Can anyone clarify if your UK state pension with associated NI contributions is related to whether you are contracted in or out of SERPS???? Or is that something completely different?

I posted this on the other NI thread today but it is quite relevnt.

'...when you move back to the UK you will immediately be entitled to most of the other benefits like healthcare etc.

Pension is a different subject. First, you need to pay contributions for a minimum number of years, otherwise you will get nothing. From memory, for men this is around 15 years.

FOR THIS REASON ALONE, MIGRANTS WITH A NUMBER OF YEARS' NI CONTRIBUTIONS SOMEWHAT SHORT OF 15 YEARS (SAY, 8-14 YEARS) SHOULD ALMOST DEFINITELY THINK POSITIVELY OF MAKING VOLUNTARY CONTRIBUTIONS WHILST IN AUS/ NZ TO CROSS THE MINIMUM THRESHOLD.

Sorry for shouting but it's important.

Secondly, extra contributions does mean extra pension and it's a very effective way of saving provided you're going to live on a fair bit (and draw pension) past retirement age.'


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Presumably whatever you receive from the UK at retirement will be deducted from the amount you receive in Oz? Provided they have a similar thinkg in oz. In NZ, currently provided you meet certain criteria everyone gets a flat rate of pension. You must declare income/pensions from other sources so the state amount from NZ can be adjusted accordingly.

Basically, it's swings and roundabouts. Either have the money from the UK and have it deducted from the NZ or just claim the NZ. You can't have both state pensions.

Re: ni contributions
 

Yes, that's absolutely correct. :)
Unless, of course, you move to one of the countries that is on the list where the UK state pension will then increase every year as they do in the UK. However, Australia is not one of those countries :(

As far as I'm aware, there is no such requirement in Australia. The UK state pension is simply deemed as a foreign income/pension. Otherwise there would simply be no point in making continued voluntary contributions to the UK NI fund.

In certain circumstances I believe the UK state pension might be able to be earned tax free in Australia (as it is pension income), but not all circumstances. One of our UK-Aus tax experts might be able to help clarify this though.

Well there would be point in making voluntary contributions if you are going to loose the Uk pension and find out that come retirement you are back in the UK, now without any pension.

This is also raises some important points;

http://money.msn.co.uk/Bank_Plan/pen...ad/default.asp

Also, NZ have many reciprocal agreements that I don't thik exist for Australia. I guess there is a certain benefit to living in NZ.

http://www.dss.gov.uk/lifeevent/bene...3/sa08_oct.pdf

I do like the note about pension contributions and taking into account the 13 weeks journey between NZ and the UK :)

Thank god for jet planes, eh!

Sure, in that case then I can see it being worthwile.

But for most people that's an awfully big 'maybe' to base spending £7 extra a week on (while earning non-GBP currency) in the likely-slim-possibility that they may return to the UK once retired. In that case, especially seeing as it is deducted from your NZ state pension, perhaps a better option would be to invest that money into a seperate retirement fund/annuity of some sort that will be paid out to you whether you're in NZ or UK, and will not affect your NZ pension? Just a thought...