

2. UAE DEWS Account (Workplace Savings)

Since 2020, Andrew’s UAE employer had contributed to the Daman DEWS (Digital Employment Worksite Savings) scheme — the UAE’s first regulated occupational savings system, introduced as an alternative to the traditional end-of-service gratuity. His DEWS pot stood at approximately £85,000 (converted from AED).

Unlike a UK pension, DEWS is a workplace savings account rather than a pension scheme. The funds are investible and portable. Andrew wanted to understand whether he could transfer this into a UK pension and, if so, how it would be taxed.

3. Small UK DC Pension

Andrew also had a small defined contribution pension from a previous UK employer, now worth £22,000, sitting in a default lifestyle fund with higher-than-average charges.

What Andrew Wanted

Andrew’s goals were straightforward, but achieving them required careful planning:

• Consolidate his pensions into one place for simplicity
• Retire fully at age 62 with a combined income of around £35,000 per year (including State Pension)
• Pass any remaining wealth to his adult children
• Understand his tax position as a returning UK resident

Question 1: Should Andrew Transfer His UK DB Pension?

This was the central question. Andrew had two main reasons for wanting to transfer his DB pension:

1. Flexibility: He wanted to take income when he needed it, not from a fixed age with a fixed amount
2. Death benefits: His DB scheme offered a spouse’s pension of 50% (£4,200/yr) after Andrew’s death, but Andrew had no spouse. He wanted to pass any remaining pot to his children.

The CETV Analysis

To transfer a DB pension, the Transfer Value Analysis (TVAS) is a critical tool. The adviser calculated the Required Rate of Return (RRR) — the investment return Andrew would need in a SIPP to match the guaranteed income he would be giving up.

• DB income: £8,400 per year from age 65, with RPI-linked increases (capped at 5%)
• CETV: £290,000
• Early retirement (62) reduction: Scheme actuarial reduction would reduce DB income to approximately £6,800/yr if taken at 62
• RRR calculated: 6.2% per year net of charges

The Death Benefit Argument

Andrew’s main argument for transferring was death benefits — wanting to leave money to his children. However, the adviser explored this carefully:

• Since the 2027 pension IHT changes (taking effect from April 2027), unspent SIPP pots will fall within the estate for inheritance tax purposes. Historically, DC pensions sat outside the estate — but this is changing.
• Andrew’s DB scheme offered a 5-year guarantee period — if Andrew died within 5 years of taking benefits, a lump sum equivalent to 5 years of payments would be paid to his estate.
• At his projected income level, the DB scheme’s guaranteed inflation-linked pension actually provided more long-term security than a SIPP likely would, especially if Andrew lived into his 80s.

Weighing up the 6.2% RRR, the diminished IHT advantage from 2027, and the longevity risk of outliving a SIPP, the adviser’s conclusion was that transferring the DB pension was unlikely to be in Andrew’s best interest.

Question 2: What About the UAE DEWS Account?

This is where Andrew’s case became particularly interesting. DEWS is a UAE-registered savings scheme — not a UK-registered pension. Bringing those funds into the UK therefore involves different considerations than a straightforward pension transfer.

How DEWS Works

Introduced in 2020, DEWS replaced the traditional UAE end-of-service gratuity (EOSG) for companies in the DIFC (Dubai International Financial Centre). Employers contribute the equivalent of the EOSG calculation into individual DEWS accounts, which employees can invest across a range of funds. On leaving employment or departing the UAE, the balance is paid out.

Tax Implications of Bringing DEWS to the UK

Unlike a UK-registered pension, DEWS is a savings scheme — there is no special tax treatment for contributions or withdrawals in the UK. Key considerations include:

• Income tax: If Andrew withdraws his DEWS balance while UK resident, the funds may be subject to UK income tax as foreign employment income or overseas savings income, depending on the nature of the contributions. HMRC’s treatment can be complex, and this is an area where specialist tax advice is essential.
• Overseas pension transfer: DEWS cannot be transferred directly into a UK-registered pension in the same way a QROPS-qualifying overseas pension scheme might. However, after receiving the DEWS payout, Andrew could choose to contribute those funds into a UK pension — subject to annual allowance limits.
• Annual allowance: The UK annual allowance is currently £60,000 per year (or 100% of UK earnings, whichever is lower). If Andrew’s earnings on returning to the UK are substantial, he could potentially contribute significant sums and receive tax relief on them.

Question 3: The Small DC Pension — Transfer or Leave?

Andrew’s £22,000 DC pension was a more straightforward decision. The adviser reviewed the scheme and found:

• Annual management charge (AMC) of 0.85% — higher than modern platform alternatives
• Default lifestyle fund with high equity allocation switching to fixed income 10 years before retirement — not suitable for Andrew’s timeline or risk appetite
• No enhanced protections or guaranteed annuity rates (GARs) — so nothing valuable would be lost by transferring

The recommendation here was to consolidate this pot into a modern SIPP with lower charges and more appropriate investment options. With 4 years until Andrew’s target retirement age of 62, even a modest reduction in annual charges could make a meaningful difference to the final pot.

