CENTRELINK AGE PENSION ELIGIBILITY FOR UK EXPATS?

[surfersj]

I have worked for almost 50 years in the UK paying NI and retired to Australia and you think it’s fine that I don’t ever get an annual increase but it’s ok for retirees going to Spain or the USA

[LindaH27]

1 minute ago, Tulip1 said:

There is something about when you opt out of serps you get less state pension/it effects it in some way.  I’m not sure exactly what but there is definitely something like you can potentially get less (which would perhaps fit with needing more years to get the same) 

Yes if you opt out of SERPS by contracting out you lose some of your Additional Pension but not the state pension itself. The reason being that you’ve paid less towards additional pension by paying into a private pension instead. 

[ramot]

44 minutes ago, surfersj said:

I have worked for almost 50 years in the UK paying NI and retired to Australia and you think it’s fine that I don’t ever get an annual increase but it’s ok for retirees going to Spain or the USA

Sadly the UK pension is frozen in many countries and many of them are commonwealth countries.  British pensions in Australia have been trying hard to get this changed, you might like to join. There was a famous case bought by a South African lady Annette Carson? I can’t remember how high it went, possibly to the High Court? but it failed. You are not alone in being upset, we are in the same position, but we did know the pension was frozen when we made the decision to move here, and there was almost no likelihood of that ever changing. Would be nice though.

Edited April 5, 2021 by ramot

[Marisawright]

58 minutes ago, surfersj said:

I have worked for almost 50 years in the UK paying NI and retired to Australia and you think it’s fine that I don’t ever get an annual increase but it’s ok for retirees going to Spain or the USA

Pensioners in Spain get the increases because the British and Spanish governments agreed a reciprocal deal to honour each other's pension obligations.  The same applies in other countries where a deal has been made. 

However many countries, including Australia and Canada, do not have a deal with the UK.  If there's no deal, then the normal rule is that once you move to another country, you can't go on collecting welfare benefits from your old country. The pension is a welfare benefit. So actually, we're lucky that we get the British pension at all.   If an Australian moves to the UK before they retire, they never get an Australian pension, ever.

The real problem is that for years, the British public were told that their NI contributions went towards their pensions when in fact, they never did.  So we all grew up with the idea that we'd paid for our pension and therefore we had an absolute right to get it, when in fact that was never the case at all.  It's a rude awakening.

Edited April 5, 2021 by Marisawright

[LindaH27]

34 minutes ago, Marisawright said:

Pensioners in Spain get the increases because the British and Spanish governments agreed a reciprocal deal to honour each other's pension obligations.  The same applies in other countries where a deal has been made. 

However many countries, including Australia and Canada, do not have a deal with the UK.  If there's no deal, then the normal rule is that once you move to another country, you can't go on collecting welfare benefits from your old country. The pension is a welfare benefit. So actually, we're lucky that we get the British pension at all.   If an Australian moves to the UK before they retire, they never get an Australian pension, ever.

The real problem is that for years, the British public were told that their NI contributions went towards their pensions when in fact, they never did.  So we all grew up with the idea that we'd paid for our pension and therefore we had an absolute right to get it, when in fact that was never the case at all.  It's a rude awakening.

Yes that’s correct. Your national insurance contributions do not go into a specific “pot” that is yours but a general Pot for everybody. I quite often say that when I was working I paid my parents pensions and now I’m retired my children are paying mine! 
Also to be fair UK is generous allowing its expats to still contribute towards an increased pension which will eventually more than offset their contributions   - I don’t think an Australian living in UK is allowed to pay voluntary contributions to their superannuation - which is in effect their “pension”. The aged pension is Australia is far more of a welfare benefit snd not universally paid to all its pensioners. 

[Wanderer Returns]

2 hours ago, LindaH27 said:

Not sure why you think you need 37 years? According to government site it says 35

I don't think that - I know that! The number of years for a full UK state pension can vary depending on the type of (class) contributions you've made, and whether you opted out of SERPS or not. Yes, it's most likely to be 35 years, but it depends on your personal circumstances. You can find out for certain by giving the DoWP a call.

[Wanderer Returns]

2 hours ago, surfersj said:

I have worked for almost 50 years in the UK paying NI and retired to Australia and you think it’s fine that I don’t ever get an annual increase but it’s ok for retirees going to Spain or the USA

No, I think it's wrong too, but at your age I certainly wouldn't be worrying about it. Enjoy your retirement in the sun - you're one of the lucky ones! 

