Entitlement to state pension for US citizen

reg091

My wife is a US citizen. She has been here in the UK for 15 years+ with the right of "indefinite leave to remain". In all that time she has been working and paying NI (a lot, she earns £70K plus PA).

I have been trying to find out (for 2 years!!) from the NI people if she will be entitled to a UK state pension when she reaches UK retirement age. (OK, on the assumption that she has paid enough qualifying years, and the scheme still exists!). I have got nowhere. I get passed from dept to dept with months in between getting a reply telling me to contact xyz department).

Bottom line is that no one seems to know! Do any of the good folk here have any idea? It seems to me that she should be entitled as she has been contributing.

greenglide

If she has more than 10 years of NI contributions then she will be entitled to a UK state pension when she reaches SPa.

If she is still living in the UK then she will get it paid when she claims, nationality doesnt come into it. If she is living overseas this are more tricky but she will retain her entitlement.

You make have been over complicating things when you asked DWP or asking the wrong department.

reg091

Thanks Greenglide. I struggled to find the right department in their "contact us" info!

Another point though, you say that she only needs to have paid in for 10 years. I have been paying in forever (I have 34 qualifying years) but was told by a NI person last year that I need 35 years (as of changes this April coming I think),

le_loup

35 years for all. 10 years for some.

reg091

Care to explain who the "some" are? Just foreign nationals like my wife?

t0rt0ise

reg091 wrote: »

Care to explain who the "some" are? Just foreign nationals like my wife?

Not some people, but some pension amount. Ten years NI will get you 10/35ths of the pension and so on. Below ten years will get you nothing.

jamesd

10 years is the minimum to get anything. 35 years is the number of a years a person who spends their working life only in the flat rate scheme will have to pay in in order to get the maximum flat rate amount.

A person who has been paying into the current system and not contracted out would normally have built up an entitlement that is higher for each year worked than the flat rate accrual rate, so would normally need less than 35 years. A person who was contracted out could work years beyond 35 to get to the flat rate maximum, in addition they would get their pension from being contracted out.

The International Pension Centre is the place to go for many state pension questions if you've lived abroad.

There are two quite useful services that are in beta:

Check your State Pension
Personal tax account

The state pension check will tell her what her actual current entitlement is and how long it will take her to get to the maximum under the new rules.

Every UK tax payer has a personal tax account linked to their National Insurance number. That service can be used to notify HMRC of changes in income projections to get a new tax code and to check on some of the information that HMRC has about income, more to be added later. For both services you will need a mobile phone at present because a code is sent by text message to the phone every time you log in. More options are expected later.

JezR

Get a pension statement - for each of you.

https://www.tax.service.gov.uk/checkmystatepension (beta service, requires GOV.UK Verify sign in. Once completed information comes on screen).

otherwise

https://www.gov.uk/state-pension-statement (requires sending a form in by post or phone call. Statement received by post)

reg091

Thanks JamesD. I didn't know that there were lesser amounts of SP payable if you haven't contributed enough. I always assumed that you had to pay a number of qualifying years to get "a pension" and if you hadn't paid enough of those years then you just got nothing. It sounds like, from what you are saying, that a person could pay in ten years and get a SP of £x but a person who paid in for 35 years would get £more?

Secondly, you talk about different amounts of years needed to get the maximum payment dependent on if you contracted out or not. I contracted out back in the 80's (probably) when (I thought) it was talked up as being a better thing to do. From what you are saying it sounds like that the opposite is true.

The last time I got a pension statement (maybe five years ago) it seemed to suggest that I would get the full SP. I took that to mean that if I stopped working then I was guaranteed (assuming SP still exists when I reach whatever age it is then...) the maximum SP. I appreciate that they have now added another five years to that qualifying period.

jamesd

reg091 wrote: »

It sounds like, from what you are saying, that a person could pay in ten years and get a SP of £x but a person who paid in for 35 years would get £more?

Right. Each year worked from 6 April 2016 onwards adds 1/35th of the maximum flat rate to the pension. That stops when you reach the maximum if it's sooner or carries on for more than 35 years in total if it takes longer. A the current rate that's an extra £4.44 a week in state pension for each year worked.

A person who has already reached the £155.65 level gets nothing more but they also don't have the extra immediately removed. Instead the part above the maximum flat rate increases at CPI while the main flat rate part has the triple lock.

reg091 wrote: »

Secondly, you talk about different amounts of years needed to get the maximum payment dependent on if you contracted out or not. I contracted out back in the 80's (probably) when (I thought) it was talked up as being a better thing to do. From what you are saying it sounds like that the opposite is true.

Congratulations! You're a likely winner from the pension changes, most who contracted out are.

Say you didn't contract out, your entitlement would stop once you reached the flat rate maximum, normally say 35 years. That could be at age 53. Carry on working until state pension age and that person would still have to pay NI but would get no extra state pension from it. Unlike you. You continue to get more for the extra years until you reach either the flat rate maximum or state pension age. And you get your contracted out pension on top. So they get £155.65 while you get £155.65 plus your contracted out pension. Assuming that there are enough years to get you to the £155.65 limit.

reg091 wrote: »

The last time I got a pension statement (maybe five years ago) it seemed to suggest that I would get the full SP. I took that to mean that if I stopped working then I was guaranteed (assuming SP still exists when I reach whatever age it is then...) the maximum SP. I appreciate that they have now added another five years to that qualifying period.

If you get one today it'll probably say that you will get £155.65 a week in total, the current money value of the full flat rate.

reg091

Thanks JamesD. However, I stopped working three years ago (been looking after young son, and have transferred NI credits from wife's child benefit account to me for two of those years). I am 54 now and I was vaguely basking in the knowledge that I had paid enough in to get my full SP and so there was "no point" in working any more as paying any further NI would be pointless as it would have no effect on the amount of SP. Now it sounds like if I went back to work I could increase the amount of SP, Drat!

Edit: just checked on the (excellent) beta pension forecast website and it says forecast of £155.65 but only if I pay for another 13 years. Currently it shows as £129.61. (35 full years, 3 incomplete). What is not clear is do I need to pay for each of those 13 years to reach the £155 (in other words I would have paid 48 years).