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The short answer
Before a UK pension lump sum reaches your bank, the provider usually takes up to 25% tax-free and deducts Income Tax from the rest, so what you send is already taxed in the UK; if too much was taken, HMRC's pension refund service covers forms P50Z, P53, P53Z and P55. To send it, keep the provider's payment statement and the bank statement showing the credit: those are the source-of-funds evidence transfer firms ask for on a large sum.
A pension lump sum is often the largest amount of money a person ever sends to Nigeria: to finish a house, clear family debts, or fund a move home. Because the sum is large and arrives in one go, it triggers checks at every stage. Knowing what was already deducted and what evidence you hold makes those checks quick.
What has already been taken off
GOV.UK says you can usually take up to 25% of a pension as a tax-free lump sum, with a maximum of £268,275, and that "tax is taken off the remaining amount before you get it" (checked October 2026). Its example: from a £60,000 pension, £15,000 is tax-free and the provider taxes the remaining £45,000. A large taxable withdrawal in one year can push you into a higher tax band.
If the provider took too much
The tax taken from a withdrawal can be more than you owe for the year. GOV.UK's pension tax refund service says you may be able to claim if you have stopped working and taken all your pension, taken a small pension lump sum, or flexibly accessed all or part of it; the forms it names are P50Z, P53, P53Z and P55, and the online service tells you which applies (page updated 25 September 2026). You need your National Insurance number, the payment and the tax taken from it, and details of other income. Claiming before you move abroad is simpler while you still have UK-based records to hand.
If you are moving to Nigeria
GOV.UK says you need to tell HMRC if you move abroad, that a UK pension can be taxed in both countries, and that the UK-Nigeria tax treaty decides where. On the Nigerian side, NiDCOM's guide to the 2026 tax reforms says money sent home and gifts are not taxable, and describes foreign pensions as not taxed unless they relate to work in Nigeria. This is information, not advice; if a large sum or a change of residence is involved, speak to a tax adviser in both countries.
The evidence transfer firms ask for
UK firms must assess the purpose of a transaction and, where necessary, its source of funds under the Money Laundering Regulations 2017. Western Union says it may ask about source of funds, purpose and relationship at any amount. For a pension lump sum, have these ready before you start:
- The pension provider's payment statement or letter, showing the gross amount, tax-free part, tax deducted and net paid.
- Your bank statement showing the credit from the pension provider.
- A short note of what the money is for in Nigeria (land, building, family support), with an agreement or invoice if you have one.
- Your ID and proof of address, matching your account details.
A pension letter plus a bank statement is a clean, single-source trail: one origin, one credit, one onward transfer.
Steps for sending it
- Let it land and clear. Wait until the payment shows as cleared in your own UK account.
- Check limits. As at October 2026, Lloyds allows up to £100,000 a day by app or online for international payments, £10,000 by phone and no maximum in branch. Money transfer apps set their own limits, often by verification level, so check yours in the app before you start.
- Compare the total cost. On a large sum, the exchange-rate margin matters far more than the fee. Lloyds, for example, publishes a margin that falls from 3.55% on amounts up to £10,000 to 1.50% at £250,000 and above. Compare against the mid-market rate.
- Send a small test first. Confirm the recipient account name and number with a small amount.
- Send the balance, possibly in parts. If you split it, tell the provider why; splitting to avoid checks is the wrong reason and can itself trigger them.
Our guide to sending a large sum for a house purchase covers the property side, and pension money and Nigerian property risks covers what to check before you commit.
Worked example (illustrative only)
Example: Femi takes £40,000 from a personal pension. Using the GOV.UK rule, £10,000 (25%) is tax-free and tax is deducted from the other £30,000 before he is paid. His provider's statement shows the gross amount, the tax-free part, the tax and the net paid; his bank statement shows the net credit. He sends £500 first to confirm the account in Lagos, then the balance, and uploads both statements when the provider asks about the source of funds. The figures are examples; your provider's statement shows your own.
Watch for pension scams
A lump sum attracts offers: land at a discount, investment schemes, people "helping" with the transfer. Never send to an account you have not verified yourself, and be wary of urgency. See source-of-funds checks for the paperwork side.
Where Pryme fits
A Pryme Personal Account lets you receive the pounds into your own UK account details and keep them in sterling until you choose to convert with Swap, in stages if you prefer. The app shows the rate and the fee before you approve. Naira is held by a licensed Nigerian microfinance bank, regulated by the CBN and insured by the NDIC up to the applicable limit.
Questions people ask
Is my UK pension lump sum taxed before I send it to Nigeria?
Usually up to 25% is tax-free and the provider deducts Income Tax from the rest before paying you, per GOV.UK.
How do I claim back emergency tax on a pension lump sum?
Use GOV.UK's pension tax refund service, which covers forms P50Z, P53, P53Z and P55 and tells you which applies.
What proof do I need to send a pension lump sum abroad?
The provider's payment statement and the bank statement showing the credit, plus a note of what the money is for.
Is pension money taxed when it arrives in Nigeria?
NiDCOM's 2026 guide says remittances are not taxable in Nigeria. Treaty and residence rules decide tax on the pension itself; take advice.
Sources
- GOV.UK: Tax on your private pension, what's tax-free · accessed Oct 2026
- GOV.UK: Claim a tax refund on a pension (updated 25 Sep 2026) · accessed Oct 2026
- GOV.UK: Tax on your private pension, tax when you live abroad · accessed Oct 2026
- NiDCOM: NGEX Diaspora Guide to Nigeria's 2026 tax reforms (Jan 2026) · accessed Oct 2026
- legislation.gov.uk: Money Laundering Regulations 2017, regulation 28 · accessed Oct 2026
- Lloyds Bank: How to make an international payment · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.