The UK state pension income is able to be claimed by anyone who has a minimum of 10 years of National Insurance contributions and has reached the state pension age. This also applies to anyone who has retired abroad, but there are some changes that may affect this.
To claim the state pension abroad, you must be within 4 months of reaching the state pension age and also have between 10-35 years’ worth of National Insurance contributions before you can apply.
In order to claim the pension, you must contact the International Pension Centre (IPC) and complete an International Claim form.
If you don’t live abroad permanently then you must choose the country you wish to have the pension paid into, but you will not be able to have the state pension paid into more than 1 country.
Any eligible person can have their state pension paid into a bank account in the country they live in. To have the pension paid to a non-UK bank account, you will need an International Bank Account Number (IBAN), along with a Bank Identification Code (BIC) to receive your payment overseas.
You’ll be paid in the local currency so the amount you receive will be impacted by exchange rates, and you will have a choice over how frequently you are paid (either every 4 weeks or 13 weeks).
The state pension is guaranteed to increase every year under the triple lock system. The triple lock rules mean that the state pension will rises each year by the higher number of either 2.5%, UK wage growth, or inflation.*
It also applies to state pensions being claimed abroad, provided you live in one of the following:
*Please be aware that if you are not covered by the Withdrawal Agreement and you move to live in an EEA state or Switzerland from 1 January 2021, the rules on entitlement to UK benefits in these countries will depend on the outcome of negotiations with the EU and may change.
Those retiring to a country not included in this list, will not be entitled to the triple lock annual increases.
If you’re planning to retire abroad, you may also want to consider that you may still need to pay tax on your UK state pension if you live abroad, but are still classed as a UK resident for tax purposes. This means that you could end up paying tax twice – having your state pension taxed by both the country you live in and also the UK.
This article is based on current legislation and may change in the future.
This can be found on your payslip, P60 document or letters about tax, pensions or social benefits.
If you have (or have had) a pension that is described below then we can potentially carry-out a Pension HealthCheck.
Defined Contribution Pensions
These are ‘Pot of Money’ pensions where the benefits provided take into account the value of the fund at retirement. They can be personal pensions or Occupational Pensions. There are no guarantees as to what pension will be provided. This will be a reflection of contributions made and investment growth.
Defined Benefit Pensions
These offer the promise of a guaranteed pension at retirement which reflects the length of service with an employer. It will be based on either the Final Salary or Average Career Salary of the employee. Providing the company is still in existence, there is no investment risk for the pension receiver. This type of pension is becoming less frequent.
This is a generic term for pensions that are not workplace schemes.
Group Personal Pensions
Employer-sponsored schemes – each member has a personal pension plan, and their contract is with the pension provider. The employer’s role solely is to select the scheme provider, decide if there should be any restrictions on fund choices and take contributions from the employee’s pay and forward them with employer contributions to the pension provider.
A private pension arrangement or personal pension is taken out by a sole-trader or self-employed worker.
State Earnings Related Pension (formerly Graduated Pension and subsequently State 2nd Pension or S2P) was an additional element of State Pension for employees. The amount of pension was linked to the employee’s salary. SERPS was abolished in 2016 when the flat rate State Pension was introduced.
Private pensions are contracts between the pension member and an insurance company or another pension provider.
These are personal pensions where the member has a much wider choice of investments, including commercial property and single company shares.
Personal Pensions with a set of rules that impose amongst other things a maximum annual management charge (AMC), low minimum contribution levels (£20 per month) and an appropriate Default fund.
Private pension linked to an employer’s Defined Benefit Scheme but separate from the Scheme’s internal Additional Voluntary Contribution (AVC) arrangement – largely defunct since the rules were eased several years ago, allowing people to contribute to both personal and employment schemes as they wish.
Money Purchase Pensions
This is another name for Defined Contribution Pensions.
Unfortunately, we are unable to help clients who currently work for or have a pension from one of the following:
If you are unsure about the type of pension(s) you hold, please contact us on 0800 756 1288 or email email@example.com