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Winners and losers on UK expat state pension new rules
| Published: | 9 Dec at 6 PM |
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The UK chancellor’s Autumn Budget Statement will bring a raft of changes for pensioners both home and abroad as well as affecting private pension investors.
The state pension will be increased by £2.95 per week from April next year, but Britons retiring in European Economic Area states which are on average warmer in winter than the hottest UK region will no longer receive the winter fuel payment from April 2015. Those living in northern Spain, France and Italy are likely to be severely affected.
In a nod to the already wealthy, George Osborne announced that changes to Individual Protection 2014 rules will allow savers with considerable funds to ring-fence their lifetime allowance at £1.5 million, although the cap will drop to £1.25 million in April 2014. ISA limits will increase to £11,880, although only 50 per cent of that amount can be held in cash.
Pensioners due to reach the retirement age of 65 before 2016 will be allowed to pay voluntary National Insurance contributions to top up their pensions. This will help those who’ve been working abroad, women who have preferred to raise their children rather than working and the self-employed.
State pension age is to be linked with longevity statistics, ensuring that the retirement pension is paid for an average of a third of a person’s life. It would seem that, when the state pension age is raised to 68 in 2035 as planned, pensioners will be expected to live to 102 to receive the promised years of benefit.
Meanwhile, expat pensioners are to be asked to prove there are still alive in order to continue receiving their state pensions. The Department of Work and Pensions is to demand regular ‘proof of life’ certificates, due to fears that pensions are still being paid to long-dead oldsters and, of course, frozen pensions are to continue for pensioners living in many countries outside the EU.
The state pension will be increased by £2.95 per week from April next year, but Britons retiring in European Economic Area states which are on average warmer in winter than the hottest UK region will no longer receive the winter fuel payment from April 2015. Those living in northern Spain, France and Italy are likely to be severely affected.
In a nod to the already wealthy, George Osborne announced that changes to Individual Protection 2014 rules will allow savers with considerable funds to ring-fence their lifetime allowance at £1.5 million, although the cap will drop to £1.25 million in April 2014. ISA limits will increase to £11,880, although only 50 per cent of that amount can be held in cash.
Pensioners due to reach the retirement age of 65 before 2016 will be allowed to pay voluntary National Insurance contributions to top up their pensions. This will help those who’ve been working abroad, women who have preferred to raise their children rather than working and the self-employed.
State pension age is to be linked with longevity statistics, ensuring that the retirement pension is paid for an average of a third of a person’s life. It would seem that, when the state pension age is raised to 68 in 2035 as planned, pensioners will be expected to live to 102 to receive the promised years of benefit.
Meanwhile, expat pensioners are to be asked to prove there are still alive in order to continue receiving their state pensions. The Department of Work and Pensions is to demand regular ‘proof of life’ certificates, due to fears that pensions are still being paid to long-dead oldsters and, of course, frozen pensions are to continue for pensioners living in many countries outside the EU.
Comments » There is 1 comment
James King wrote 11
years ago:
The inequities of frozen pensions roll on. Having been born and worked in England for 40+ years, paid taxes and NIC's all my working life and then to be cold shouldered as a pensioner leaves me with a bitter taste for my homeland that I don't enjoy. It is difficult to understand why some of us are penalised for exercising our rights to live in retirement in a warmer climate which is beneficial to our health and well-being. By doing so we place no burden on the NHS in England but are made to sacrifice our pension entitlement. How can any government feel comfortable about treating its citizens in such a way?
