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Moving to Philippines? Banking advice.

Discussion in 'Money Matters' started by Markham, Aug 21, 2012.

  1. bigmac
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    bigmac Well-Known Member Trusted Member

    i think i get the full whack--been on it 6 years now. i was absolutely gobsmacked when i did get it..my last NI stamp is worth more than a penny black.

    i was on long term incapacity benefit for years before i got to pension age--and also got pension credit at 60. happy days.
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  2. Br28016
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    Br28016 Active Member

    That is really useful to know. Quite some time off for me and not sure I would retire to Philippines - key issue is health at that stage although warmer climate may help with lots of things.

    Wasn't aware of that little rule and normally consider myself quite well informed financially so thanks for info.
  3. oss
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    oss Not Here Staff Member

    There is s strong possibility that what I posted might turn out to be wishful thinking so don't take it as an absolute fact, but the dual taxation agreement does exist and the possibility therefore might exist to do what I laid out.

    One problem might be entitlement to the personal allowance as the rules on that may change or may already have changed for people who are non domiciled, this is why I will seek professional advice closer to the time.
  4. Jim
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    Jim Well-Known Member Trusted Member

    New State pension, I started getting my pension in September but I retired early in 2016.
  5. DavidAlma
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    DavidAlma Well-Known Member

    I think you're right, they believe he is living in UK. He has only just started to receive his pension.
  6. oss
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    oss Not Here Staff Member

    Ah as a self employed person you will have benefitted from that a fair bit as you were effectively never eligible for any of the SERPS or S2P stuff for most of your working life probably, the new state pension is a plus for anyone who was ever self employed.

    When you say you were missing years did you have more than 35 full contributing years in total as that's the boundary for full new state pension even if some years were missing, I have 42 full years but have 3 additional years that were not complete but I will be on the full new state pension, the 5 remaining contributory years earn me nothing :)
  7. bigmac
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    bigmac Well-Known Member Trusted Member

    i can well imagine the UK state pension will become yet another means tested benefit in years to come, effectively replacing pension credit. so anyone getting a private pension over and above the state pension amount will get sod all. but dont worry guys--you will still have to pay the full NI contributions

    you can never trust any government.
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  8. Br28016
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    Br28016 Active Member

    It is a complicated area especially if you were in contracted out scheme when in 2015 the maximum pension that you had was the old state pension value and then had to build up years from then. Think needed 10 years from that point to get the maximum new state pension.
  9. oss
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    oss Not Here Staff Member

    I was contracted out 1985 to 1990 then again in 1993 to late 1995 after that it didn't matter because I was self employed for the next 13 to 14 years and only paying class 2 and class 4 nic, although my two missing years were due to my nervousness about whether I would be a successful startup at the start of my self employment, just didn't pay the class 2 nic for that period :) and sorted out the tax in my third year which wasn't cheap :)

    When I checked in 2014, my graduated/SERPS/S2P had pushed me up to about £135 a week which was less than the proposals at the time for the new state pension by about 7 or 8 pounds a week so the new state pension was a boon for me as I was getting more than I would otherwise have accrued.

    I have a friend who was never contracted out and who retired under the old rules he retired in 2014 on the old state pension at a rate of about £220 a week due to graduated pension, SERPS and S2P which shows how generous and good a system existed once upon a time.

    Contracting out was considered a brilliant idea at one time back when private pension investment returns were high and annuity rates were 10% or more and your accountant was recommending a pension pot of 100,000 and that you should save into Stocks and Shares ISA's to build up your own tax free savings, but really it was a way for the governments of the time to offload future pension responsibility they've seen the pension crisis coming for 35 years or more and although some who retired in the 90s and early 2000s benefited from it most of us now would have been far better off never having been contracted out.

    The new state pension takes into account contracted out status those who would have had greater entitlement under the old system through not being contracted out still get more than the new flat rate pension they don't lose out as the old calculation and the new calculation are performed and you get the higher of the two, this is the new pension system that was supposed to simplify everything but which in reality will take a generation to achieve that simplicity and only if they don't mess with it further during the next 20 or 30 years :)

    Today to get the £10,000 a year annuity income from the £100,000 pension pot that used to be recommended by your accountant you need a pot of £300,000 or more, which is why the new pension freedoms have been introduced as a lot of people won't live long enough to get any benefit from a £300,000 annuity which dies with you, under the new rules you could draw down, assuming only 3% investment growth per annum, £18,000 a year for 23 years before you ran out of money (I will never reach the age of 89 and if I did I wouldn't need as much money then anyway so I'm not afraid of running out).

    Still not as good as the £30,000 a year you would have gotten from a £300,000 annuity 20 years ago but at least you get the chance to benefit from any uptick in the markets although of course you are also at risk from any downturn as well.

