Uk state pension forecast

[rammygirl]

Has anyone managed to get this online? I get to the stage where it needs to verify my ID but then gives me three options, I have a uk passport but can’t do the other two as I don’t have a N. Ireland driving licence or a uk address for credit check.  It then says I can go back and select different questions but it just gives me the same three options.  
 

I will ring them but if anyone has managed a work around it will help. Don’t want to resort to snail mail if. I can help it. 

[NicF]

1 minute ago, rammygirl said:

Has anyone managed to get this online? I get to the stage where it needs to verify my ID but then gives me three options, I have a uk passport but can’t do the other two as I don’t have a N. Ireland driving licence or a uk address for credit check.  It then says I can go back and select different questions but it just gives me the same three options.  
 

I will ring them but if anyone has managed a work around it will help. Don’t want to resort to snail mail if. I can help it. 

I did.  If I remember right I put in my last UK address for the credit check stage.  

[rammygirl]

Thanks that did the trick!  Looks like it might be worth paying to make up my missing 5 years. I will get it back in three.

[Wanderer Returns]

1 hour ago, rammygirl said:

Thanks that did the trick!  Looks like it might be worth paying to make up my missing 5 years. I will get it back in three.

You should also consider how much tax you will pay on the additional pension income you'll receive, as you may find it takes considerably longer than 3 years to recoup the cost of the 5 years you intend to pay up. Not to mention there'll be no cost-of-living increments, as I'm sure you're aware.

[rammygirl]

15 minutes ago, Wanderer Returns said:

You should also consider how much tax you will pay on the additional pension income you'll receive, as you may find it takes considerably longer than 3 years to recoup the cost of the 5 years you intend to pay up. Not to mention there'll be no cost-of-living increments, as I'm sure you're aware.

Yes we are getting pension advice that is why I needed the forecast. The advisor is taking all our uk and Aus assets and income into account. 

[Marisawright]

32 minutes ago, Wanderer Returns said:

You should also consider how much tax you will pay on the additional pension income you'll receive, as you may find it takes considerably longer than 3 years to recoup the cost of the 5 years you intend to pay up. Not to mention there'll be no cost-of-living increments, as I'm sure you're aware.

However, when you consider you're going to keep receiving it for the rest of your life, and that your income is going to drop as you age, it's a bit of a no-brainer IMO.

[Parley]

2 hours ago, Marisawright said:

However, when you consider you're going to keep receiving it for the rest of your life, and that your income is going to drop as you age, it's a bit of a no-brainer IMO.

How much will it cost me if I've never worked there ? 

[Marisawright]

40 minutes ago, Parley said:

How much will it cost me if I've never worked there ? 

Sorry Parley, there’s a minimum number of years you must have worked there to qualify 

[Wanderer Returns]

53 minutes ago, Marisawright said:

Sorry Parley, there’s a minimum number of years you must have worked there to qualify 

It's 10 - unless they've changed the rules.

[Wanderer Returns]

4 hours ago, Marisawright said:

However, when you consider you're going to keep receiving it for the rest of your life, and that your income is going to drop as you age, it's a bit of a no-brainer IMO.

I don't think it's as clear cut as that. If you have little other income, then when it runs out you'll be entitled to the Australian Age Pension. This will be reduced accordingly if you receive an income from the UK state pension. If you're confident your other pensions will last until the end of your life, then it's probably worth paying up those extra years - assuming you're in good health. It's also worth remembering that the money you need to pay for those contributions (which are now getting quite expensive) wouldn't be doing nothing - it could also be invested, creating a return.

[rammygirl]

47 minutes ago, Wanderer Returns said:

I don't think it's as clear cut as that. If you have little other income, then when it runs out you'll be entitled to the Australian Age Pension. This will be reduced accordingly if you receive an income from the UK state pension. If you're confident your other pensions will last until the end of your life, then it's probably worth paying up those extra years - assuming you're in good health. It's also worth remembering that the money you need to pay for those contributions (which are now getting quite expensive) wouldn't be doing nothing - it could also be invested, creating a return.

Yes it may be better putting that money into super. At least then it will be tax free when you take it out. There are so many things to consider. That is why we are paying for advice.  We have a complicated asset base here and in the uk. Hopefully the advice will more than pay for itself in tax savings. 

