When you are a UK expat and have been living abroad for some time, you can definitely claim your state pension even if you are residing in another country. The same is true if you are planning to retire to another place – you can claim your pension as well. If you have made the proper number of contributions to National Insurance and can receive a pension, then there shouldn't be a problem for you when it comes to claiming your pension, provided you do it the right way and know what to expect. So, what should you know about the intricacies of claiming your pension if you are a UK expat? Here, your top questions are answered.
Claiming your pension: the basics
If you would like to claim your pension from the UK whilst you are abroad as an expat, one of the best things you can do is get in contact with the International Pension Centre. Alternatively, you can send a claim form to the Centre.
Pension payments if you are abroad
In order for you to get your pension whilst overseas, you can choose to have it paid to your building society or bank in the UK; you can also choose to have it paid to a bank in the place where you are residing. The bank can be your sole account or a joint account with another person, and it can also be another person’s account as long as you have asked for their permission. For the pension transfer, you need to provide the IBAN (international bank account number) as well as BIC (bank identification code) if your account is based overseas. In essence, whichever country you reside in, all you need is a bank account and the aforementioned number and code for you to receive your pension. Remember, though, that you must select the main country where you would like to receive your pension; in other words, you cannot choose to have your pension transferred to one country for a few months and then another country for the remaining months of the year.
When you choose to have your pension paid in another country, your pension will be paid in the country’s local currency. If you have a UK account and choose to have your funds paid to this account, you will have to change the funds into the country's local currency once you receive them. You also have the choice of getting paid once every four weeks, or once every 13 weeks.
Pension increases for expats
If you are abroad, you may be wondering whether your UK pension will also increase based on UK pension increases in the budget every year. As of now, if you are in the UK, your pension should increase every year based on the growth in earnings as well as inflation. If you are in the UK, it is also supposed to grow at a standard 2.5 per cent every year. But whether or not your pension will increase if you are abroad will depend on the place where you choose to live or retire. Essentially, your UK pension will be ‘frozen' at the same rate as when you left the country unless you have moved to member countries of the EEA (this includes all countries in the EU plus Norway, Lichtenstein, and Iceland), Switzerland, Gibraltar, and countries which have an agreement on social security with the UK, such as Bermuda, Jersey, Guernsey, the Isle of Man, Kosovo, Jamaica, Israel, Montenegro, Turkey, Macedonia, the Philippines, Mauritius, Serbia, and the USA.
Here's another good thing: if you work abroad, you may have the chance to contribute to that country's pension scheme, which would then make you eligible for the country's pension on top of your UK pension. If you want to be sure of your UK pension even whilst abroad, you can also take advantage of private tailor made pensions, which can help you manage your assets and even increase them depending on your investments.
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