UK pensions

[Jim P]

11 hours ago, partington said:

In short yes you can. You just need to either contact HMRC National Insurance Contributions and Employers Office after you retire and ask to pay Voluntary Class 3 contributions , for example by direct debit, and continue for four years, or, even more simply just wait until the four years are up and then send them a cheque stating your NI number, name and address, and contact details and what years you are paying for.

 

They will then just add this to your contributions and it should be reflected in your pension forecast almost immediately.   You have 10 years to do this in so there's no hurry. Currently you can pay for  any year up to six years after that year.

 

You can't just pretend to be self-employed  to pay a lower rate, as they will require some evidence.

 

Whether it's worth it or not depends on your circumstances and health. If you live four years after 66 you have made the money back, and each year you live after that you receive guaranteed index-linked income  above what you paid in for as long as you live. 

 

Four years more  NI contributions gets you £9,464 plus inflation more than you paid in if you live to 80. Very few investments will do that, guaranteed.

Thank you Partington and thank you for the calculation, that is good news as Im currently in excellent health but who knows the future. In fact I will probably only have about three and a half years to pay as I will be contributing to 2018 after April 5th so if I retire in October I will have 6 months contributions in the bag for this year.

[evadgib]

I couldnt find a suitable place for this where it would be seen so...

 

https://www.gov.uk/government/news/tick-the-gift-aid-box-on-donations-so-charities-dont-miss-out-on-600m-extra-funding

Edited March 19, 2018 by evadgib

[Oxx]

23 minutes ago, evadgib said:

https://www.gov.uk/government/news/tick-the-gift-aid-box-on-donations-so-charities-dont-miss-out-on-600m-extra-funding

 

For the charity to benefit, the donor must be a UK tax payer.  If not, HMRC can claw back the charity's tax benefit from the donor.

 

[theoldgit]

8 hours ago, evadgib said:

I couldnt find a suitable place for this where it would be seen so...

https://www.gov.uk/government/news/tick-the-gift-aid-box-on-donations-so-charities-dont-miss-out-on-600m-extra-funding

It's worth adding that if you're a higher rate taxpayer you should also advise the HMRC and they will alter your tax code to ensure you get relief on the excess.

[evadgib]

Of particular interest to anyone feeling the pinch:

https://www.gov.uk/government/news/one-million-people-lifted-out-of-absolute-poverty

[vogie]

How long would someone with a frozen pension have to live in the UK or a country like the Philipines for the pension to be permantely upgraded?

[nong38]

27 minutes ago, evadgib said:

Of particular interest to anyone feeling the pinch:

https://www.gov.uk/government/news/one-million-people-lifted-out-of-absolute-poverty

The average household takes home 494 pounds a week, but not pensioners and especially those who left the UK. Great news that million people have been taken out of poverty but no mention of the 500,000 ex pat pensioners heading in the other direction even though they are covered by the same DWP department. They perhaps print the truth, but just not all of it, just the sunnyside that makes thing look good.

[Rajab Al Zarahni]

29 minutes ago, vogie said:

How long would someone with a frozen pension have to live in the UK or a country like the Philipines for the pension to be permantely upgraded?

My understanding is that it would be paid at the unfrozen rate from the date of your arrival.

[vogie]

1 minute ago, Rajab Al Zarahni said:

My understanding is that it would be paid at the unfrozen rate from the date of your arrival.

Yes that is my understanding as well, but if I return to Thailand it would go down to the figure previously paid. I was wondering how long to stop in the UK for the upgrade to become permanent, even if I return to Thailand.

[Rajab Al Zarahni]

49 minutes ago, vogie said:

Yes that is my understanding as well, but if I return to Thailand it would go down to the figure previously paid. I was wondering how long to stop in the UK for the upgrade to become permanent, even if I return to Thailand.

I believe that the reversion rule would continue to apply however long you were out of Thailand.

[rockingrobin]

1 hour ago, vogie said:

Yes that is my understanding as well, but if I return to Thailand it would go down to the figure previously paid. I was wondering how long to stop in the UK for the upgrade to become permanent, even if I return to Thailand.

Looking at sections 20(3) and 20(4) of the 2014 Pension Act , it would appear that for the upgrade to be permanent , a person would have to be in the UK for a sufficient period to be classed as ordinarily resident.

Section 20(3) is about oversees resident in the UK , not UK residents, whilst 20(4) is about ceasing to be an oversees resident.

Edited March 22, 2018 by rockingrobin
clarification

[vogie]

7 minutes ago, rockingrobin said:

Looking at sections 20(3) and 20(4) of the 2014 Pension Act , it would appear that for the upgrade to be permanent , a person would have to be in the UK for a sufficient period to be classed as ordinarily resident.

