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A quick answer that is purely a personal point of view. Others may have better - or different solutions to the one I chose.My UK state pension is paid directly into my UK bank account in Sterling. My 'private'  company pension used to be transferred by the company, free of charge, to my bank account in Italy. I had an agreement with - the then - bank manager here that it would arrive in GBP and they would exchange it when the rate was most favourable. But with the credit crunch the company said they could no longer pay for the transfers and to continue would cost me £3.50pm. I (obviously) jumped at the chance. (Other transfers cost, at that time, a minimum of £35).The extra 'allowances' that I am entitled to from the UK - Winter Heating Allowance is also paid directly into my UK account. My bank is aware that I live 80+% of my time here, as is the Inland Revenue. My income (pensions etc.) and a little from translations, is declared and taxed in the UK.If you can make a similar arrangement with a bank manager here (rather unlikely I feel nowadays) and exchange will take place at a favourable moment, then maybe transfer in GBP might be OK. But with the state of €/£/$ these days, transfer in €uro's is a sure recipe for loosing a chunk of your pension before it even gets to you.  Currently my pension, like so many others in the same boat has lost almost 34% of it's value. That means a very tight belt if you don't want to chip aways at hard earned savings. 18 months ago I was enjoying €145 for every £100.  Last November, before the USA elections, that had dropped to €103 for every £100!!!

I would read the information on costs to transfer money, if you are bothered about the rate you will get ... I would have thought from a cost point of view, if you can afford to. Then paying into a uk account and making a transfer monthly or quarterly using a foreign exchange company would be the best cost option. Not perhaps the safest in the current climate, so look for a well known company. These companies will barter a rate with you fixed for say 2 years and transfer your money to an �������� bank each month or quarter. Or you can simply have an account with them and go on-line and make a transfer when the rate is in your favour (limits apply... few thousand). Some charge others don't , but their rate is not as good. The rates will be likely far better than any bank.... here is a link for a compare site

Thanks to you both, it seems from the information I have that the pension service bulk buy euros at a good rate, and then pass this on to their customers, but will do more research just in case this is too good to be true.A

I think you may lose some of the gain from the pension service exchange rate by the bank charges in Italy, unless, as said before you can get a good deal with your bank over here. We have ours paid in the UK and then transfer into a Nationwide account, withdraw from the Post Office Bancomat and therefore get current rate with no �������� bank charges on the electronic deposit into an account here. If needed, you can then deposit Euros in cash into you �������� account, the bank does not charge a fee, ( or at least ours doesn't).

Have just come across TPAS an independant non profit making organisation which gives free information and guidance regarding pensions. They can be contacted atenquiries@pensionsadvisoryservice.org.ukThought it might be helpful for others with questions regarding pensions.A