Useful information on UK state pensions

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Useful Information on UK State Pensions and
UK Pension Age

In this article I will explain all the information you need to know regarding UK state pensions including how to claim it and how it all works.

We will cover eligible state pension age, how much the state pension is, which will depend on your contribution to the UK state pension, and how you accrue a UK state pension.

Of course, not everyone one is entitled to a UK state pension and we will cover this too as well as your options.

So, read on for all you need to know about UK state pensions.

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What is a UK state pension?

You can get a UK state pension if you work in the UK and make National Insurance payments. There is an additional option to put extra money aside with a workplace pension or to have a private pension. Most companies will give you the option to create a pension pot, so when you get paid money will automatically go in there for you.

The UK state pension is seen as one of the best worldwide as it ranks 15th best globally.

On April the 6th 2016 there was a new state pension brought out that is based on National Insurance records only. Men born after the 6th of April 1951 and 1953 for women will get the new state pension. For the tax year 2021-2022 the maximum per week is £179.60, there is a chance you might get less than this depending on your current circumstances. The new pension works out better for you as you will receive slightly more per week in comparison to the old scheme.

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How does the UK state pension work for expats?

You can claim your UK state pension in a different country if you meet the criteria; if you are living in a different country but have been previously living and working in the UK and paying your National Insurance for a minimum of 10 years then you are most likely to be able to get the UK state pension.

For people that are thinking of moving over to the UK, if you want to make sure you can get the UK state pension then you will need to apply for your National Insurance (NI) number first to check if you are eligible.

If you earn over a certain amount, the NI will automatically be taken out of your pay however, if you do not earn over this amount then you will need to make the NI contributions yourself to make sure that you can get the UK state pension.

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How to transfer your UK state pension abroad?

Regarding personal pensions, you can get that over to a country that is on the overseas pension scheme (QROPS); QROPS is approved by HMRC and allows transfers from a UK pension scheme.

This scheme is particularly useful and can make life a whole lot easier when looking at transferring your pension to a different country. You do need to investigate the tax as well and it is a good idea to talk to an expert in this area before you make any big decisions.

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Getting your UK state pension abroad

Unlike personal pensions, you cannot transfer UK state pensions abroad however, you are able to get your UK state pension paid to you in that country. All you need to do is contact the international pension centre within 4 months of your state pension age. You will then need to complete an international claim form and then choose what country you want to have your pension paid to and how often you want the payments to be.

It can be paid into your bank account in the country you have chosen or to your UK bank account it is completely up to you! There are charges involved such as currency conversion fees that the banks charge and possibly mark-ups on the exchange rate. Companies such as we at Regency FX can help you out in that department.

UK state pension age

While there does not seem to be a standard retirement age in the UK you have to get to a specific age to be able to be entitled to the UK state pension, which is 66 however, it is likely to go up to 68 in the coming years. Forgetting the age, getting the pension depends on when you were born. Even when you reach the state pension age you can continue working if you wish and get your state pension in conjunction to your work wages.

Personal or workplace pensions might be accessible to you earlier however, the UK state pension cannot be received earlier you have to wait until you surpass the UK state pension age to be able to get the pension.

Who can get the UK state pension?

You need to have worked in the UK and been paying NI for a minimum of 10 years to be entitles to the UK state pension. For the full state pension, the same scenario applies however for a minimum of 35 years.

The new state pension rules will only affect you if you turn the state pension age after April the 6th 2016. The old state pension was if you have 30 years' worth of NI payments then you can get the basic state pension which is £137.60 a week.

The new state pension states that you will get £179.60 per week in conjunction with anything else you have made up with NI contributions.

What are the other pensions?

An alternative from the UK state pension is a workplace pension; you can get this if you earn over a specific amount per year and if you meet the other requirements, you should be automatically put on the workplace pension scheme by your employer. You and your employer put frequent contributions in your pension, you might get some tax relief on these earnings too!

The second alternative from a UK state pension is a personal pension; this is a pension that you make yourself and make payments to frequently, you do not get help with this pension. You can get tax relief on this though which might make it worthwhile for you.

There are 3 different types of personal pensions which are: normal personal pensions which you can start with lots of different providers. The next is stakeholder pensions which must stay in line with the government's rules. Finally, the last pension is a self-invested pension (SIPPS), which are more flexible than the other two however, they have more expensive fees to pay.

Who are we?

Regency FX are a UK based independent currency broker, specialising in high volume transfers.

We pride ourselves on our premium level of customer service, you will be allocated your own personal account manager whom you will have direct access to.

All funds transferred through Regency FX are made using client segregated accounts in accordance with the FCA (Financial Conduct Authority) guidelines.

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