[Marisawright]

42 minutes ago, Wanderer Returns said:

I don't think it's as clear cut as that. If you have little other income, then when it runs out you'll be entitled to the Australian Age Pension. This will be reduced accordingly if you receive an income from the UK state pension

I think a lot of people are not at all confident their pensions will last till the end of their life.   Maybe there are still pensions in the UK that guarantee to pay you a pension for life.  However in Australia, you retire with a pot of savings in your super fund and it's entirely up to you to make it last till you die. You can buy an annuity but they're a joke. 

I guess for people who get a private pension from the UK, where they may not get a choice how much they get each year, tax could be an issue.  However for an Australian, there doesn't need to be any tax implication - you just reduce the amount you're taking from your pension fund to compensate.  Which means your pension fund lasts longer. 

[ramot]

14 minutes ago, Marisawright said:

I think a lot of people are not at all confident their pensions will last till the end of their life.   Maybe there are still pensions in the UK that guarantee to pay you a pension for life.  However in Australia, you retire with a pot of savings in your super fund and it's entirely up to you to make it last till you die. You can buy an annuity but they're a joke. 

I guess for people who get a private pension from the UK, where they may not get a choice how much they get each year, tax could be an issue.  However for an Australian, there doesn't need to be any tax implication - you just reduce the amount you're taking from your pension fund to compensate.  Which means your pension fund lasts longer. 

my husbands pensions are guaranteed for life and index linked. I have no idea if Rules for pensions might have changed, or what the norm is nowadays. This is the first year we have paid tax in Australia, it’s been interesting trying to sort it all out, hopefully had good agents, looks to be fairly similar to before. 

[Marisawright]

54 minutes ago, ramot said:

my husbands pensions are guaranteed for life and index linked. I have no idea if Rules for pensions might have changed, or what the norm is nowadays.

That's what most pensions used to be like.   I remember my dad's pension was like that too.  It's not so common these days and I think it's disappeared almost completely in Australia.  They became too expensive for employers, because people are living too long.  

When that kind of pension was first invented, people would work for for 45 years and then they'd be lucky to live long enough to collect their pension for 5 or 10 years.  Now, people work for 40 years and then they could potentially collect a pension for another 40 years. You can see how that's completely uneconomic for the pension fund.

Under the superannuation system in Australia, both the employer and the employee pay money into a super fund while the employee is working.  That creates a nest egg which the employee can access when they reach retirement age, but then it's up to the employee to decide how much to take as a monthly pension, and it's a juggling act trying to draw enough to live on, while working out how to make it last until you die. 

[RandL]

it is worth mentioning that once  you receive your UK pension in Australia it will no longer increase in amount  and will remain at the amount of your first payment.

the annual increase that would be applied in the UK ( inflation/retail index ...  triple lock) does not apply  if received in Australia

UK and Australia dropped their social security agreement in 2001 

[ramot]

6 minutes ago, RandL said:

it is worth mentioning that once  you receive your UK pension in Australia it will no longer increase in amount  and will remain at the amount of your first payment.

the annual increase that would be applied in the UK ( inflation/retail index ...  triple lock) does not apply  if received in Australia

UK and Australia dropped their social security agreement in 2001 

Unless things have changed in the last 2 years that we have been unable to go to UK.

If you go to UK on holiday, you inform the relevant department the dates you are there and your state pension is increased to the amount it would have been if not frozen during your visit.  It the reverts back to the frozen amount on your return to Australia! The extra is paid when you have returned. Previously we went back for 3 months most years and made sure we got every penny.

[Wanderer Returns]

9 hours ago, RandL said:

it is worth mentioning that once  you receive your UK pension in Australia it will no longer increase in amount  and will remain at the amount of your first payment.

the annual increase that would be applied in the UK ( inflation/retail index ...  triple lock) does not apply  if received in Australia

UK and Australia dropped their social security agreement in 2001 

 

9 hours ago, ramot said:

Unless things have changed in the last 2 years that we have been unable to go to UK.

If you go to UK on holiday, you inform the relevant department the dates you are there and your state pension is increased to the amount it would have been if not frozen during your visit.  It the reverts back to the frozen amount on your return to Australia! The extra is paid when you have returned. Previously we went back for 3 months most years and made sure we got every penny.

