non UK citizen, should I pay for my pension?

Pietruzzo

Hello,

my wife and I are not UK citizens and we don't really have any plans to retire here, in fact we are here until a better opportunity arise somewhere else outside of the EU.

I have already paid 3% of two years of my previous job's salary in pension, and now with this new one I am paying 5%, while my employer is also contributing an additional 5%. Should I decide to stop paying for it, my employer will basically do the same.

Is it worth to keep paying for my pension, which is about £150 per month, considering my wife and I do not intend to retire in this country? If not, what other alternatives do we have to have some pension like retirement plan?

Does anyone know what is the minimum amount of pension contribution years one is supposed to pay in order to be entitled to receive pension one day?

And what if we do not complete the minimum contribution years? Will we be able to cash out what we have paid or will lose it all?

I appreciate your help

jonesMUFCforever

Do you not have the option to opt out?

I do not think you will get anything back until you are pensionable age OR you tell your employer that you were not eligible to enter into from the beginning you might get something back but with a tax bill.

p00hsticks

Pietruzzo wrote: »

Is it worth to keep paying for my pension, which is about £150 per month, considering my wife and I do not intend to retire in this country? If not, what other alternatives do we have to have some pension like retirement plan?

If you stop paying into the pension you'll miss out on your employers contributions and the tax advantages.

Pietruzzo wrote: »

Does anyone know what is the minimum amount of pension contribution years one is supposed to pay in order to be entitled to receive pension one day?

For the private company pension it will depend on the particular scheme rules, but you will usually be entitled to a pension from day one (most pensions these days simply invest the contributions in a pot which you can withdraw money from when you reach a certain age - currently 55).

If you leave employment after a short time you can sometimes get your contributions refunded, but as you will only get your contribution back, less the tax you would have paid on it, it;s usually advisable to leave it in the pension until you are ready to retire.

To qualify for a UK state pension you need a minimum of ten years National Insurance contributions.

Pietruzzo wrote: »

And what if we do not complete the minimum contribution years? Will we be able to cash out what we have paid or will lose it all?

There are countries with reciprical agreements with the UK whereby your NI record here can be counted towards pensions there, but without knowing which country you're going to end up in it's not possible to say whether you would benefit.

But as National Insurance is a compulsory tax and goes towards other benefits there is no way you can avoid paying it and you won't get a refund if you don;t get the ten years necessary for a pension.

nigelbb

p00hsticks wrote: »

To qualify for a UK state pension you need a minimum of ten years National Insurance contributions.

You need a total of ten years contributions in the UK or another EU country to qualify for a UK state pension. You need 35 years for a full UK state pension but if you paid in less years then the pension is paid pro rata e.g. if you work in the UK for seven years you are entitled to 20% of the full pension.

In the OP's case if they leave the UK some time in the future to work in another EU country it probably won't be worthwhile continuing to pay in to their current private pension as there wouldn't be any employer contribution & they should be making pension provisions in the country they move to.

Don't forget to keep details of all the pensions for when the time comes to claim.

Voyager2002

You need to check the details of your pension scheme, and do not confuse an employer's scheme with National Insurance.

With most (all?) employer's schemes, all the money paid in by you and your employer plus tax relief can be withdrawn once you are 55, or will provide an income for you. It makes no difference whether you worked there for one day or for twenty years (except that the longer you worked for them, the more money you have). And of course the pension can be paid to you anywhere in the world.

If you take the money back before you are 55 you can get back the amounts that you paid in, but not the employer contributions and not the tax relief.

With National Insurance, you need to pay for at least ten years to receive any pension. There may be options to pay at reduced rates for years when you are working abroad; and if you ever return to the UK you will be offered the option to pay for up to six years that you have missed. Generally paying these missing years offers an excellent return on the money.

HappyHarry

Pietruzzo wrote: »

I have already paid 3% of two years of my previous job's salary in pension, and now with this new one I am paying 5%, while my employer is also contributing an additional 5%. Should I decide to stop paying for it, my employer will basically do the same.

Is it worth to keep paying for my pension, which is about £150 per month, considering my wife and I do not intend to retire in this country?

From your original post, it looks like you are talking about your employer's pension rather than the state pension.

For an employer's pension, there is no minimum period. You put money in, your employer puts money in, you get some tax-relief added, and when you are 55 or older, you can take it out (albeit potenitially paying some tax).

So, even if you are nor resident in the UK at the time you want to draw it, you can still access it. This matters not whether the pot is worth £1,000 at the time or £100,000. It's yours, it will always be yours, and it's a tax-efficient way of saving for the future.

Think of it as a savings plan that your employer will add to for you.

Opting-out would be a crazy thing to do.

HappyHarry

Voyager2002 wrote: »

If you take the money back before you are 55 you can get back the amounts that you paid in, but not the employer contributions and not the tax relief.

No. The OP will need to wait until they are at least 55.

nigelbb

Voyager2002 wrote: »

With National Insurance, you need to pay for at least ten years to receive any pension.

However this is not ten years of contributions in the UK but ten years of contributions in the EU including the UK. For all we know the OP may already have ten years of contributions in other EU countries.

Albermarle

Does anyone know what is the minimum amount of pension contribution years one is supposed to pay in order to be entitled to receive pension one day?

Just for 100% clarity:
For the pension you are paying into with your employer, the amount of time/years you pay into it is not relevant . A Pot of money builds up that can be used later as a pension . Obviously the longer you work for the employer the more money goes into it . When you leave the job and/or the UK the money will still be there for you to be able to use when you are >55.
Please make sure that when you move address that you inform the pension company involved of your new address.

p00hsticks

HappyHarry wrote: »

No. The OP will need to wait until they are at least 55.

It depends - I beleive there is an option to get your contributions back straight away if you leave after only a short period of time (I think under two years).

But as Voyager2002 says, this will only be the employees contributions, not the employers, and there will be tax and NI deducted as if the money had not been paid into the pension in the first place.

AnotherJoe

Pietruzzo wrote: »

Hello,

my wife and I are not UK citizens and we don't really have any plans to retire here, in fact we are here until a better opportunity arise somewhere else outside of the EU.

I have already paid 3% of two years of my previous job's salary in pension, and now with this new one I am paying 5%, while my employer is also contributing an additional 5%. Should I decide to stop paying for it, my employer will basically do the same.

Is it worth to keep paying for my pension, which is about £150 per month, considering my wife and I do not intend to retire in this country? If not, what other alternatives do we have to have some pension like retirement plan?

Does anyone know what is the minimum amount of pension contribution years one is supposed to pay in order to be entitled to receive pension one day?

And what if we do not complete the minimum contribution years? Will we be able to cash out what we have paid or will lose it all?

I appreciate your help

I would say on balance, yes.
At present you are getting £300 a month in your company pension. When you are 55 (or maybe 57 who knows) you'll be able to access that wherever you are.
If you didn't take it, you wont be getting £150 a month extra. It will likely be somewhere nearer to £100 after tax and NI.
So, if you did save up for a pension, you'll only have 1/3 as much. Now, to be fair, you can probably access it earlier than a pension, but on the other hand having 3x as much is probably worth it.