missile

I have no knowledge of the German state pension system.
I am not an expert on pensions, but I trust the analysis from those who are.
This is very true. One should consider that in Spain:

• cost of living is lower,
• workers average wage is lower,
• will have paid less in contributions,
• will retire earlier,
• His pension will be a greater % of his working income and will provide a better standard of living for longer than his UK equivalent.

I only made a passing comment that it would be nice if UK increased the state pension. I did not intend to start a debate.

bobd22

Assuming at State pension age you will be on the S1 healthcare system you won't get free prescriptions in Spain but they will be greatly reduced. Also you can at age 65 get the over 65 card free of charge which gives you half price bus fares plus discounts on other things. As for in the UK pensioners getting help with utilities ? It all depends on which pension one is on and what ones circumstances are in particular savings. I have a close relative who lives on her own on the old type state pension. She gets in pension less than the new single tier pension. As she is on the old style pension she should be able to get pension credit to at least bring her up to same level as single tier pension. If one is on pension credit then yes you get other assistance with council tax etc. However as she has her own house and some savings which she uses to maintain her house having downsized after divorce some years ago, she can not get any pension credit or other assistance. She actually lives on what is classed as below the minimum UK income level but is in a catch 22 situation. It would seem in the UK that those that fail through life to prepare for retirement never save, spend whatever money they get are looked after and those that try and provide for their retirement but are less than well off fall by the wayside.

bobd22

I don't understand why your tax in Spain will as you say be so much higher than it would be in the UK? Myself get my main pension income from government pensions which I pay tax on to the UK. My state pension and savings interest etc I declare and pay tax to Spain, telling them what I have government pension and have paid UK tax on. My Spanish tax bill on state pension and savings interest etc is way less than I would pay to UK if my state pension was added to my UK tax.

Lynn R

The difference between your situation and mine is that your main pension income is from Government pensions, and mine is not. I do get a a Civil Service pension, which I declare as exempt income in Spain - but it is very small, less than 20% of my main pension which is a final salary one from a former employer's scheme, but does not qualify as a Crown pension. Therefore, when my state pension gets added to that as taxable income in Spain, my tax bill will shoot up because, as I said, I will no longer be eligible for the low income tax allowance which I do benefit from at the moment, although not the full amount. I will then only have tax allowances of €8,700 to set against my taxable income in Spain (€6,700 basic personal allowance for someone aged 65, plus €2k general allowance against earned income). It would be better for me if the pension situation was the other way around, but alas it is not so I shall have to grit my teeth and pay up!

Lynn R

Yes, certainly we get discounts on things like bus travel and prescriptions here - but they are not FREE as they are in the UK. When I mentioned assistance with domestic energy costs I was referring to the WFA which all pensioner households get in the UK, regardless of their income levels.

My aunt, who died last year aged 95, was on Pension Credit for many years as she had had to give up her job to care for her father and because of that had not been able to make enough NI contributions to qualify for a State Pension. She got the minimum income guarantee, was exempt from paying Council Tax, got the higher rate of WFA and also got an additional Warm Front discount on her electricity bill, free prescriptions, free bus travel for as long as she was still able to get around, a free TV licence which I know pensioners on Pension Credit still get, free (basic) hearing aids and free (basic) spectacles plus exemption from NHS dental charges. She owned her own home because she inherited it from my grandfather, but if she had needed to rent, would have been entitled to Housing Benefit.

I agree, the pensioners on the old state pension level who were worst off were those who had a small private pension or savings which took them just over the level needed to qualify for Pension Credit, so weren't eligible for all those additional benefits.

bobd22

Lynn I consider myself lucky the way it has worked out for me. The tax free allowance in Spain for yourself unfortunately is less than UK tax free allowance as you say. I do lose a chunk of my UK state pension because of my government pension due to the newish single tier pension rules , as I was unknowingly contracted out they deduct £38 per week from the full rate. It is what it is and it all helps and nice to get paid for doing nothing.

missile

The Facts

• The UK has the worst state pension in the developed world- in 2016 it was only worth 29% of average income.
• The EU average is 70.5% meaning that UK pensions receive more than two times less than comparable countries.
• The only country to receive less is South Africa, where state pension equals 17.1% of average incomes. Considering that South Africa has the highest rates of inequality in the world and more than half the population is living in poverty, it is hardly a nation to benchmark against.

bobd22

Yes in the UK if you can get on pension credit or any form of benefit when retired you can get many things free. Unfortunately if you have tried to put something away for a rainy day and are honest they say tough luck. I have read that one can buy things rather than have savings so say if you are into cars or motorbikes you could buy a classic vehicle as an investment or jewelry or some other thing that would appreciate in value but they don't or can't include such things in your wealth , which they do with savings. Not sure if that's true anymore. I know once one passes on and you have been on benefit they check before allowing inheritance. My brother passed away during the covid period and they are recovering quite a large amount of money before his children can inherit . They say he shouldn't have had certain benefits due to savings he had even though he had proper assistance to complete his claims due to limited mental capacity.

missile

I doubt anyone who qualifies for Housing Benefit could afford to buy a classic car.
If you qualify for Pension Credit it would top up your income to a maximum weekly income to £177.10. If you have more than £10,000 savings, pension credit is reduced.

Lynn R

They do indeed check. My aunt had been on what they called a "non-assessed period" meaning she didn't have to notify the DWP if her savings went over the allowed amount, and when she died her bank account had mounted up because she spent very little especially during the last years of her life when she was housebound. We did have to provide the DWP with full details (indeed HMRC notify them when you submit the inheritance tax declaration to them) and they subsequently confirmed that they did not require any money to be paid back. They do advise the executor(s) not to distribute the estate until such confirmation has been received, though.

Lynn R

I would be in the same position due to having been contracted out, but last year I paid some years of additional Class 3 voluntary contributions to boost my state pension.

bobd22

​​​​​​Yes I actually have 44 years contributions so I didn't see much point in paying even more years of contributions. My problem was I joined up at 18 and was in military and police service until retirement. My government pension more than makes up for what I lose.