Andrew’s State Pension Position

Andrew’s 22 years in Dubai also had implications for his State Pension. He had 11 qualifying National Insurance (NI) years from his time working in the UK before 2003. To receive the full new State Pension (currently £11,502 per year for 2024/25), you need 35 qualifying years.

Andrew had a potential shortfall of 24 qualifying years — though some years working back in the UK would add to this, and he could also consider voluntary NI contributions to fill gaps and boost his eventual State Pension entitlement. The deadline for filling historical gaps was extended to April 2025, but ongoing voluntary contributions remain possible going forward.

The Recommended Approach

Taking all of Andrew’s circumstances into account, the adviser outlined a phased approach:

1. Retain the UK DB pension — the guaranteed income of £8,400/yr (or £6,800/yr from 62 with early retirement reduction) provides a valuable income floor that would be difficult to replicate from a SIPP given the 6.2% RRR.
2. Transfer the small DC pension (£22,000) into a lower-cost SIPP with an appropriate investment strategy for a 4-year runway to retirement.
3. Seek specialist tax advice on the DEWS pot before drawing it or contributing to a UK pension — the tax treatment depends on Andrew’s specific employment structure and residency history.
4. Check State Pension forecast and consider voluntary NI contributions to build towards the full State Pension over the coming years of UK employment.
5. Review income sequencing — at 62, Andrew could draw flexibly from his SIPP, take the early retirement reduction on his DB pension, and bridge to State Pension age at 67 with careful planning.

Key Lessons From Andrew’s Case

Andrew’s situation highlights several themes that are common for expats returning to the UK:

1. Don’t Assume Consolidation Is Always Best

Andrew’s instinct was to put everything in one pot. But the DB pension’s guaranteed income, inflation protection, and longevity cover made it more valuable than the CETV alone suggested. Sometimes keeping things separate is the right answer.

2. Overseas Savings Are Not the Same as Overseas Pensions

The DEWS scheme is not a pension — it is a savings vehicle. The tax treatment when bringing it to the UK is different from a QROPS-qualifying scheme. Understanding this distinction was critical to Andrew’s planning.

3. State Pension Gaps Can Be Filled (At a Cost)

Years abroad often create NI gaps. These can sometimes be plugged via voluntary contributions — and the return on each year of voluntary NI contributions is often favourable compared to other savings.

4. Timing of Residency Matters for Tax

When Andrew draws on overseas savings, his UK tax residency at that point will affect the treatment. Planning the timing of any DEWS drawdown relative to returning to the UK could make a meaningful difference to his tax bill.

Seeking Professional Advice

Andrew’s case involved defined benefit pension transfer analysis, overseas workplace savings, State Pension planning, and the interaction with UK income tax on his return. No single article can cover every aspect of a situation this complex.

If you are an expat returning to the UK — or someone with a mix of pension types accumulated over a varied career — the starting point should always be specialist advice. Pension transfer specialists who are FCA-authorised and hold the appropriate DB transfer qualifications (G60, AF3 or equivalent) can carry out proper Transfer Value Analysis and help you understand what you would be giving up before making any irreversible decisions.

All figures in this case study (CETVs, income projections, allowances) are either hypothetical illustrations or reflect published regulatory figures as at 2026. They should not be taken as personal financial advice.

Frequently Asked Questions

Can I transfer a UAE pension to a UK SIPP?

It depends on the type of UAE scheme. A QROPS-qualifying overseas pension scheme can potentially be transferred to a UK-registered pension. However, a scheme like UAE DEWS is a workplace savings vehicle rather than a pension, and cannot be transferred directly — funds would need to be withdrawn first, with UK tax implications considered. Always take specialist tax and pension advice before acting.

Do I need to pay UK tax on overseas pension income when I return?

Generally, once you become UK tax resident, your worldwide income — including overseas pension income — may be subject to UK income tax. The exact treatment depends on the type of income, any applicable double taxation treaties between the UK and the source country, and your specific residency history. HMRC guidance and specialist tax advice are essential.

What happens to my UK deferred DB pension while I work abroad?

A deferred DB pension is preserved in your former employer’s scheme and continues to accrue increases as specified in the scheme rules (typically linked to CPI or RPI, often with caps). You remain entitled to that deferred income when you reach the scheme’s retirement age. You can request a CETV at any time to assess the option of transferring to a personal pension.

Can expats returning to the UK fill gaps in their State Pension record?

Yes. HMRC allows UK citizens to pay voluntary Class 3 National Insurance contributions to fill gaps in their NI record, subject to time limits. Filling gaps can be worthwhile given the current full new State Pension of £11,502 per year (2024/25). Use the government’s “Check your State Pension” service at gov.uk to see your forecast and identify any gaps worth addressing.

Is a pension transfer specialist required for a DB transfer if I am returning from abroad?

Yes. If your DB pension CETV is £30,000 or more, FCA rules require you to take regulated advice from an FCA-authorised firm, regardless of whether you were previously resident abroad. The adviser must hold the appropriate DB transfer qualification. This rule applies wherever you are currently resident at the time of the transfer.