I think I am right in saying that you may (if you are in good health) do better to defer your state pension, as it rolls up quite nicely at around 10.1% p.a. tax free. This works if you plan to live to 90.
What i think is wrong at the moment, is that there is a minimum wage threshold that has to be met before an individual can actually pay NI contributions, this minimum is higher than the minimum wage. So those on a minimum wage can't pay NI, so does this mean in the future they are not entitled to any form of pension? Also, for married couples, if one dies whilst drawing a state pension, the partner no longer gets a reduced pension contribution? As we are likely to have younger spouses, it's not only our future existence that needs to be considered in retirement (if it is even possible to retire?), but also our partners we may leave behind. If your Filipino spouse may eventually return to the Philippines, then it may be worth your partner to still contribute to the philippine SSS system, which may grant them access to a minimum level of health care and other benefits in the future (something is better than nothing)?
But, John, you won't be alive to care! I am pretty sure that my deathbed thoughts will not incude "I wish I had not deferred my state pension!"
Thanks - the rough answer - "£109 a week" has concentrated my mind wonderfully and I have applied for a Pension Statement as a first step before planning to buy the additional qualifying years... since I have three years to pension age it looks like I may need to buy three to get 35.
113 is the current basic but that is going up to about 148 https://www.gov.uk/new-state-pension/overview Your situation is complex you have about 20 months till the new rules take effect as you retire after the new rules come into effect which means you will get a higher rate but there will be some pro-rata reduction because at the point you retire you will need 35 qualifying years and not 30 but you will only have about 30 years, in your case Andrew you need to get both pension statements old rules and new rules as you would have qualified for full state pension under old rules but will miss the target under the new rules and will experience a small reduction as a result. Further complicating things is the question of contracting out during your 30 to 31 years, have you ever been in a contracted out status with a private pension during that time or working as self employed during that time? If you have not then your pension forecast will be higher, my mate retires in a couple of months and he is on over 200 quid a week with his SERPS and State Second Pension top up's (he's also got loads of savings in a SIP). I'm not sure how the rule changes will affect you but you need to weigh the benefits of a few extra quid a week against the cost of the investment in extra NI contributions against any improvement in circumstances, also you can only buy back specific years you many not be able to make up for years lost due to working overseas as they are prior to the years you are allowed to claim back see here https://www.gov.uk/voluntary-national-insurance-contributions/deadlines. You probably want to get a statement of NI contributions as well as a pension forecast just to see exactly what gaps you have https://online.hmrc.gov.uk/shortfor...me=&location=40&origin=http://www.hmrc.gov.uk but uf all the gaps are really old then there would not be a lot of point. The biggest affect on your state pension will be the result of any contracting out on SERPS or State Second Pension during those 32 qualifying years that you will have accrued as that will reduce the extra you could expect, however if you were not contracted out during that time then your pension forecast will probably be better than mine.
I would not defer it, even if I continued working, money you get out of the state could be invested elsewhere or simply banked if you continue working, obviously if you keep working you might be paying 40% tax on your state pension but it is still money that you are getting back. The change in law that pushed me back to age 66 for retirement is going to cost me about 8000 pounds in today's terms, money that I will never see, even though the new state flat rate pension is higher than I could have expected they have just clawed back about 16 pounds a week from me, over say a ten year retirement, even more if don't last as long as 10 years. I mean even if I lasted 20 years I would be losing about 8 quid a week, just for that one year delay in being allowed to retire.
Well, it took about 6 weeks for my statement to arrive at the door. I was just about to phone them up this week and give them an earful, but lo and behold it arrived at the weekend.
Sorry, Oss, but why will it be 66 specifically, for you? Is this down to qualifying years worth of contributions?
All very complicated. Worth noting that the Philippines is one of the countries where resident expats will receive an indexed UK state pension. People retiring to many other Asian countries will not. Important to also consider inheritance tax rules if you have a foreign spouse as discussed here => Daily Telegraph 22-02-13
Well, i know you chaps arent affected in this way, but There is an IOM factor for me. I know that there is a reciprocal agreement between the UK and IOM so my combined NI contributions to both will give me a state pension in either. Just looking through the IOM pension website it looks like they do a widows pension here and retirement will be fixed at 67. More to contemplate....
Certainly is. I use a good IOM accountant. If you live here and genuinely so and dont have assets in the UK then one qualifies. Common knowledge here. Its those that arent genuinely resident here that would have a problem. "Providing you have given up your domicile in the UK and established ties to the IoM - i.e. set up home there then your estate will not be liable to UK inheritance tax unless you chose to relocate certain assets back in the UK. If you were to do so those assets that you relocate back in the UK could be assessed for inheritance tax but not those assets that remain offshore." Its pretty similar to income tax here. If one is genuinely resident here with income earned here, then one need only pay IOM income tax. Simple. Zero corporation tax too.
i wouldnt be at all surprised if the state pension becomes means tested eventually----a sort of developement of the present guarantee credit scheme. so any private pensions below that level will --in effect--become worthless.
Well. Just phoned the DWP. Enquired about qualifying years. It is 30 under the old rules and 35 with some adjustments if contracted out, under the new rules. As my figures are higher under the old rules my qualifying years are sufficient at 30. Thats what the woman said.
State pension ages have changed, the law has been changed so that people my age have to wait an extra year and by 2046 retirement age will be 68 for all. https://www.gov.uk/government/policies/reviewing-the-state-pension-age
