UK State Pension Changes for 2016!
Have you ever worked in the UK?
This is a question that is more often than not answered with a ‘yes’ for residents of Australia. If you did previously work in the UK and paid National Insurance contributions (an additional tax that was deducted from your wages as an employee) then you are probably due to receive the UK State Pension at some point.
Currently , if you contributed to the National Insurance system for 3 years or more you would be eligible to claim a proportion of the UK State Pension. By working and paying National Insurance for 30 years you would be entitled to receive the maximum basic State Pension equivalent to $10,500 per year based on current exchange rates. However, if you are not yet in receipt of your pension from the Government and are not due to claim it until after April 2016, there are some important changes which will be implemented that could seriously affect your entitlement.
From April 2016, you will need to have accumulated a minimum of 10 years National Insurance credits to be eligible to claim the pension, as opposed to the current 3 years, which could effectively remove many expats from being eligible to claim the State Pension. In addition, the maximum pension that you can receive will increase from $10,500 to $13,250 per year but you will require 35 years worth of credits will be required to achieve this higher pension rather than 30.
If you feel that you may fall short of this new minimum National Insurance contribution level, it is possible to improve your record by making voluntary contributions from abroad. This can also be done in order to increase and maximise the amount of pension you receive from pension age, up to the maximum of 35 years. Voluntary National Insurance contributions start from as little as $5 per week and quickly increase the amount of pension you receive in retirement.
The team at Pension Transfer Specialists are all UK migrants, sharing in your experiences and concerns and have extensive knowledge of the pitfalls and complex tax regulations associated transferring private pensions and topping up the UK State Pension. If you would life some further information, please do not hesitate to contact the team.
Will Lyons Dip PFS
UK Pensions Specialist
Tel: (08) 9233 9271
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