I think it will only be a matter of time before the law is changed so that you need to be resident in the UK to receive the state pension, regardless of the NI contributions you've paid. THis is already true of Australians who choose to live overseas. It probably won't affect those who are already in receipt of the state pension, but anyone who isn't near the finish line should bear it in mind. That's why I'm not paying up any more years until I reach 66, and I know I'm going to get it within 12 months. The UK government have just raised NI by 1.25%, and people over there aren't happy. They are certainly going to be looking at other ways to reduce the cost of pensions, and this way would be most acceptable as it wouldn't affect the majority of Brits.

[Wanderer Returns]

10 hours ago, Marisawright said:

That's what most pensions used to be like.   I remember my dad's pension was like that too.  It's not so common these days and I think it's disappeared almost completely in Australia.  They became too expensive for employers, because people are living too long.  

When that kind of pension was first invented, people would work for for 45 years and then they'd be lucky to live long enough to collect their pension for 5 or 10 years.  Now, people work for 40 years and then they could potentially collect a pension for another 40 years. You can see how that's completely uneconomic for the pension fund.

Under the superannuation system in Australia, both the employer and the employee pay money into a super fund while the employee is working.  That creates a nest egg which the employee can access when they reach retirement age, but then it's up to the employee to decide how much to take as a monthly pension, and it's a juggling act trying to draw enough to live on, while working out how to make it last until you die. 

They're called Defined Benefit schemes, or more affectionately 'gold-plated pensions'! Queensland Government phased theirs out in 2008. Some of my older colleagues were in it and without exception, they all couldn't wait to retire. The guaranteed income for life is not to be sniffed at, but there are disadvantages in that employers have kept reducing the amount of the defined benefits (or the fund will run out of money), so people in them need to work longer to get a decent pension. This applies to the UK teachers' pension; if you retire at 55 you are heavily penalized compared with retiring at 60. It often keeps people in jobs they loathe, so they are unhappier - and unhealthier - by the time they retire. Also, when you die your spouse may be entitled to a percentage of the pension (usually half), but there's no pot of money to leave as an inheritance. They are great if you live a long time, but if you die of a heart attack at 69 like my father did, then you definitely won't get your money's worth.

[Marisawright]

1 hour ago, Wanderer Returns said:

 

I think it will only be a matter of time before the law is changed so that you need to be resident in the UK to receive the state pension, regardless of the NI contributions you've paid. THis is already true of Australians who choose to live overseas.

That's not entirely true.  It's true of Australians who leave Australia before retirement age.  However, if you stay in Australia until you reach retirement age and THEN leave, you continue to receive the pension.  

The other point to remember is that the Australian pension is a welfare benefit for those that need it, like the dole.  Before the advent of superannuation, that fact was much less obvious, but it's always been that way. That's why people living permanently overseas aren't entitled, because the assumption is that as residents of that other country, they should be able to rely on the welfare system of their adopted country.

Whereas in the UK, it has always been presented as a right for everyone - you pay your NI, you get your pension.  So the decision to take it away from people would be more difficult.

Edited September 20, 2021 by Marisawright

[Paul1Perth]

16 hours ago, Wanderer Returns said:

I don't think it's as clear cut as that. If you have little other income, then when it runs out you'll be entitled to the Australian Age Pension. This will be reduced accordingly if you receive an income from the UK state pension. If you're confident your other pensions will last until the end of your life, then it's probably worth paying up those extra years - assuming you're in good health. It's also worth remembering that the money you need to pay for those contributions (which are now getting quite expensive) wouldn't be doing nothing - it could also be invested, creating a return.

The exchange rate alone can make what seems like a no brainer into a bad investement.

I have a couple of income streams from private retirement funds, NCB and Ferranti,  on top of the UK pension and then my super from here. My wife has her NHS one coming in already, her super but will have to wait until she's 67 to get her British one.

If you have debts or a mortgage I reckon your money would be better used to pay that off first. We never bothered topping ours up but was pleasantly surprised what I get.

On top of that, if you're paying for advice that's a cost too that has to be taken into account.

You can do it yourself, lots of information out there. 

Edited September 21, 2021 by Paul1Perth

[Paul1Perth]

13 hours ago, Marisawright said:

That's what most pensions used to be like.   I remember my dad's pension was like that too.  It's not so common these days and I think it's disappeared almost completely in Australia.  They became too expensive for employers, because people are living too long.  

