Claiming Your UK State Pension While Living in Israel

A retired teacher from Manchester planning her move to Israel had already made peace with a frozen pension. A friend who had emigrated to Australia told her that his UK State Pension had been stuck at the same figure for a decade, never rising with inflation, and she assumed Israel would be the same. It is not. Israel sits on the right side of one of the more consequential lines in British pension policy, and a UK retiree in Tel Aviv is treated very differently from one in Melbourne.

If you are a British national drawing, or about to draw, the UK State Pension and you plan to live in Israel, the headline is good and the detail is manageable. Your pension keeps rising each year, it can be paid to you in Israel, and where it is taxed depends on a residence question with a generous answer for new arrivals. What follows is how each of those pieces works, and what you have to do to make them work from your side of the Mediterranean. If you are still weighing the move as a whole, our retirement guide for UK nationals sets out the wider picture.

The Good News: Your Pension Is Not Frozen

The single most important fact, and the one most often gotten wrong, is that the UK State Pension is uprated in Israel.

The UK increases the State Pension paid to people living abroad only where it is legally required to, which in practice means countries that have a reciprocal social security agreement with Britain containing an uprating provision. The United Kingdom and Israel signed exactly such a convention on 29 April 1957, and it remains in force. Because of it, a pensioner ordinarily resident in Israel receives the same annual increase as a pensioner in Britain. Retirees in the well-known frozen destinations, Canada, Australia, and New Zealand among them, get no increase at all and watch inflation erode the real value of a fixed figure year after year.

The increases are not trivial. The pension rose by 4.8% from April 2026, taking the full new State Pension to £241.30 a week, with the older basic State Pension at £184.90 a week. Over a long retirement in Israel, the difference between an uprated and a frozen pension runs into the tens of thousands of pounds. So the first thing to do is unlearn the frozen-pension assumption that so many British emigrants carry with them.

Getting It Paid in Israel

Payment is handled entirely from the UK side, by the Department for Work and Pensions through its International Pension Centre. You do not deal with any Israeli office to receive the money.

You can have the pension paid into a bank account in Israel, converted to shekels, or keep it flowing into a UK account and move it yourself. Payments abroad are generally made every four or thirteen weeks rather than weekly, so budget for the rhythm. The DWP will also, from time to time, send a "life certificate" that you must have signed by a suitable witness and return, its way of confirming that an overseas pensioner is still alive; ignore it and payments can be suspended until you respond.

There is a genuine choice to make about where the money lands. Having it paid into an Israeli account is convenient but ties you to the DWP's exchange rate, which is rarely the keenest. Many retirees instead receive it in a UK account and convert through a specialist service. Whichever you choose, opening the Israeli account itself has its own hurdles for someone arriving from abroad, and a pension is exactly the kind of steady foreign credit a bank will want explained.

Where the Tax Falls

Two systems could in theory tax the same pension, and the rules exist to stop that happening. The answer turns on where you are resident, not on where the pension comes from.

Israel taxes its residents on worldwide income, so once you are an Israeli tax resident your foreign pension is within the Israeli net in principle. Britain, for its part, steps back: under the UK-Israel double taxation convention, a pension is taxable only in the country where the recipient is resident, so an Israeli resident is not taxed by the UK on it. The State Pension is in any case paid gross, with no UK tax deducted at source, which makes the mechanics cleaner than for many private pensions.

If you keep your centre of life in Britain and only spend part of the year in Israel, you may remain a UK resident and a non-resident of Israel, in which case Israel does not tax the pension at all. That residence question is more slippery than people expect, and it is worth getting right; our note on the Israeli tax residency centre of life test explains how the line is drawn.

In Practice: A new immigrant (oleh) is exempt from Israeli tax on foreign-source income, including a foreign pension, for ten years from the date of becoming resident, under Section 14(a) of the Income Tax Ordinance 1961. A full new State Pension of £241.30 a week is roughly NIS 57,000 a year at about NIS 4.6 to the pound, and for a British oleh that entire sum falls outside Israeli income tax for a full decade through the Israel Tax Authority (Rashut HaMasim). The exemption is automatic from the date residency begins and needs no annual application, but you should keep evidence of your aliyah date in case it is queried later.