[surfersj]

How true .  Thought it was a two year wait when we applied but took four years and seemed like an eternity.  However now we are here enjoying the lifestyle and climate but more important being near the grandchildren.   Glad we applied when we did.  Was going to hold off but now seeing the current wait time we are so lucky.  

[Tulip1]

3 hours ago, LindaH27 said:

Yes if you opt out of SERPS by contracting out you lose some of your Additional Pension but not the state pension itself. The reason being that you’ve paid less towards additional pension by paying into a private pension instead. 

That makes sense. I think there’s something about final salary pensions too where many employees weren’t aware it opted them out or something. It’s not me so I know little about it but I remember years ago someone talking about it and it was to do with them being in a final salary pension. 

[newjez]

8 hours ago, LindaH27 said:

Not sure why you think you need 37 years? According to government site it says 35

 

The number of years you need in the UK is person specific. You only really know how many years you need by contacting the department of work and pensions. I'm fully paid up and I have much less than 35 years.

[newjez]

6 hours ago, LindaH27 said:

Yes that’s correct. Your national insurance contributions do not go into a specific “pot” that is yours but a general Pot for everybody. I quite often say that when I was working I paid my parents pensions and now I’m retired my children are paying mine! 
Also to be fair UK is generous allowing its expats to still contribute towards an increased pension which will eventually more than offset their contributions   - I don’t think an Australian living in UK is allowed to pay voluntary contributions to their superannuation - which is in effect their “pension”. The aged pension is Australia is far more of a welfare benefit snd not universally paid to all its pensioners. 

I can pay money into my super fund (an Aussie living in the UK), but there is no benefit for doing so.

[Wanderer Returns]

12 hours ago, LindaH27 said:

Yes if you opt out of SERPS by contracting out you lose some of your Additional Pension but not the state pension itself. The reason being that you’ve paid less towards additional pension by paying into a private pension instead. 

That's exactly right - you can still get a full state pension - but you need to make more contributions if you opted out of SERPS. In my case it's 37 years, not 35.

[Parley]

11 hours ago, LindaH27 said:

The aged pension is Australia is far more of a welfare benefit snd not universally paid to all its pensioners. 

There is an assets test and an income test. The family home is excluded from the assets test and a homeowner couple can have up to $401K of other assets or a single $268K of assets to get the full pension.

Even if you can get a part pension in Australia it is valuable as you get the pensioner concession card which gives you discounts on electricity, gas and water as well as cheap prescriptions.

https://www.servicesaustralia.gov.au/individuals/services/centrelink/age-pension/who-can-get-it/assets-test

 

It is more accurate to say the pension is not universally paid to all its retirees. With superannuation in place now for a long time, many retirees will have large super balances and not need a government pension.
I don't expect to receive any pension when I retire but I have been paying into Super for nearly all my working life, as a salary sacrifice.

Edited April 5, 2021 by Parley

[LindaH27]

7 hours ago, Wanderer Returns said:

That's exactly right - you can still get a full state pension - but you need to make more contributions if you opted out of SERPS. In my case it's 37 years, not 35.

That’s why I was confused - under  the old state pension (pre 2016) you simply needed enough years ( 30 years in my case) -even if you were contracted out - to get the full pension. It wasn’t as much as the new pension is though but it did mean you only needed  a much shorter working life, which helped a lot of women who had interrupted careers with children etc. 

[LindaH27]

7 hours ago, Parley said:

There is an assets test and an income test. The family home is excluded from the assets test and a homeowner couple can have up to $401K of other assets or a single $268K of assets to get the full pension.

Even if you can get a part pension in Australia it is valuable as you get the pensioner concession card which gives you discounts on electricity, gas and water as well as cheap prescriptions.

https://www.servicesaustralia.gov.au/individuals/services/centrelink/age-pension/who-can-get-it/assets-test

 

It is more accurate to say the pension is not universally paid to all its retirees. With superannuation in place now for a long time, many retirees will have large super balances and not need a government pension.
I don't expect to receive any pension when I retire but I have been paying into Super for nearly all my working life, as a salary sacrifice.

For UK retirees on 143  there is still the requirement that they wait 10 years before they are eligible to claim any Australian benefit. 

[Wanderer Returns]

4 hours ago, LindaH27 said:

That’s why I was confused - under  the old state pension (pre 2016) you simply needed enough years ( 30 years in my case) -even if you were contracted out - to get the full pension. It wasn’t as much as the new pension is though but it did mean you only needed a much shorter working life, which helped a lot of women who had interrupted careers with children etc. 