    By the time I retire my new state pension will be about £192 a week assuming continued triple lock until its end and then a double lock of about 2% and barring major market disasters (which are very likely in my opinion) I will have a fair bit more than a £300,000 pot, actually I already do but some of it is bound up in a defined benefit pension which I really need to release. If my luck holds out I should have a substantial cash lump sum and be able to draw down about £20,000 a year added to my state pension, but history shows that the luck never holds so I expect my returns will be rather less :)

    In order to reach my goal I live on £300 a month just now after all bills and supporting my kids, that pays for food and all discretionary spending, I pour vast amounts into my personal pension every month but as a higher rate taxpayer that makes sense anyway, but living on very little is also early training for the time to come when I won't have as much, indeed I should actually feel much wealthier when I finally retire as I should be able to open the purse strings a little.
  10. Jim
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    Jim Well-Known Member Trusted Member

    No Jim, only 32 full years. Not sure what happened in the 90's! most of those years just had a few weeks missing but they don't qualify for a full year. You need 52 weeks for that year to qualify for a full year.
  11. oss
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    oss Not Here Staff Member

    That's a bugger :(

    The numbers they have on my incomplete years don't tally with my memory of the time, I have one year where I was credited for 102 weeks :eek: (1976) how did that happen, and a year in the 70s where I failed to contribute enough, to add to my 2 later bad years.

    I earned and contributed my first NI at age 15 and I knew pretty much from then how important the contributions were but like most just assumed they were happening, I did know while I was a student that it was very important to sign on at the end of term to roll over your prior NI contributions and I at least succeeded in carrying over all contributions from age 15 through to my first real job almost.

    So you should be on just a wee bit less than the full new state pension now, is that right?
    Last edited: Nov 9, 2019
  12. Jim
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    Jim Well-Known Member Trusted Member

    That's right Jim, I get 154 and the full pension is 168.
  13. Bootsonground
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    Bootsonground BANNED


    Thats about 40K PHP per month after transfer..Is that right Jim?
  14. Jim
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    Jim Well-Known Member Trusted Member

    Yeah just about right.
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  15. oss
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    oss Not Here Staff Member

    You can choose to get paid every 4 weeks or every 13 weeks to either a UK bank account or a foreign bank account, I think that even if I had the money paid out in the UK I would elect to receive it every 13 weeks in order to reduce the transfer fees although the lower frequency of transfer exposes you to potentially greater exchange rate risks.
  16. Bootsonground
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    Bootsonground BANNED

    Another reason that I am happy not having to rely on a U.K pension here is local inflation and the way it behaves.
    I`m sad to say that I have lost 3 0r 4 Brit friends that simply had to go back due to their pensions being eroded by inflation and of course a consistently falling Pound.
    One of them had a couple of dogs that were loved pets..Once he could no longer afford to feed them he knew it was time to find them a new home and get on the dreaded flight back with his family. Very sad as he loved his life here and had become very well settled.
    The province that I live in may well be one of the most expensive in the country,I cannot be sure..
    Just a short few years ago,fruit and veg averaged around 40.00 PHP per kilo..Now closer to 120.00 per Kilo.. 2 weeks ago one vendor was selling mangoes for 300.00 Peso per Kilo!!! Crikey!
    One of the the biggest expenses for those left here I`m told is medical insurance.. About 100,000 per year..Property rentals have also gone through the roof..2 bed houses here average 35K per month.
    Philippines is not like before where Brit pensioners could live like kings.. Long gone and it`s a shame.
  17. bigmac
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    bigmac Well-Known Member Trusted Member

    so if brit ex pats cant afford to live there--how do the locals survive ?
  18. Bootsonground
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    Bootsonground BANNED

    Poor locals live in small nipa huts usually on inherited land that they build from fallen trees..They eat coconuts,kangkong and small fish and guava fruits etc that grow here with cheap NFA rice..
    I`m not saying all Brits can`t do it..Obviously they can,it`s just not as easy as before when stuff was cheap.
    Not all can live here without their Bigmacs and prime steaks!
  19. oss
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    oss Not Here Staff Member

    So what is the current acceptable living standard for a family of two adults and two children in peso per month?

    Me I don't eat steaks or burgers, and given what's going to happen in the UK it could well be cheaper to live here.
  20. Bootsonground
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    Bootsonground BANNED


    Ouch!! The dreaded and quite often avoided question! How much?
    If you are a cheap Charlie like me that is lucky enough to pay zero rent and can survive on omelettes and beer..Not much!

    Many other long nose Brits that come here and want to live in a nice house in a safe location that is fully furnished and fully air conditioned and will not compromise.. Rent will be between 25K-50K per month..
    Power bill between 3-12K per month. Grocery shop for us is around 20k per month but I know foreigners here that double that amount.
    If you are thrifty,you and 2 kids could get away with 12 k for the monthly shop IMO.
    Education costs for the kids can definitely put a hole in your budget if you choose private schools for them.. Our average cost from high school through college/uni has been roughly 10k per month per child.
    To reduce long term costs I would advise a 6/7000 UKP investment in a 5KW grid tied solar system.. Your power bill should be pretty much close to zero..
    There are many ways here to be independent of future utility costs but it takes planning,land and money.. Good news is that the pay back or ROI is very good..5 years or less.

    If you know how to grow your own food,this will also cut your expenses a lot!

    The variables that I have mentioned are just the tip of the iceberg.
    My point is that you can tailor your expenses to fit your own budget and lifestyle preferences.
    Edit: Problems with inflation and negative exchange rates remain a potential life style changer.
    Last edited: Nov 10, 2019
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