non UK citizen, should I pay for my pension?

HappyHarry

p00hsticks wrote: »

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.

Only if the new employer runs a DB scheme, precious few of which are available for new employees now, and none which only have 5% employee contributions.


The two year rule for DC schemes stopped a few years ago.

harshitguptaiitr

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.

Check if the country you wish to retire is on the QROPS list at: https://www.gov.uk/guidance/check-the-recognised-overseas-pension-schemes-notification-list - the list is dynamic and subject to change.

If your country is on the list, then contribute, else don't.

Also if you can, check with your current employer if they will let you bring pension pot from previous employers. This will make sure you don't have too many pension accounts to deal with from outside the UK (if and when you do leave the country).

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 your country is on the list above, put money in workplace pension scheme. With the information given, it is difficult to suggest on an online forum for alternate saving plans for retirement.

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?

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?

For workplace pension scheme (minimum drawdown age 55), there is no minimum number of years or minimum amount. However for UK state pension (minimum drawdown age 68) - you need to have 10 qualifying years.

nigelbb

harshitguptaiitr wrote: »

Check if the country you wish to retire is on the QROPS list at: https://www.gov.uk/guidance/check-the-recognised-overseas-pension-schemes-notification-list - the list is dynamic and subject to change.

If your country is on the list, then contribute, else don't.

On what basis you do give this advice? This is a list of countries with pension schemes that you can transfer out from a UK pension without incurring tax penalties. However there is no tax penalty in keeping a UK workplace pension & taking a pension in retirement in another country.

harshitguptaiitr wrote: »

If your country is on the list above, put money in workplace pension scheme.

Again this advice makes no sense. If you opt out of the UK workplace pension then you miss out on the employer contributions & the tax rebate on contributions. There is no issue with contributing towards a UK workplace pension for some years then drawing that pension after age 55 while living in another country.

harshitguptaiitr wrote: »

For workplace pension scheme (minimum drawdown age 55), there is no minimum number of years or minimum amount. However for UK state pension (minimum drawdown age 68) - you need to have 10 qualifying years.

As I already pointed out a couple of times in this thread 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.

If resident in another country when it is the to draw the UK state pension & workplace pension you will pay no UK income tax but the pensions will be subject to tax in the country of residence.

JoeCrystal

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 a retirement plan?

It is most certainly worth paying into a pension pot as you get tax relief on it plus the employer contributions. At very least, it would give you more options when you retire.

mc4924

From your name, I suspect you are Italian, like me, so the (mostly) good advice from the other poster might appear a bit confusing to you (I know that pensions where confusing for me when I moved to the UK).
If this is the case, I hope I can clarify a bit. In UK you normally have two pensions (or more!):

State pension
You (through your employer) pay National Insurance Contributions for this.
This is basically a tax. You have to pay it, based on your earnings, no matter what.
These contributions will entitle you to the (not very big) state pension when you are, say, 67 (the exact age depends on how old you are & other considerations).
The amount you'll get depends on how many years of contributions you will have when you reach the pensionable age.
In general, if you have less than 10 years you get nothing, but, if you are an EU citizen, you can count contribution years in other EU countries for this (not for the amount you get, just for the 10 year threshold).

Company Pension
This is some kind of private pension scheme set up by your employer. The employer has to set it up and also has to automatically enrol you and pay at least 3% of your salary in it, but you can explicitly ask to stop it.
The exact details of this pension will depend on the scheme your employer has (there are many many different ones) but I can guess it will very likely be a DC (Defined Contribution) scheme, where basically all the contributions go to some type of investment fund.
When you will start drawing this pension the investment will have hopefully grown to a nice amount and you will be able to get the money out of the fund (in a couple or three different ways).
You will not be able to start drawing this pension before you are 55 (this will soon increase to 57).
Is it worth paying into this? I'd say that it probably is, even if you are not planning to retire in the UK.
As the other posters have said, if you are putting £150 monthly in the pension, and you stop, you will likely just get about £100 net additional in your payslip (because the 150 are before tax), while now you are getting £300 a month in your pension (because the employer is paying another 150). So it's the £100 now or £300 (plus the growth due to the investment) when you are 57.