rose2015

Is it true that once you claim your pension if you live aboard you wont get any increases.

quiltman

Not entirely! It depends where you move to. Anywhere in the EU you'll get the increase, but NOT if you move ot , for example, Canada or Australia - then it's fixed at the level when you left. I'm in the Philippines and we get it because there is a social Security Agreement between here and UK. In exchange for UK giving us the annual increase, the UK gives Filipinos in the UK certain credits towards their Filipino pension etc. Its all explained here : https://www.gov.uk/government/public...-state-pension

bobd22

Just to add under the UK Brexit proposals it is intended that the annual increase will continue post Brexit,for state pensioners living in EU, of course nothing has been signed of as yet but that is what they propose.

rose2015

Thank you for that must have been the way I read it.

rose2015

Another question is it worth paying voluntary n.i. payments. My forecast says I will get 139.82 a week when i reach retirement age in 2030. It says the most I can get is 159.55 a week. Is it worth me making voluntary payments or not to bother to get the higher amount.

tebo53

Hi Rose, 2030 is a long way off! Anything can change by then even the actual retirement age might rise again.

Have you thought about taking out a good private pension and sinking as much as you can afford into it. You have the option to reduce payments if times get a bit hard. You will find private pensions are more flexible. I took out extra pensions 10 years before,and knowing, that I was coming to live in Spain. I managed to retire 2 years early by just using my private income.

Steve

Pulaski

Pensioners in the US get increases too, but IIRC most of the countries where pensioners get increases are small and not many pensioners retire there.

quiltman

True Pulaski. The largest countries outside the EU are USA and Turkey ,although the Philippines has population of 100million! However only around 35000 UK expats.

Pulaski

A lot of British citizens retire to India, which doesn't get increases, but that isn't talked about much because they are almost exclusively ethnic Indians.

mrken30

It is costing me £11.40 a month to top up my State pension. It just went up this month from £11.20. It's not that much money.

Pulaski

In most cases "yes", but especially if you are able to pay Class 2 conributions. Ignoring matters of investment returns and inflation, the payback period (time to get back the money you paid in) for additional contributions is, at Class 2 rates, IIRC less than a couple of year.

spainrico

I have been doing the sums on paying in my final 5 years to achieve the maximum 35 years contributions for a full Uk State pension.

BUT....my concern is even with 35 years paid in the full pension is not payable to those who were contracted out (and paid into a private company pension scheme)

This based on the logic that as full contributions (in terms of the amount -not years) has not been paid in - the government will not pay out the full amount.

Whilst I cannot dispute this logic - it seems impossible to me (not being a pensions expert) to calculate what they will pay out. I have written to the DWP twice with this specific question and on both occasions received a standard reply bearing no relevance to my question (and also their letters contained spelling errors....)

Any comments/advice/knowledge anyone - preferably in easy to understand language and not pensions gobbledegook

Fred James

I was contracted out for many years. At the time I really had no idea what that meant. However, when I got my pension I was somewhat surprised by how much it was. The extra pension due to being contracted out (presumably because of the way the contracted out bit was reinvested) resulted in an extra pension of £210 a month. With all the other weird additions like GMB I get £10700 a year. No complaints about that!

CapnBilly

In summary, generally If you were contracted out, because you were a member of a private scheme, then you (and your employer) paid reduced NI contributions. Consequently you did not build up any additional state pension (called SERPS, SP2 etc). because your private pension was supposed to pay you more, but at least the amount you would have received if you had not contracted out. This was known as Guaranteed Minimum Pension (GMP).

When the system change in 2016 to a flat rate scheme ( so excluding additional pension) the calculation of your new pension excludes your GMP ( because you receive it in your private pension). However, as you were part of the pre 2016 scheme you were guaranteed to receive the basic rate state pension as a minimum. This is known as your starting rate, and was locked in at April 2016, so you cannot receive any less than this amount. So for example my forecast Pension under the new scheme ( so excluding GMP) is about £30, but I will receive the basic state pension of about £120.

The only other point I would make is that part of your GMP (built up between 1978 and 1987) that you receive from your private scheme is, under the pre April 2016 scheme increased by the government from your state pension age, and your employer until then if you receive it earlier. However, under the post April 2016 scheme the government will stop paying these increases. So part of your private pension may not be increased if it was built up during this period.

However, even if you have more than 35 years already, each contribution year after 2016 will be under the new scheme. So 1 years contributions will generate about £4.50 per week. If you are making voluntary contribution at Class 3 rate it costs about £750. So as long as you live about 4 years after you retire you will receive all your money back (post basic tax). I don't think that you will get a better return anywhere,

bobd22

Yes I am the same over 40 years contributions but all in military or police so contracted out even though I never paid anything for the military pension as part of the signing on deal. But yes basically I like you will get around £120 per week i.e. the basic state pension pre changing to single tier pension.