Section 20(3) is about oversees resident in the UK , not UK residents, whilst 20(4) is about ceasing to be an oversees resident.

Thanks for that, but I suppose nobody knows what that "sufficient" period is.

[rockingrobin]

7 minutes ago, vogie said:

Thanks for that, but I suppose nobody knows what that "sufficient" period is.

According to the Act an oversees resident means somebody who is not ordinarily resident in GB or one of the territories. 

[vogie]

1 minute ago, rockingrobin said:

According to the Act an oversees resident means somebody who is not ordinarily resident in GB or one of the territories. 

But this brings me back to the question, how long does it take to become an ordinarily resident in the UK. Can it ever happen, have I burned all my bridges by living in Thailand for 5 years (previously 5 years in France also).

[rockingrobin]

49 minutes ago, vogie said:

But this brings me back to the question, how long does it take to become an ordinarily resident in the UK. Can it ever happen, have I burned all my bridges by living in Thailand for 5 years (previously 5 years in France also).

As far as I am aware  , the term ordinary residence has not been defined in UK statute. However the issue did arrive at the Lords in 1982 , when they was the final appeals court.

http://www.bailii.org/uk/cases/UKHL/1982/14.html

 

The words ^'ordinarily resident' mean that the person must be habitually and normally resident here, apart from temporary or occasional absences of long or short duration.

 

It is possible to become ordinarily resident on day one.

 

 

[nontabury]

3 hours ago, vogie said:

But this brings me back to the question, how long does it take to become an ordinarily resident in the UK. Can it ever happen, have I burned all my bridges by living in Thailand for 5 years (previously 5 years in France also).

I have recently returned to live in the U.K. after living in THAILAND for 20 yrs. My state pension was upgraded from day one from £99 to I think £125 a week. come April it will be £135 per week. This is the sort of increase, that discourages successive governments from paying the correct rate to 500,000 British pensioners, who happen to reside in certain countries. It will now be interesting to see if those pensioners, who now live in the E.U. will also have their pensions frozen.

 Regarding pensioners who Return to live in THAILAND, it's my understanding, that should they return within two years, their pension will revert to their previous frozen pension rate. If they return after two years, their pension will be frozen, at the rate, applicable on the date of their return.      

[Rajab Al Zarahni]

1 hour ago, nontabury said:

I have recently returned to live in the U.K. after living in THAILAND for 20 yrs. My state pension was upgraded from day one from £99 to I think £125 a week. come April it will be £135 per week. This is the sort of increase, that discourages successive governments from paying the correct rate to 500,000 British pensioners, who happen to reside in certain countries. It will now be interesting to see if those pensioners, who now live in the E.U. will also have their pensions frozen.

 Regarding pensioners who Return to live in THAILAND, it's my understanding, that should they return within two years, their pension will revert to their previous frozen pension rate. If they return after two years, their pension will be frozen, at the rate, applicable on the date of their return.      

Do you have a link that would evidence the 2 year rule ?

[nontabury]

36 minutes ago, Rajab Al Zarahni said:

Do you have a link that would evidence the 2 year rule ?

No, I knew of this rule, about two years ago, I cannot remember from where I knew it, Sorry!

[p414]

phone the pensions service.They are very helpful but make sure that what you tell them re your pension is correct.

Last time I spoke to a manager of the pension service I was informed that those that are claiming for a thai wife' will have this part of their pension stopped in 2020.That was 3 years ago.

 

[sumrit]

On 23/03/2018 at 2:47 AM, nontabury said:

I have recently returned to live in the U.K. after living in THAILAND for 20 yrs. My state pension was upgraded from day one from £99 to I think £125 a week. come April it will be £135 per week. This is the sort of increase, that discourages successive governments from paying the correct rate to 500,000 British pensioners, who happen to reside in certain countries. It will now be interesting to see if those pensioners, who now live in the E.U. will also have their pensions frozen.

 Regarding pensioners who Return to live in THAILAND, it's my understanding, that should they return within two years, their pension will revert to their previous frozen pension rate. If they return after two years, their pension will be frozen, at the rate, applicable on the date of their return.      

As UK state pensions are so low this is also the sort of weekly increase that encourages some to continue to keep a UK address, instead of declaring they've moved abroad, and keep getting the annual increases.

[Oxx]

47 minutes ago, sumrit said:

As UK state pensions are so low this is also the sort of weekly increase that encourages some to continue to keep a UK address, instead of declaring they've moved abroad, and keep getting the annual increases.

