UK State Pension - Payment Abroad

LaCaLa

An extensive online search hasn't led me to an answer to the following:

If one is resident abroad (US) and opts to have UK State Pension payments credited directly to a foreign (USA) bank account (in which case payment is then received in dollars) - what is the percentage fee charge for this transaction?

Presumably, although the actual fee amount will vary with the constantly changing pounds to dollars conversion rate - the percentage fee itself - for the conversion, is a fixed rate.

NOTE: This query isn't about the conversion rate (which fluctuates constantly), but about the fixed percentage deducted by the Pension Centre from each payment.

Thrugelmir

You should be paid in full.

greenglide

The money is paid into your US bank account in sterling. Any charges, currency rates etc are all a matter between you and your US bank.

DWP charge you nothing but pay in sterling.

missbiggles1

greenglide wrote: »

The money is paid into your US bank account in sterling. Any charges, currency rates etc are all a matter between you and your US bank.

DWP charge you nothing but pay in sterling.

That isn't how it works in the EU - is it different for the States?

bigfreddiel

missbiggles1 wrote: »

That isn't how it works in the EU - is it different for the States?

How does it work in the EU?

LaCaLa

Thrugelmir wrote: »

You should be paid in full.

Thank you for your reply - but I'm afraid it's *incorrect*. That does not happen. Nor is it supposed to. The pension service acknowleges that there is a fee charged. They don't disclose it however. And I'm unable to find it revealed anywhere.

greenglide wrote: »

The money is paid into your US bank account in sterling. Any charges, currency rates etc are all a matter between you and your US bank.

DWP charge you nothing but pay in sterling.

That, too, is incorrect!

When making payments to those residing abroad, the pension service automatically converts the pounds sterling amount of your pension - to your local currency.

The payment cheque is received in your local bank account in the currency of your country with a deduction having been made for the conversion.

And again - I'm trying to ascertain what percentage is deducted from the payment received, for making the currency conversion.
I shall assume that the percentage charge would be the same in any EU country - as it is for me in the US.

I hope there's either someone out there who happens to know the answer to this - or can at least point me to where to find it.......:question::question:
Thanks.......

LaCaLa

missbiggles1 wrote: »

That isn't how it works in the EU - is it different for the States?

No, the poster is incorrect.
I believe it's the same in EU and US:

https://www.gov.uk/state-pension-if-you-retire-abroad/payment

(see: Item3: Payment)......

"Your State Pension can be paid into:
a bank in the country you’re living in
You’ll be paid in local currency - the amount of money you get may change slightly due to exchange rates."

missbiggles - do you happen to know the answer to my original question?

And to ask it another way....

What percentage fee is automatically deducted from the mid-market conversion rate of exchange before the issuance of the pension payment cheque?

greenglide

"Your State Pension can be paid into:
a bank in the country you’re living in
You’ll be paid in local currency - the amount of money you get may change slightly due to exchange rates."

While that is true "you are paid in local currency" the payment by DWP (via CITIBank) is in sterling. The conversion to the local currency will be done by your overseas bank (or possibly CITI?) but never by DWP.

In the old days, when they still made payments by Payable Order, these were in sterling as well and the recipient was responsible for all the costs of currency conversion.

atush

I agree, the conversion (rate and fee) will be determined by a US bank- either yours or theirs (citi).

An alternative is you keep a UK bank acct, and move the money from there to your US bank acct (online), or to take it out as cash from ATMs.

greenglide

What percentage fee is automatically deducted from the mid-market conversion rate of exchange before the issuance of the pension payment cheque?

and there is no "cheque" issued. The funds are paid to CITI in sterling and CITI make the international transfer into the customers bank account.

LaCaLa

greenglide wrote: »

While that is true "you are paid in local currency" the payment by DWP (via CITIBank) is in sterling. The conversion to the local currency will be done by your overseas bank (or possibly CITI?) but never by DWP.

atush wrote: »

I agree, the conversion (rate and fee) will be determined by a US bank- either yours or theirs (citi).

It's Citibank that electronically wire monthly payment to overseas bank.
Overseas bank has no involvement in the conversion.
Conversion to local currency is made by Citi prior to its receipt by local bank.
Local bank charges nothing for receipt and deposit of these pension payments.

I was (mistakenly) assuming the Pension service was responsible for determining the timing of funds conversion and for then generating monthly payment - after having first deducted a percentage fee for that conversion.

Your replies make me realize my assumption about the procedure was naive and incorrect:

Once set up with the International Pension Service for payment abroad - everything related to the periodic transaction is handled exclusively by Citi - who - acting as intermediary - have on file all payment dates and sterling payment amounts due to State Pension holders paid abroad.

Probably the only intervention by DWP is the annual COL increase of payment amounts due, if one has been issued in a given year.

It does help me to understand the pragmatics.
I'm still, however, left with my original question....

What am I being 'charged' (by Citi)?

That's probably a question only they can answer - tho I'd think, having contracted with Citi to be their intermediary for these transactions, it's something the Int'l Pension Service does know the answer to (and, IMO, should disclose).

Contacting Citilondon from abroad and attempting to try to reach the appropriate dept. for an answer, strikes me as an excercise in frustration.
Not to mention the 8 hour time difference involved ....

greenglide wrote: »

and there is no "cheque" issued. The funds are paid to CITI in sterling and CITI make the international transfer into the customers bank account.

No, sorry, you're right, I "mis-spoke".
Payment, in dollars, is received by bank as a direct deposit to account. No paper cheque is ever generated.

Thanks again to you both ....if you (or anyone else) have any further thought...would love to hear it....
Am not looking to change my payment set-up.
Only seek answer to the one question!