jwinch

Does any one know if you automatically forfiet your state pension when you emigrate?

Or are you still entitled to something based on the amount of NI you have paid?

Pollyana

I think it gets frozen and you get what there is of it when you retire, but it doesn't get increased or anything.
Mind you, thats only what I THINK! I'm not sure, you need more of an expert than me.
I'm sure someone out there has looked into it in more detail.

Prestons

Hi

If you contact the pension dept. they will send you a booklet called 'Social Security abroad' which is really useful & covers pensions.

We are considering continuing to pay class 2 NI contributions from Oz as this entitles you to a full state pension when you qualify for it. It is only about 2 pounds a week so not very much to pay out & can be paid yearly.

However, as to the question of whether the state pension will still exist in 30 years time, who knows.............!!

Pollyana

Hmm, will get the booklet and weigh up the pros and cons - as you say, will there be a state pension then, and also, will it be worth anything?

Ben.M

You'll find some useful information on the subject at
www.britishpensionersnz.org.nz &
www.britishpensions.org.au.

Ben

porkchop

It is dependent on National Insurance contributions.

One important thing to remember though.
The pension will not rise in payment. No inflationary increase.
Once payment starts it stays level for life.
Could be worthless if you live to be 90.

PC

Don

Not worthless. Assuming you live to 90, then let's assume inflation of 2.5% for male retiring at 65. At 90, 25 years of inflation will have eroded the real value of the pension by maybe 65%? (Can't do the maths without my mate Mr Finance Director!)

And if you go back nd live in UK as tax resident pensioner for 6 months, I believe you qualify for the correct pension amount when you move abroad again (but still not index linked, could just be a good idea to do that every 10 years).

Ben.M

Don't know about Oz but in NZ...

"The majority of us in, New Zealand, are unaffected by the Frozen Pension Issue in that, whatever our UK DSS Pension may amount to, our pensions are "topped-up" to the New Zealand Superannuation Rate."
Source - British Pensioners Association (NZ) Inc

Therefore, unless anyone can tell me otherwise, I don't see the point in paying any voluntary contributions.

Ben

brisbec

The people I stay with in Brisbane have lived in Oz for over 40 years now (£10 ticket, lucky buggers) and they get a pension which is about £50 between them a week. So it's not much but it's better than a kick in the slats!

Don

Ben - the person you quoted must be assuming when he says 'the majority of us' that most pensioner ex-Brits in NZ receive ONLY the state pension. My understanding is that the NZ (and Aus) state pensions are effectively a safety net (welfare) to ensure you at least get enough to live on.

But correct me if I'm wrong, I think the NZ state pension is reduced more or less dollar-for-dollar by any other income (incl pension income) the pensioner has coming in.

So, yes, if you have a frozen or reduced UK state pension, it will at least be topped up to NZ pension levels. But anyone who has a private pension + UK state pension (even if only a % of the full UK pension) is unlikely to get any NZ pension at all if that income exceeds the basic NZ state pension.

So the main benefit of paying voluntary contributions after you leave the UK would be to optimise your pension, ie to include a full UK pension in your income as a pensioner. I worked it out once a year ago using discounted values and I think I remember that for me, emigrating at age 40 and getting UK pension at 65, I would have to live something like another 7 years before I was 'quids in', ie the extra pension I got more that compensated for the extra contributions. After that, it was easy money! So if we are all going to live on (typically) into our eighties, worth thinking about.

Don

Uh-oh! Better correct myself.

1. If you receive an overseas pension ...
Any benefit or pension you qualify for from an overseas Government is likely to be deducted from your New Zealand Superannuation. For more details call 0800 552 002 and ask for our International Services office.

2. Receiving other income....
Other income does not affect New Zealand Superannuation unless your partner is 'included' in your payments. If your partner is 'included', you can have other income of up to $4160 a year before tax ($80 a week) between you before your Super is affected. If you earn more than this, we will take 70c off your payment for each dollar of income over this limit.

http://www.workandincome.govt.nz/tex....html#P22_1254

So it's only the UK state pension that will reduce your NZ state pension dollar-for dollar.

porkchop

The UK government used as one of the reasons for not index linking expats pensions in certain countries.
Expats retired in NZ would not receive as much financial assistance from the NZ government if we were to index link their Uk pensions.
Poor excuse.

A pensioner retired to south Africa at age 65 on £34 per week.
He is now 82 and still on £34 per week.

If inflation is low its not too bad, but I dont see inflation in Oz or NZ averageing 2.5% over a 25 year period.

PC

Ben.M

To resurrect this thread, now that we have established that any money received from your UK state pension will be offset against your NZ state pension, is there any advantage in continuing to pay voluntary NI contributions following migration?

Ben