The old state pension was pretty straightforward - 30 years, job done. When the UK government introduced the new state pension they tried to sugar-coat the fact that you'd need to work an extra 5 years by increasing the amount you'd receive on retirement, but really it was a much-needed adjustment to the paltry sum they'd been paying for decades. Clearly they'd crunched the numbers and realized a lot of people wouldn't manage the full 35 years, so it was going to save them billions in the long run.

I did some basic calculations a while back and if I was just relying on the Australian age pension and a 'top up' from the UK state pension, then it didn't really matter if I hadn't made the full UK contributions. You can only earn a small amount each week before Centrelink significantly starts reducing the age pension you receive. They take into consideration you partner's income too. Then there's the fact that your UK pension is frozen on retirement, and you'll also need to live a certain number of years after retirement age to recoup the cost of any voluntary contributions made.

[JetBlast]

1 hour ago, Wanderer Returns said:

you'll also need to live a certain number of years after retirement age to recoup the cost of any voluntary contributions made.

I have just calculated mine. It would take less than 12 months to break even for the voluntary contributions. I didn't take inflation into account.

[Wanderer Returns]

13 hours ago, JetBlast said:

I have just calculated mine. It would take less than 12 months to break even for the voluntary contributions. I didn't take inflation into account.

That sounds good... almost too good. When I did the same calculation, it worked out at 2-3 years to recoup mine - and that was assuming I was still living in the UK (and not claiming the Australian Age Pension).

[BacktoDemocracy]

On 05/04/2021 at 10:16, Wanderer Returns said:

That's what I used to think, but it's not correct. I opted out of SERPS back in the 90s and now I need 37 years for a full UK state pension (I currently have 26). You can also need as little as 30 years depending on the type (class?) of contributions you've been making. I believe that was the case for @Lavers when he asked this question some time ago.

They say you can only back-pay 6-7 years, but again, it depends on your circumstances. If I log into my UK Government Gateway account I can see that I can still pay up tax years more than 10 years ago, if I wish. I've decided I'm not going to pay any more until I'm almost 67, and then pay as many years as I can then. If it's still 6-7 years then I will have a full UK state pension (or something close to that). It would be a tragedy to pay it now and then die in the next 14 years - my wife would never forgive me!

 

 

The years that you can see 10 years ago where you can still pay into them , I believe, are years where the number of weeks paid are insufficient to make it a qualifying year and NI will allow you to make payments to top up that year only, that is based on our recent experience with my OHs account.

I would be very careful about making any long term decisions based on  present regulations, the UK government tinkers around with pension regs and NI contributions, lessening one side, increasing the other, at the present moment the cost of contributions is very low if you are out of the country but there seems to be plans afoot to make it a universal level contribution, we were told this when we topped up my OHs years from when we were in Australia . Also are you paying NI contributions for your wife in order to establish a pension for her in her own right, as again , from my own sketchy knowledge, if you died your wife's entitlements based on your contributions may be very limited.

About the best decision I made was to continue paying NI contributions whilst in Australia when they were a few pounds per week as I have recovered all of that and more with a full index linked pension having returned 6 years ago 

[JetBlast]

5 hours ago, Wanderer Returns said:

That sounds good... almost too good. When I did the same calculation, it worked out at 2-3 years to recoup mine - and that was assuming I was still living in the UK (and not claiming the Australian Age Pension).

I suppose it can also depend on how many contributions you need to meet the minimum number of years. I think it was 35 years (off top of my head).

[Marisawright]

6 hours ago, Wanderer Returns said:

That sounds good... almost too good. When I did the same calculation, it worked out at 2-3 years to recoup mine - and that was assuming I was still living in the UK (and not claiming the Australian Age Pension).

It's bound to vary, depending on how many years you've already contributed and how far you are from retirement age.  I'm already at retirement age but there's a grace period during which you can contribute the years you missed.  My calculations showed that I'll be in profit after 5 years.   That's not a full pension, though, because even after my extra payments, I'm only at around 25 years.

Of course I'll be in my 70s by then, so it's quite possible I won''t live that long.  However, paying the extra cost only a few thousand which I really won't miss.  And if I live into my 80s or 90s I'll be quids in, even at the frozen rate.

Edited April 7, 2021 by Marisawright