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Your UK State Pension Guide
For those that are eligible, claiming a UK State Pension is a great way to boost your income in retirement. Unlike the Australian Age Pension, the UK State Pension is not means tested, and even if you haven’t worked there for years, you could still claim. And as the uncertainty of the current political and economic climate in the UK continues to grow, there is mounting urgency for some people to take advantage of things like the UK State Pension in case something changes as a result of Brexit. If you’ve worked in the UK, read on to find out more about how to work out if you’re eligible, and what you may be able to claim.
Am I eligible?
There are a few criteria that you must meet to be able to top up and claim a State Pension. The first one to note is that you must have worked and lived in the UK for a minimum of 3 consecutive years. In the time you lived and worked there, you must have been working immediately before leaving the UK, and had a good working history while in the UK. What’s more, you must also be currently employed here in Australia. If you meet these criteria, there’s a strong chance you’ll be able to top up your State Pension.
What can I claim?
If you are indeed eligible to top up and claim a UK State Pension, the amount you could get depends on how many years of National Insurance (NI) contributions you’ve made, both working and through buying them back. You can buy back NI years from the 2006/07 UK Financial year onwards, meaning a potential top-up of 13 years is up for grabs. At the lower class 2 rates that are on offer, topping up to reach 10 qualifying years can net you $84.30 per week when you retire. Another example: if you’ve worked in the UK for 20 years, and top up an extra 10, you’ll receive a very handy $252.90 per week once you leave the workforce – how good does that sound! And all of that is for a one-time payment that many recoup with their pension payments over a relatively short period.
What’s the rush?
Aside from the peace of mind of knowing that you’ll have a means test-free income source in retirement that you can enjoy, it’s important to acknowledge the fact that the present state of the UK’s political and economic environment has raised uncertainty about the stability of things like the State Pension. For instance, the much lower Class 2 top-up rates were set to be abolished in April 2018, but that plan was put on the backburner due to the Brexit turmoil. As doubt continues to surround the UK economy and what that might mean for expats and those who’ve worked there, the general consensus is that it’s best not left too late to claim what’s rightfully yours.
Navigating the complex and often frustrating UK Government can be confusing at the best of times. The UK Pensions team at McKinley Plowman are on hand to make the whole process simple and easy. To discover your eligibility and see how we can help you, get in touch via our website or call us on 08 9301 2200 today.
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