Get a Retirement Forecast

Hannah Beecham  Thursday, Feb 18 2010  14.52

Your Stake in a UK State Pension

If you have not already retired, it's a good idea to request a retirement pension forecast. This will enable you to check the amount of state pension already earned and the amount you can expect to receive at state pension age. Those of you still based in the UK should obtain form BR19 from your local social security office or contact the State Pension Forecasting Team at www.thepensionservice.gov.uk.

HM Revenue and Customs directs those already overseas to obtain their pension forecast from the Charity, Assets and Residence's Newcastle office. The form you need is CA3638. Write to Charity, Assets and Residence – Residency, BP1301, Benton Park View, Newcastle-Upon-Tyne, NE98 1ZZ. Tel: +44 191 203 7010, if you are calling from abroad, or 0845 91 54811 from the UK.

Retail Price Index still dictates rises

For the time being, any increases in the UK state pension remain linked to price increases via the Retail Price Index (RPI). To qualify for a full UK state pension men have to make National Insurance contributions for 44 years and women for 39. Currently, women can collect a state pension from the age of 60; men must wait until 65. The pension age is set to rise for women to 65 years, phased in between 2010 and 2020.

A link was introduced in 1974 to ensure that state pensions kept pace with earnings – the rate at which salaries were rising. In 1980, that link was scrapped and pensioners had to fall back on their savings, assuming they had any, to fund the difference between the pension and their spending.

Changes afoot

The UK's Pensions Commission has announced proposals which radically affect the UK state pension. These reforms take effect from April 2010:

• The state pension age for men and women rises to 66 years by 2030, to 67 by 2040 and to 68 by 2050.
• The state pension from 2010 will be linked to average earnings rather than prices.
• From April 2010, the number of years’ contributions required for people to qualify for a full basic state pension will be cut to 30.

Can I take my UK state pension with me wherever I go?

All members of the European Economic Area (EEA) have the right to live in any EEA country. British expats retiring to an EEA member state or to a country that has a social security agreement in place with the UK (see below), are entitled to receive a pension, or proportion of a pension, from any EEA country where national insurance contributions have been made, provided these add up to the minimum required to qualify. The total of the contributions made dictates how much (if any) pension is received.

Expats moving between, and making National Insurance contributions towards the pension schemes of different EEA territories, have their entitlement calculated according to a pan-European system. Each country where the expat has lived totals the contributions made therein. The country of residence pays the amount to which the expat would be entitled had that total been paid into the resident country's own social security scheme. The countries where the expat lived previously reimburse the resident country proportionately.

Switzerland

Although Switzerland is not a member of the EEA, the Foreign & Commonwealth Office (FC) confirms that its social security system functions broadly in line with EU rules, thanks to an agreement with the European Union which came into force in 2002.

Welfare rights abroad

Some Brits retiring to an EEA member state, or to a country that has a social security agreement in place with the UK (see below), will be able to claim additional benefits. Find out more from The Pension Service, at www.thepensionservice.gov.uk. Ask for their leaflet entitled Going Abroad and Social Security Benefits (GL29).