The way the UK state pension is calculated is changing for some expats moving to Europe because of Brexit.
The measure impacts expats moving to the European Union, European Economic Area and Switzerland.
Due to Brexit, expats cannot count time living in Australia before March 1, 2001; Canada or New Zealand towards calculating their UK state pension if:
- You are British or a national of an EU or EEA country or Switzerland
- You move to live in the EU, EEA or Switzerland on or after January 1, 2022, including if you move to live in another EU, EEA country or Switzerland on or after January 1, 2022
Some expats are expected to lose pension cash as their UK state pensions will be calculated on their UK national insurance records rather than including extra years of earnings in Europe.
All UK state pensions will be recalculated, regardless of if they are in payment or not.
Who qualifies for the UK state pension?
The measure will not impact pensioners moving to the UK or any expats living in Europe before December 31, 2021.
Expats already in Europe who stay in the same country will not have their state pensions reworked.
The change will not see UK state pensions in Europe lose their annual cost of living increase.
The proposal to change the rules must go before MPs for approval, but cancels gaining qualifying years towards a state pension for expats who worked in Europe prior to Brexit.
The full new state pension is £179.60 a week (2021-22) and the payment is based on your National Insurance (NI) record.
To qualify for the full amount, you must have 35 years of NI contributions.
Qualifying state pension years for workers
If you work and pay NI, you gain a qualifying year if:
- You earn £184 a week or more from a single employer
- You are self-employed and pay NI
It’s still possible to gain a qualifying year if you earn between £120 and £184 from one employer.
Qualifying state pension years if you don’t work
If you don’t work, it’s still possible to gain state pension qualifying years as credits or you can pay voluntary NI contributions.
You may also gain qualifying years this way if you have a gap in your NI contributions.
Calculating your state pension
- If you have fewer than 10 qualifying years, you will not receive a UK state pension.
- If you have between 10 and 35 qualifying years, the amount is apportioned:
|Step 1:||Divide the full weekly new state pension payment by 35|
|For example, divide £179.60 by 35 = £5.13|
|Step 2:||Multiply by your number of qualifying years|
|For example, you have 32 qualifying years, which means you new state pension payment is £5.13 x 32 = £164.20 a week|
- If you have more than 35 qualifying years, you do not gain any extra pension payments.
UK state pension for expats FAQ
It’s a misconception that expats do not pay national insurance on the same basis as workers in the UK to gain their state pension. The way an expat state pension is calculated is the same as someone who lives in the UK – the difference is if the pension is increased in line with the UK cost of living in the country where they live.
To claim the UK state pension, expats must be aged within four months of their state pension age.
To complete a claim:
Contact the International Pension Centre between 9.30am and 3.30pm Monday to Friday by calling: Telephone: +44 (0) 191 218 7777. Textphone: +44 (0) 191 218 7280
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The UK state pension can be paid into a bank in the place where you live or a UK bank or building society.
If you ask for an overseas payment, the money will be paid in your local currency.
You can only collect your state pension in one country, so if you live in the UK for part of the year and overseas for the rest of the time, you must decide where your pension is paid.
If you are an expat with a frozen state pension and move back to the UK or Europe, your pension is uprated to the current payment for your qualifying years, but no balancing lump sum is paid for the frozen years.
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