When that kind of pension was first invented, people would work for for 45 years and then they'd be lucky to live long enough to collect their pension for 5 or 10 years.  Now, people work for 40 years and then they could potentially collect a pension for another 40 years. You can see how that's completely uneconomic for the pension fund.

Under the superannuation system in Australia, both the employer and the employee pay money into a super fund while the employee is working.  That creates a nest egg which the employee can access when they reach retirement age, but then it's up to the employee to decide how much to take as a monthly pension, and it's a juggling act trying to draw enough to live on, while working out how to make it last until you die. 

The other option is get to the "sweet spot" where you are getting just enough income to be able to claim a full state pension from Aus.

There's other benefits that save a lot of money too. Seniors card, Commonwealth seniors health card. The 2nd one has lots of benefits but is assessed on income. I applied for it last year but my wife was still working. Now she's retired we should be able to get it.

Cheaper prescriptions, cheaper rates, water bills, gas, electricity. They assess you on your income from abroad though so if you have a good pension from the UK it could take you over the limit.

It's not so much a no brainer when you take everything into account.

[Paul1Perth]

2 hours ago, Wanderer Returns said:

They're called Defined Benefit schemes, or more affectionately 'gold-plated pensions'! Queensland Government phased theirs out in 2008. Some of my older colleagues were in it and without exception, they all couldn't wait to retire. The guaranteed income for life is not to be sniffed at, but there are disadvantages in that employers have kept reducing the amount of the defined benefits (or the fund will run out of money), so people in them need to work longer to get a decent pension. This applies to the UK teachers' pension; if you retire at 55 you are heavily penalized compared with retiring at 60. It often keeps people in jobs they loathe, so they are unhappier - and unhealthier - by the time they retire. Also, when you die your spouse may be entitled to a percentage of the pension (usually half), but there's no pot of money to leave as an inheritance. They are great if you live a long time, but if you die of a heart attack at 69 like my father did, then you definitely won't get your money's worth.

My friend retired from local government on a defined scheme a couple of years ago. I think it was based on his final years salary, so he's laughing. 

He was offered redundancy about 5 years ago and knocked it back. When he told me and another friend what he'd done we gave him heaps. Both of us said he was crazy. Lucky for him he got the same opportunity about a year later and took it. Couldn't believe he was still considering not taking it again. We had to give him a good talking to.

[Parley]

16 hours ago, Marisawright said:

I think a lot of people are not at all confident their pensions will last till the end of their life.   Maybe there are still pensions in the UK that guarantee to pay you a pension for life.  However in Australia, you retire with a pot of savings in your super fund and it's entirely up to you to make it last till you die. You can buy an annuity but they're a joke. 

I guess for people who get a private pension from the UK, where they may not get a choice how much they get each year, tax could be an issue.  However for an Australian, there doesn't need to be any tax implication - you just reduce the amount you're taking from your pension fund to compensate.  Which means your pension fund lasts longer. 

That is why we have the Australian Age Pension as a safety net.

[Parley]

Defined Benefit Schemes started to be phased out during the late 1980s. The main problem with them was that all the risk was on the employer. If the scheme said the employee got 5 times their finishing salary as a superannuation benefit (for example) based on set contribution then the fund had to achieve the right rate of return to meet that goal. In a low growth environment that could be difficult to achieve.

Most employees probably ended up doing better after the switch to the accumulation funds. Each employee could decided how much they wanted to contribute and whether they wanted high growth if they were younger or more stable if they were older.

Politicians were an unusual case as they had very generous defined benefit schemes but most workers would be better off with accumulation schemes and being able to choose how their money is invested.

Edited September 21, 2021 by Parley

[Tulip1]

4 hours ago, Paul1Perth said:

My friend retired from local government on a defined scheme a couple of years ago. I think it was based on his final years salary, so he's laughing. 

He was offered redundancy about 5 years ago and knocked it back. When he told me and another friend what he'd done we gave him heaps. Both of us said he was crazy. Lucky for him he got the same opportunity about a year later and took it. Couldn't believe he was still considering not taking it again. We had to give him a good talking to.

I know someone who had a final salary pension and planned retiring at 60 as that was the ideal time to kick start it.  Four months before their 60th birthday they got offered redundancy and no surprise they took it.  Got three years salary as a payout when they were leaving anyway.  Very lucky.