Will I get any state Pension?

JAG61

Hi there

As some people will be aware I am in New Zealand and am trying to sort out my UK pensions DB,DC and state- some queries are on other threads.

This week I have found out that if I require a New Zealand pension I need to apply for my UK pension as they use a clause called Section 70 - Direct Deduction Policy where they can deduct any NZ State Pension dollar for dollar due to an overseas pension they deem to be "analogues" (Some DB and DC can be considered fair game). On looking into my pensions over a year ago this policy was not transparent.

Before the changes to the Pension system I was advised to get a Statement and the Statement said I had 20 years NI and that I would get part of the Basic Pension 75 pounds a week. I was contracted out so received no Additional Pension.

I looked at the paperwork again yesterday and could not work out if I will qualify under the new system as I was unsure of the calculation due to the contracting out.

Can anyone advise if I still qualify thank you.

xylophone

Get a new state pension statement to be sure of your situation.

https://www.gov.uk/check-state-pension

JAG61

Thanks Xylophone.

It was a huge shock finding that Section 70. Not only do they use "analogues" overseas pensions dollar for dollar to wipe out my NZ Pension entitlement they also use any remainder for my husbands
too.

I will get us both a Statement Thanks.

JAG61

Yes this statement is needed for two reasons as we also need to know the state of our UK Pension if we return home as NZ will not pay us any Pension if we leave NZ.

xylophone

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

I was looking at this http://www.workingin-newzealand.com/money-and-costs/transfer-your-pension/overview#.V7t455MrKSM

It may be somewhat outdated - certainly predates "pension freedom" in the UK but I was struck by the information on declaring growth in a pension in a UK scheme to NZIR- is this the case?

JAG61

Hi Xylophone

When we use the QROPS transfer we pay no tax in the UK it comes over here then we have to pay tax at our normal tax rates. The rules regarding taxation have recently changed.

https://www.ird.govt.nz/resources/b/e/be0558004ba3d583b2a1bf9ef8e4b077/ir257.pdf

https://www.ird.govt.nz/resources/4/3/438c06804ba3d58ab2c9bf9ef8e4b077/ir258.pdf




They found people had not been declaring their tax so decided it better to apply tax when the pension comes over. Many Ex UK people have been caught out as the IRD (taxman) wants the payment from the year it comes over but some folk will not have assess to their funds until 55 (30%). ( The rules are changing 1 Dec 2016 new rules (10%) at 55). They were probably unaware of the situation and transferred after the four years exemption period. We had to fund my husbands transfer for about 6 months before the 30% retirement funds came in. I could not move my Barclays DB at the time as I would not have been able to fund the tax owed. The DC should fund itself as it is a lower amount and should pay out at 55 if I transfer in time. I could QROPS the DB but to be honest I have not got the nerve. CETV was 178K. Tax would be huge.

How much tax you pay is shown in the first document above I have to declare 16 years worth so 67% of its transfer value which includes the redress due to the pension review and my contributions there is no 25% tax free sum.

If people are thinking of leaving the UK they need to look at the pension systems very carefully in any country.

JAG61

I should also add that once transferred the investment gains are taxed. In a PIE scheme at your normal tax rate but with the advantage of a 28% limit if you are a higher tax payer (30%,33%) when you withdraw your money it is not taxed. Not sure of the draw down options and like I say they are changing. We use a specialist who also gives excellent after transfer advice regarding any changes. You don't need to transfer you can also keep your money in the UK and declare your income on your NZ tax form when the pension or annuity is in payment declaring the full amount. I am not sure what would happen if we moved back home I am guessing the QROPS would get taxed on any withdrawals.

xylophone

After all your deliberations you have now decided to transfer your (is it 2) DC pensions to the QROPS ( presumably before December) and wait to take your deferred Barclays pension until scheme pension age?

Have you been in touch with the Barclays Scheme Administrator?

With regard to your UK state pension, you will be aware ( I suppose you will have heard it discussed by fellow Britons) that it will not be annually uprated once in payment unless you return to the UK.

I should think that on return to the UK, withdrawals from a QROPS would just be taxed as income just as withdrawals from a UK scheme would be, but your specialist will know the answer to that?

But you won't wish to return? I've been reading this http://www.telegraph.co.uk/expat/before-you-go/11192243/Retiring-to-New-Zealand-what-you-need-to-know.html

- the retiree's Paradise?:)

JAG61

Hi there Xylophone

Yes I think the best option is the QROPS for the DC hoping to get in before the deadline.
Revaluation has come in for the Formula Method ( look at your IR257) so that is now an option.

I have illustrations outstanding with TW re Barclays DB - keep it in the UK and declare tax when in pension maybe take the 25% lump sum. I will post when I get the information

UK Pension statement for me and hubby on its way - lovely guy on the Future Pensions helpline. Had a giggle because I couldn't remember when I got married its either 28 years today or next week.

I will post when I get some more info.

xylophone

. Had a giggle because I couldn't remember when I got married its either 28 years today or next week.

Not a day best forgotten?:eek:

neilvw

xylophone wrote: »

Not a day best forgotten?:eek:

I asked my brother for his date of marriage when submitting his request for a SP statement. He got the date right, but the month and year wrong! I made sure not to ask him in earshot of his wife :rotfl: