branmin

What would be the easiest way to receive a UK State pension in the US without having to pay Bank wire charges each month. Any suggestions for those here already receiving a pension.?
Thx.

mikelincs

Just get the DWP to pay direct into your US bank, no charges and the best exchange rate.

Nutmegger

Seconded.

Pulaski

This. .... The DWP has an arrangement with, IIRC, Citibank, to make payments of British state pensions directly into US bank accounts of British pensioners in the US. The payments arrive free of charges and at something very close to the mid rate (the figure usually quoted in the media as "the exchange rate", which is actually half way between the rate for a very large buy and a very large sell of the same currency, hence "the mid rate"), which in practice is impossible for an individual to ever achieve.

branmin

sorry for what may appear to be deemed thick............
Mikelincs......that's what I was going to do but my bank charges for overseas wire charges?

Pulaski, (does IIRC mean "if i recall correctly", thought it was a Bank:-) Same as above, just wondering who has decided they remain free of charges and convincing my bank that they can't charge me wire fees and at the rate of $40.00 each time would be ridiculous.
Thx and appreciate as always your replies.

theOAP

Pulaski mentioned Citi. DWP in the UK pays £s into Citi (usually Ireland) for exchange into $s. Citi gives the exchange the favourable rate. Funds are now in $s. Citi sends funds to your bank account in dollars. No exchange rate.

lansbury

They don't send it by wire, hence no wire charges. It is just a straight ACH transfer to your account which US banks don't charge for.

The downside to having DWP send it to your US account is you have no control over the rate. I have it paid into my UK account. If the rate is bad I don't transfer it, or my other UK pensions. If I like the rate I transfer it. These days you should be able to get just as good a rate as Citi give. It really depends on convenience and if you don't need the money every month. The other advantage to using a UK bank account is if you visit the UK regularly. There is no loss having it sent to the US, and then changing back to sterling for use in the UK.

I use Transferwise to do the exchange for me. The rate I get is the spot rate less 0.5% fee. They send by ACH and there is no receiving charge levied by my bank.

MidAtlantic

I don't think the funds are wired.

branmin

Thx all................now understand fully. As always, amazing board, amazing people and lightning quick answers. I probably should start a new thread but whilst on the subject here is what I am doing.

Pensionable age now for US and UK State pensions and looking at all my options including taking one now and deferring the other or taking both now. I know what is involved here in the States and my break-even point if I deferred would be around 78-80. Just spoke to the International pension people in the UK and they are sending me a 5 year forecast for my wife and I.

But as it stands and supposing I take both now. US monthly $1694.00.
UK monthly(I have converted to dollars at a rate of 1.25) $1280.00.

WEP rules. Cannot quite work out how SS here will reduce my pension and based on the figures given, what it would likely be? Any help appreciated.

lansbury

How many years SS contributions have you made?

Here is the link to the online WEP calculator https://www.ssa.gov/planners/retire/anyPiaWepjs04.html

branmin

29 in UK
22 in US

lansbury

As a rough guide your SS will be reduced by 5% for each year of contributions less than 30 years. So in your case 40%. But there are other factors that come into play which may mean the reduction is less than that.

The online calculator is very accurate. It was $1 a month out when I worked out my wife's WEP to what she received when the SSA worked it out.

My off the top of my head calculation says 40% of your SS is $667, which is more than half your UK pension. Half your UK pension is $640 so that is the maximum amount your SS can be reduced by. But please use the online calculator to get an accurate amount, as anything to do with SS is never straightforward.

I take no responsibility for any shock induced by my rough calculations.

branmin

Thx..I thought they reduced my US pension as opposed to the UK one?

Which calculator did you use, they have two there(which you have to download and is more detailed I believe) and also did you use "today's dollars" or adjusted for inflation?

Used to shocks, part of life....again many thx.

Pulaski

There are multiple ways to move money between banks, and wires are by far the most expensive way, and in the 21st century there is no rational reason for that to be the case. The reason is purely historical - you pay a fee to send a wire, and a smaller, but still offensively large, fee to receive a wire. That's just how it works. .... Other transfers include such things as ACH (which are predominantly between US banks, but do get used in the UK), and BACS, which I think is predominant in the UK.

As long as the banks have been charging hefty fees for wires I can't see them being dropped, and therefore more and more people and businesses will simply use other methods of moving money so as to avoid the wire fees, and eventually wires may just fade out of use, replaced by cheaper alternatives.

branmin

So I used the calculator and it comes out at $802.00 per month but from where? US or UK? Surely thats not the net amount of both combined? Now I may have done this incorrectly as I used the monthly amount that both my wife and I would be getting. Also I paid in the US over 20 years and not 22.

getting ready for a shock................I hope not