People who reach the UK State Pension age after 6 April, 2016 now need at least 10 qualifying years on their National Insurance contribution record to get any State Pension. This affects men born on or after 6 April, 1951 and women born on or after 6 April, 1953. The full new State Pension is £155.65 p.w. but 35 years of qualifying service is required.
For those without appropriate number of years or level of pension, there are two ways this can be fixed. There is a special top-up provision available by making a lump sum payment before 5 April, 2017. There is a calculator at www.gov.uk/state-pension-topup that works out how much each pound of extra State Pension will cost. The second way worth investigating is whether to pay voluntary National Insurance contributions. Class 2 premiums are GBP 2.65 to GBP 2.80 and are better than Class 3. Class 2 is only available if the person worked in the UK for 3 years immediately before leaving. In reviewing whether it is worthwhile to make these voluntary contributions, please remember that no cost of living increases will be granted to those retirees living in Australia and that it may partially offset the Australian Age Pension entitlement.
The Class 2 voluntary contributions can be paid every six months by direct debit in January and July each year. It will consist of either 26 or 27 weeks – depending upon the number of Sundays in the period.
For more information, search the web for NI38 Social Security abroad or click this link https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/414910/NI38_CF83.pdf. The State Pension can be paid directly to an Australian bank account every 4 or 13 weeks unless it’s under £5 p.w. – in which case it’s paid once a year. It is possible to increase the pension by deferring it – 1% for each 5 weeks of deferral. The UK Pension Service runs an international section Telephone +44 (0) 191 218 7777 or by mail to The Pension Service 11, Mail Handling Site A, Wolverhampton, WV98 KW United Kingdom.
The NetActuary Team