PENSION GUIDELINES for British Expatriates
Brought to you with the compliments of British Australian Pensioner Association
Changes in Rules
The new rules are in force as from April 2010.
IMPORTANT INFORMATION - The new rules will not affect you if you are due to reach pension age before 6th April 2010. No new claims for Adult Dependancy Increase will be allowed after that date, even if you reached pension age before that date.
You can see the new rules at New rules for UK pensions - Adviser Briefing Pack
If you apply for a pension forecast the UK authorities will probably include a lot of material like the following, even if the new rules will not apply to you.
Please read this carefully before you decide to pay any voluntary Class 2 or 3 contributions.
On 25 May 2006, the Government published a White Paper "Security in retirement: towards a new pensions system (Cm 6841)", and a bill is now (July 2007) being processed in Parliament.
If the proposals become law, State Pension awards will be worked out differently for people who reach state pension age on or after the 06 April 2010, that is men born on or after 06 April 1945 and women born on or after 06 April 1950. If you were born before these dates you will reach state pension age before the new rules cut in, and the new rules will not apply to you.
The key proposed changes that could affect your decision to pay voluntary contributions are:
A gradual increase in State Pension age from 65 to 68 between 2024 and 2046.
A reduction in the number of qualifying years needed to get
a full basic state pension .At
the moment, women need between 39 and 44 years depending on their date of birth and
men need 44, but under the changes, everyone would need just 30 years.
The minimum number of qualifying years needed to get some
basic state pension would be
reduced to one.
Home Responsibilities Protection (HRP) years, which under the current rules reduce the number of qualifying years needed for a full basic pension would be replaced by weekly National Insurance credits for:
Parents awarded Child benefit for a child under age 12 and approved foster carers;
Carers who provide 20 hours or more weekly care for someone who is sick or severely disabled.
You may have been advised that under the current rules you have a shortfall in your National Insurance record and you now:
want to make up the shortfall
need to consider paying voluntary Class 2 or 3 contributions
need to make a further payment of voluntary Class 2 or 3 contributions in order to make the tax year in question qualify for State Pension purposes under the current rules.
If the Bill becomes law you may not need to pay the voluntary Class 2 or 3 contributions. This is because you are due to reach State Pension age on or after 6 April 2010 and
you may have already qualified for a full basic State Pension under the proposed new rules; or
you may anticipate working and paying enough contributions
to qualify for a full basic State
Pension under the new rules.
You should therefore consider very carefully whether you
should delay paying Class 2 or 3
contributions until it is clear whether the rules will change.
If you nevertheless decide to pay the contributions, you might not be able to get a refund if it turns out that you need not have paid them. However, if you delay payment the contributions may have to be paid at a slightly higher rate (if you delay payment the normal time limits for paying Class 2 or 3 contributions still apply).
For more information on the proposals visit