 

Uh, not really.  That's the sort of excuse that people use to "justify" their criminal action stealing from the British tax payer.

[nontabury]

14 minutes ago, Oxx said:

 

Uh, not really.  That's the sort of excuse that people use to "justify" their criminal action stealing from the British tax payer.

It’d the actions of consecutive governments, who refuse to pay, the going rate, to those British citizens, who payed into the system for many,many years, that constitutes stealing. 

They were of course advised on how to cheat ex-pat pensioners, who happen to reside in some countries, by senior civil servants.

[Oxx]

29 minutes ago, nontabury said:

It’d the actions of consecutive governments, who refuse to pay, the going rate, to those British citizens, who payed into the system for many,many years, that constitutes stealing. 

 

It's not stealing.  It would only be stealing if the expats were entitled to an inflation-adjusted pension, but they are not, and the rules have been patently clear for decades.

 

Expats don't make purchases in the UK, so don't contribute back to the exchequer via VAT at 20%.  It's only fair they get less generous state pensions.

 

What is iniquitous is that pensioners living in some selected countries do get the inflation increases.  However, successive UK governments have been too lily-livered to treat all expats fairly and take away those anomalous increases.

[transam]

6 minutes ago, Oxx said:

 

It's not stealing.  It would only be stealing if the expats were entitled to an inflation-adjusted pension, but they are not, and the rules have been patently clear for decades.

 

Expats don't make purchases in the UK, so don't contribute back to the exchequer via VAT at 20%.  It's only fair they get less generous state pensions.

 

 

That is crap because there is a list of countries we can live in that nothing from our pension is paid back to the UK regarding tax....USA is one..

[rockingrobin]

1 hour ago, transam said:

That is crap because there is a list of countries we can live in that nothing from our pension is paid back to the UK regarding tax....USA is one..

Before using the US as an example of perceived unfairness , it is necessary to understand the social security agreement between the UK and US.

The purpose of the agreement is to eliminate double social security taxation that would otherwise occur.  It also allows for contributions made in each country to count towards respective entitlement to pensions

[billd766]

22 minutes ago, rockingrobin said:

Before using the US as an example of perceived unfairness , it is necessary to understand the social security agreement between the UK and US.

The purpose of the agreement is to eliminate double social security taxation that would otherwise occur.  It also allows for contributions made in each country to count towards respective entitlement to pensions

 

If you live on the US side of the Niagara falls you get the increase. If you you live a mile or so away in Canada, you don't. If you live in the US Virgin Islands you get the increase. If you live in the British Virgin islands then you don't.

 

Can you explain why British expats living in the Philippines (which is not part of the USA) can get the increase but those expats living in most Commonwealth countries cannot?

[steve187]

6 hours ago, p414 said:

phone the pensions service.They are very helpful but make sure that what you tell them re your pension is correct.

Last time I spoke to a manager of the pension service I was informed that those that are claiming for a thai wife' will have this part of their pension stopped in 2020.That was 3 years ago.

 

not just a Thai wife, but any nationality wife, including UK.

[vogie]

2 hours ago, Oxx said:

 

It's not stealing.  It would only be stealing if the expats were entitled to an inflation-adjusted pension, but they are not, and the rules have been patently clear for decades.

 

Expats don't make purchases in the UK, so don't contribute back to the exchequer via VAT at 20%.  It's only fair they get less generous state pensions.

 

What is iniquitous is that pensioners living in some selected countries do get the inflation increases.  However, successive UK governments have been too lily-livered to treat all expats fairly and take away those anomalous increases.

No expats don't make purchases from the UK as such, but many of us still pay taxes to the UK government. However expats are not a burden to our overloaded NHS, nor do we get free prescriptions, its all about fairness and in my opinion the government are being mighty stingy to say the least.

Edited March 24, 2018 by vogie

[steve187]

12 minutes ago, billd766 said:

 

If you live on the US side of the Niagara falls you get the increase. If you you live a mile or so away in Canada, you don't. If you live in the US Virgin Islands you get the increase. If you live in the British Virgin islands then you don't.

 

Can you explain why British expats living in the Philippines (which is not part of the USA) can get the increase but those expats living in most Commonwealth countries cannot?

its to do with  bilateral agreements

 

Edited March 24, 2018 by steve187

[nong38]

Lest we forget the 500,000 ex pats who live in the EU who will still get the annual increases even when we have left. As far as I know they shop locally and make little or no contribution to HMRC in the VAT department, like us they still pay taxes to the HMRC though.