Just in case you missed it, the UK government announced some incredibly important changes to those of us holding money in private pension plans back in the old country.
For the first time, you are now allowed to access your entire pension pot at the age of 55 giving you much more flexibility with how you choose to utilise your retirement savings. Furthermore, there is no need to purchase an annuity at any point in your retirement.
In the past, those reaching 55 could access 25% of the funds, while the balance had to remain invested to generate income or by purchasing an annuity. Now you can access all the funds. Again, the first 25% is tax free; the balance can be accessed immediately at whatever your top marginal tax rate is.
How that affects expats is not immediately apparent, but I suspect the tax rate applied will depend on the size of the pot.
It's a radical step in the right direction. This, combined with the plan to overhaul the UK state pension to give a standard GBP140 a week (in 2013 value) to all retired individuals has got to be positive.
For Brits with private pension plans
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A positive step which I hope doesn't prevent an investigation into mis-selling of annuities by the big players. Always thought it wrong that someone working all their life had to buy an annuity perhaps at a time when rates happened to be historically low. It could be a win win of course for the current govt who may see a short term increase in tax revenues. When's the next election ?
I think I'll wait and see the tax details relating to expats to assess the benefits or otherwise from a personal planning viewpoint.
I think I'll wait and see the tax details relating to expats to assess the benefits or otherwise from a personal planning viewpoint.
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My understanding is that you need to make NI contributions for 35 years to get the 140GBP a week. Less than 10 years you don't qualify for anything and then it is on a sliding scale from 10 to 35 years from 100 GBP to the 140 GBP per week.It's a radical step in the right direction. This, combined with the plan to overhaul the UK state pension to give a standard GBP140 a week (in 2013 value) to all retired individuals has got to be positive.
That said by the time I retire it will probably be cut to 50 quid a week for everyone over 80 so it's important to invest in a private pension or better yet property and land.
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Will this result in more of the British pensioners in Southeast Asia withdrawing their money sooner, blowing it more quickly on beer and hookers, then having to return home broke?
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Thanks Scooby snack, did miss it & affected. Still got 17 years to wait for the 55 bit though, I'm sure some crackpots in Government will bugger it up by then!scobienz wrote:Just in case you missed it, the UK government announced some incredibly important changes to those of us holding money in private pension plans back in the old country.
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Yes you need 35 years to qualify fully as I have read it and as you say they are slowly but surely pushing the age qualification back year by year, and now it's subject to 5 yearly review.indigo_design wrote:My understanding is that you need to make NI contributions for 35 years to get the 140GBP a week. Less than 10 years you don't qualify for anything and then it is on a sliding scale from 10 to 35 years from 100 GBP to the 140 GBP per week.It's a radical step in the right direction. This, combined with the plan to overhaul the UK state pension to give a standard GBP140 a week (in 2013 value) to all retired individuals has got to be positive.
That said by the time I retire it will probably be cut to 50 quid a week for everyone over 80 so it's important to invest in a private pension or better yet property and land.
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It's quite possible that niche demographic was overlooked by the Chancellor, but what the hell he cut beer tax 1p and gave a massive reduction in uk bingo tax, so it's only fair the overseas beer swilling whore mongering retirees should join the party and get some benefit.gavinmac wrote:Will this result in more of the British pensioners in Southeast Asia withdrawing their money sooner, blowing it more quickly on beer and hookers, then having to return home broke?
"Everywhere we go .. people want to know ...who we are... where we come from !"
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rl66 wrote:Yes you need 35 years to qualify fully as I have read it and as you say they are slowly but surely pushing the age qualification back year by year, and now it's subject to 5 yearly review.indigo_design wrote:My understanding is that you need to make NI contributions for 35 years to get the 140GBP a week. Less than 10 years you don't qualify for anything and then it is on a sliding scale from 10 to 35 years from 100 GBP to the 140 GBP per week.It's a radical step in the right direction. This, combined with the plan to overhaul the UK state pension to give a standard GBP140 a week (in 2013 value) to all retired individuals has got to be positive.
That said by the time I retire it will probably be cut to 50 quid a week for everyone over 80 so it's important to invest in a private pension or better yet property and land.
30 years. Not 35.
Pol Pothead wrote:Is it common for British expats to still be contributing funds to the UK NI system even when they are working outside the UK? Are the young TEFLers in Cambodia writing a check to the NI each year to count as being contributors? What would that cost? Is it a certain % of your stated overseas income?
I do it and have done for years. It's a tiny amount. Around GBP 120 a year. This keeps your state pension rights up to date but doesn't contribute to other benefits such as unemployment etc. They are called Class 2 contributions. Very easy to organize.
It's not related to overseas income at all. It's the same contribution for everyone.
You can also back pay several years you might have missed in one go, up to a maximum of five years. Any more years you have missed are effectively lost.
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Currently 30 years and if you reach retirement age before 2016. Under the new single tier proposal it will be 35 years. It's costing me an extra 5 years of contributions so I'll be happy if that's not the case.scobienz wrote:rl66 wrote:Yes you need 35 years to qualify fully as I have read it and as you say they are slowly but surely pushing the age qualification back year by year, and now it's subject to 5 yearly review.indigo_design wrote:My understanding is that you need to make NI contributions for 35 years to get the 140GBP a week. Less than 10 years you don't qualify for anything and then it is on a sliding scale from 10 to 35 years from 100 GBP to the 140 GBP per week.It's a radical step in the right direction. This, combined with the plan to overhaul the UK state pension to give a standard GBP140 a week (in 2013 value) to all retired individuals has got to be positive.
That said by the time I retire it will probably be cut to 50 quid a week for everyone over 80 so it's important to invest in a private pension or better yet property and land.
30 years. Not 35.
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It's a no brainer considering to get an annual income of say £7k you probably need a pension pot of circa £125k. It's still surprising the number of people you come across overseas who haven't kept up their contributions given the relatively small amount involved.Pol Pothead wrote:Wow, that is generous. For 120 sterling per year for 30 years you can guarantee yourself 140 per week for life upon retirement? Sign me up. I hope your system is better managed than the US social security program, which is forecast to be "in the red" the same year I am eligible to retire. I won't see a dime of that money I contributed.scobienz wrote: It's not related to overseas income at all. It's the same contribution for everyone.
You can also back pay several years you might have missed in one go, up to a maximum of five years. Any more years you have missed are effectively lost.
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You're quite right. Recently changed and I hadn't kept up with that.rl66 wrote:
Currently 30 years and if you reach retirement age before 2016. Under the new single tier proposal it will be 35 years. It's costing me an extra 5 years of contributions so I'll be happy if that's not the case.
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I was within touching distance of being fully paid up so very annoying and no doubt in another 5 years they'll increase it again. Personally I think, apart from the longevity issue, it's an underhand and poorly disguised way of trying to hide the fact that the state's finances have been so poorly mismanaged by successive governments.scobienz wrote:You're quite right. Recently changed and I hadn't kept up with that.rl66 wrote:
Currently 30 years and if you reach retirement age before 2016. Under the new single tier proposal it will be 35 years. It's costing me an extra 5 years of contributions so I'll be happy if that's not the case.
Again looking at the budget changes, I'd forgotten that of course a UK based pension is UK taxable regardless of whether you are an expat, so whilst I personally like the flexibility of the changes again the cynic in me recognises the treasury could scoop an early tax windfall by offering people the opportunity/temptation to access their pot and be taxed at their marginal rate.
I'm on the left wing of the govt coalition in my views, and I just hope Labour don't get in and screw it all up again, because I honestly believe they don't deserve to be trusted with the nation's finances again. Slight political rant.
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