The UK state pension is a weekly pay-out to retired citizens that, as of April 2021, could reach a maximum of £179.60. This amount changes depending on your National Insurance record and requires that you contribute for 10 years to be eligible for a pension. You need to have contributed for at least 35 years to get the maximum pay-out.
However, for ex-pats, things may not be so straightforward. Does retiring outside the UK mean you can still claim your state pension? What if you’ve worked outside the UK most of your life and your contribution to that country’s state pension?
Here are a few things you need to know about your state pension as an ex-pat.
You can claim your state pension abroad
If you’re eligible for a state pension, the government offers options for you to claim it. At the earliest, you have to be 4 months away from your pension eligibility age (66 as of 2021) to send an international claim form to the International Pension Centre. You can choose to have the payments deposited to a bank in the UK or your current country of residence. You can also deposit it in someone else’s account, with written permission and other documents. If you choose to receive your pension in your local bank, expect the amount to change due to exchange rates. The pay-out can be every 4 or 13 weeks, but if your pension amount is less than £5 a week, you will be paid annually in December.
Your state pension is only calculated based on your UK contributions
Assume you were still living and working in the UK and you contributed to the National Insurance for 16 years. After that, you moved to Japan for work and began contributing to their state pension for 20 years. This totals to 36 years of paying for a pension, which, in the UK, would have qualified you for the maximum pay-out. However, since you only contributed to the UK state pension for 16 years, you’ll only get an amount based on those years.
However, if you worked in a country that has a social security agreement with the UK, such as Switzerland and Gibraltar, you can still build up on your UK National Insurance record. Before Brexit, ex-pats within the European Economic Area (EEA) were also eligible for this, but that might not be the case for long.
A pension is helpful to all of us, so it’s best that you stay informed on what your options are and how much you can expect to get during your retirement. This helps you plan for your retirement better. Before it’s too late, you may want to reach out to financial advisers to determine the best course of action. The sooner you diversify your pension plan, the more you can enjoy a comfortable and worry-free retirement. You can check tailormadepensions.eu for a financial plan that’s suitable for you.