K and M

I am due to receive my State Pension in February 2011 and the Works and Pensions have been in touch regarding the amounts and possible deferments etc, I mentioned that I am awaiting a Visa for permanent residency in Australia, they informed my that the Pension would be frozen on departure from UK, so I saw little point in deferring.

fiz

I feared as much-they get you every way, don't they?!

johnemo

This is an except from 'State Pension Deferral - Your Guide (SPD1)' from direct.gov.uk

Does living abroad affect State Pension deferral?

If you normally live outside the UK and you have not already claimed your State Pension, you can put off claiming when you reach State Pension age.
When you finally do claim, we will work out your pension entitlement based on the amount you would have got if you had been claiming it at the time. This will include any yearly increases to the State Pension, even if you are living in a country where these increases don’t normally apply.

Looks like you were misinformed?
John.

K and M

Thanks John, I will get back in touch with W&P and double check the deferal option as it makes sense to defer as I will not need the pension for a while as I receive income from other sources, will let you know the response I get

Les Avalook

I think a similar conclusion was reached on PomsinOz a few months back but I can't find the thread, they seem to suggest that you would get the indexing of the pension if you deferred it, however if the £ continued the downward fall the gain could be very quickly wiped out by a currency drop.

At the moment the £ does not seem to have reached a base yet, so difficult to project forward a year or two.

Les Avalook

This is another useful site for pension advice.

http://www.pensionsadvisoryservice.org.uk/

K and M

Les, many thanks for the update and link, it certainly spells it out very clearly below.

In summary if you defer your state pension before you start to draw it you will enjoy all future increases even if you are are permanently resident in Australia.

Remember though that when you do finally draw your pension it will be frozen at that amount if you remain resident in Australia.

It is my intention to defer my pension, I can't below that the £ to AU$ can get much worse

From the link supplied by Les:-

You can defer your state pension once you get to pension age, even if you are non-resident.
In these circumstances the DWP Pension Service will continue to add annual increases to your pension even if you do not live in one of the reciprocal agreements countries referred to earlier. For those who live in a country where annual increases are not normally awarded their pension will be flat rated from the point that they start to collect it. This may seem a strange approach but the DWP Pension Service has confirmed that those not normally entitled to annual increases will receive them if their pension is in deferment for the period of that deferment.

fiz

Very useful..so if you defer, you get not only the increased pension because you deferred (which is about 10.4% per year) but also the annual cpi increase of around 2% until you eventually draw it? So if you deferred for 2 years, your weekly pension would be about £125 rather than £100 in round terms

Sounds a bit too good to be true....though I suppose if you defer for 2 years you are giving up around £10000......

Yet another thing to think about!!!

johnemo

Her is something else to think about -
IF in 2015 the state pension is raised to £140 AND you have deferred your pension for 5 years will you get an even bigger pension based upon those deferred years.......

I'll get my coat......

fiz

I think I'll settle for the pound / oz dollar rate returning to something over 2...

I'd feel like a millionaire then!

Oldtimers

Thank Heavons for this website! I remembered reading somewhere that the interest from the AoS Bond could be paid into any designated account, so when my daughter got the letter telling her to open the Account - I gave her our Westpac account number for the interest to be paid into. Even though she forgot to take the email with her and ended up telephoning us at 5 a.m. to ask us again for the information - this is much easier than having to remind her every six months or so that she possibly owes us some money!

sandch

Some useful pensions stuff on here recently - thanks everyone for the info.

The growth figures have done a bit of good for sterling today, some good news at last. Watch as the media (BBC especially) attempt to undermine confidence however by hunting for the negatives; good news seems to be bad news for broadcasters and the newspapers.

The're been a solid move away from an almost unbelievable level of 1.57 back towards 1.61. Did we ever think the day would dawn where 1.61 would look like a good rate?

All the best

Steve

fiz

I know what you mean-I have re-done all my calculations to see if I could survive on 1.6, trying not to remember that I could have changed all my money at 2.05!!!!

Still, 12 months is a long time in the currency markets-especially the Australian one apparently.Perhaps 2011/12 will see things improving

Good news in our family is that my daughter who was working in Sydney for a UK company, being paid in sterling and consequently working for 66% of what she started on, has just got an Aussie job which will help her family's finances no end-and I guess if we parents can get Aussie jobs, that will soothe the pain until things recover

Fiz

Barbaran

I so agree Steve the media seems intent on scare mongering and therefore making everyone in a permanent state of anxiety. What is it that people don't want to understand that the country has maxed out it's credit card by living beyond its means and no-one is going to like having to cut back or being affected in any way but the media reporting on what could happen is often the most negative scenario. The latest one that police will cut back surveillance on the activity of paedophiles because of cutbacks is so awful.
What happened to the great British spirit of all pulling together? Last one to leave turn the light off!

WOW £1.61 !!!

ancpar

Well said Barbara, couldn't agree more. Let's show everyone just what we are made of.