Brit moving to Canada need pension advice

berserker

I'm emmigrating to Canada.

and wondered if I need to consider paying NI so I get a Brit Pension or not ?

I don't plan to come back to the Uk, But wondered if I need to consider anything.

I have been working for 20 years and paying NI during that time


any help guys

thanks

EdInvestor

Certainly worth it: you will only have to pay around 2 pounds a wekk for 10 years to get a full basic state pension, a bargain.

Note that under current rules Canada is one of the countries where it won't be index linked for inflation when you draw it. Things may have changed by then of course.

berserker

Thanks for the advice

Will I still be able to claim the pension if i'm a canadian resident?

and can i Pay the NI in one yearly sum?

EdInvestor

Yes and yes.

berserker

Thanks Ed thats a great help

Cook_County

Ed forgot to say you can continue to pay into a UK stakeholder plan and get a 22% tax gift from the UK into the plan for the first 5 years of non-UK residence. You will however want Canadian advice as to whether Canada will tax growth within the UK pension plan.

berserker

So by the sounds of it I could load a stakeholder pension over the next 5 years. then leave it and take the 22% tax gift when i retire.

Obviously depending what canada will do.


by tax gift i take it the first 22% of the lump sum is tax free?

Cook_County

No - the maximum contribution is usually £3,600 but you only have to pay £2,808 at the moment (after 22%) going down next April to 20%.

berserker

Ah Thanks Cook.

I'm 35 do you think its worth investing in pensions. I have the feeling when i'm old and wrinkly there not going to be worth much?

dunstonh

I'm 35 do you think its worth investing in pensions. I have the feeling when i'm old and wrinkly there not going to be worth much?

A pension is just a tax wrapper. It doesnt make a penny. Its the investments inside that tax wrapper that make the money. So, unless you intend finding 32 years worth of the worst investments possible then you havent anything to worry about.

Cook_County

dunstonh wrote: »

A pension is just a tax wrapper. It doesnt make a penny. Its the investments inside that tax wrapper that make the money. So, unless you intend finding 32 years worth of the worst investments possible then you havent anything to worry about.

Of course this is the problem - its a wrapper that the Canadians may ignore entirely or tax under the FIE rules. One way of avoiding this might be transfer to a QROPS in Canada if this is feasible.