After the Exemption: Section 9A Relief

The ten-year clock does eventually run out, and what happens next surprises people who assumed the pension would then be taxed like ordinary Israeli income. It is not, because Israel gives foreign pensions a specific concession.

From year eleven, a foreign pension benefits from the relief in Section 9A of the Income Tax Ordinance. In broad terms, the Israeli tax on the pension is capped at the amount you would have paid on it in the country that pays it, had you been resident there with only that pension income, and a portion of the pension is treated as exempt. For a modest UK State Pension, the UK tax that a resident pensioner would have paid on it is often little or nothing once the UK personal allowance is taken into account, which keeps the Israeli charge correspondingly low. Fixing this relief is done on an Israel Tax Authority form, and it is worth doing properly rather than defaulting to full marginal rates.

The interaction between the two tax systems, and the mechanics of claiming treaty relief, are covered in more depth in our guide to the UK-Israel tax treaty for British non-residents.

Health Insurance and Bituach Leumi

A pension pays for your living costs; it does not, by itself, buy you into Israeli healthcare. That comes through the National Insurance Institute, and for a resident it is not optional.

Becoming an Israeli resident brings an obligation to register with the National Insurance Institute (Bituach Leumi) and to pay health insurance contributions, which in turn give you membership of a kupat holim and access to the public health basket. A retiree living on a foreign pension with little or no Israeli-source income pays the minimum contribution rather than a percentage of the pension, but the registration itself is the gateway to cover, so it should be done promptly on arrival.

In Practice: Health coverage flows from the National Health Insurance Law 5754-1994, and residents must pay health insurance contributions to the National Insurance Institute (Bituach Leumi) to receive it. A resident with no Israeli-source income pays a minimum health contribution of roughly NIS 123 a month as of January 2026, a figure the Institute resets annually, and there is a waiting period for new residents who are not returning citizens before the public basket becomes available. Register within the first weeks of establishing residency, because a gap in registration can leave you paying privately for care in the interim.

What Often Goes Wrong

Common Mistake: British retirees who enjoy the ten-year Section 14 exemption, never file anything in Israel because nothing is due, and then carry on the same way after the exemption quietly expires. Once year eleven begins the pension becomes reportable, and the Israel Tax Authority (Rashut HaMasim) can assess back tax with interest and linkage differentials, plus penalties, running years back. Reversing an assessment and claiming the Section 9A relief retroactively is far more work than filing correctly from the start. Diarise the end of your exemption when it begins, and get advice on your Israeli filing position before that eleventh year, not after a demand arrives.

A second, avoidable error is failing to tell the DWP that you have moved, or moving without arranging overseas payment, so that a life certificate goes to an old UK address and payments are suspended. And a third is assuming, because the pension is not frozen, that nothing needs doing at all; the uprating is automatic, but the tax position, the health registration, and the payment arrangements are not, and they reward being set up deliberately. For the broader tax consequences of spending long periods in Israel, see our guide to the tax implications of an extended stay.

Practical Checklist

• Confirm your State Pension forecast with the DWP before you move, and review whether voluntary National Insurance top-ups would raise it.
• Tell the DWP International Pension Centre that you are moving to Israel, and decide whether to be paid into an Israeli or a UK account.
• Compare the DWP exchange rate against a currency specialist before choosing where the pension lands.
• If you are making aliyah, note your residency start date and diarise the end of the ten-year Section 14 exemption.
• Register with the National Insurance Institute promptly on becoming resident to secure health cover.
• Return any DWP life certificate on time to avoid a suspension of payments.
• Take Israeli tax advice on your Section 9A position before your eleventh year of residency, not after.

Speak With an Israeli Attorney

A UK State Pension travels to Israel more comfortably than most British retirees expect, but the tax and health-registration steps around it reward being handled deliberately rather than left to chance. We help British nationals settle their Israeli residency and tax position, plan for the end of the new-immigrant exemption, and coordinate with UK advisers so the pension is paid, taxed, and reported correctly on both sides.

Contact us for a confidential initial consultation.