Barclays closed my current account - warning to other expats

xylophone

Wow! That's tough.

https://www.workandincome.govt.nz/pensions/travelling-or-moving/social-security-agreements/uk-pensions-paid-in-nz-faqs.html#:~:text=What options are available for,contact our International Services team.

If you are entitled to a State Pension or another UK state benefit, generally your New Zealand Superannuation or Veteran's Pension payments will be reduced by the amount of that State Pension or state benefit.

Sections 187-191 of the Social Security Act 2018 set out the requirement for this deduction and Article 15 of the Social Security Agreement between New Zealand and the United Kingdom (the Agreement) largely reflects this. This means that the treatment of UK pensions under the Agreement is generally consistent with the treatment of overseas pensions from other countries.

This ensures that all New Zealanders - regardless of whether they've lived overseas and are entitled to an overseas pension - get an equitable amount of state retirement pension. It would take you 35 years to become entitled to the full amount of UK pension, whereas it takes only 10 years of living in New Zealand before you become entitled to the full rate of New Zealand Superannuation. If you received a partial UK pension as well as full New Zealand Superannuation or Veteran's Pension you would receive more state retirement pension than lifelong New Zealand residents, who have contributed through their taxes to the funding of New Zealand Superannuation for a longer period of time.

Changes in New Zealand from 9 November 2020 mean any part of an overseas pension which has been gained from making voluntary contributions is not deducted from New Zealand Superannuation, Veteran's Pension or any other New Zealand main benefits. However the voluntary portion is treated as income for any other income tested benefits in New Zealand.

 In the US they don't reduce Social Security payments if you get a UK SP and it also gets inflation adjustments..

It really is no wonder that those who have emigrated to such countries as NZ/Australia/New Zealand are labouring under a strong sense of grievance.

xylophone

Thanks. I don't qualify for the state pension for a few years yet. And because of the reciprocal arrangements with NZ, it will be frozen at the level it was when I left in 2016. But  when I qualify for the NZ pension they will simply deduct anything I get from the UK anyway.

OP, have you applied for a UK state pension forecast?

If so, what exactly does it say?

Does it show that you are entitled to a full NSP?

I note from the NZ Gov site linked above

The amount of State Pension paid to pensioners living in New Zealand and some other countries is "frozen". This means that your State Pension is paid at the same rate as it was when you first became entitled to it, or at the rate you were being paid when you left the UK for New Zealand, if you were already receiving your UK pension on that date.

Would it be possible to improve your UK SP by making voluntary contributions?

Changes in New Zealand from 9 November 2020 mean any part of an overseas pension which has been gained from making voluntary contributions is not deducted from New Zealand Superannuation, Veteran's Pension or any other New Zealand main benefits. However the voluntary portion is treated as income for any other income tested benefits in New Zealand.

Would it be worth checking your situation with the International Pensions Centre/Future Pensions Centre?

Bostonerimus1

xylophone said:

Wow! That's tough.

https://www.workandincome.govt.nz/pensions/travelling-or-moving/social-security-agreements/uk-pensions-paid-in-nz-faqs.html#:~:text=What options are available for,contact our International Services team.

If you are entitled to a State Pension or another UK state benefit, generally your New Zealand Superannuation or Veteran's Pension payments will be reduced by the amount of that State Pension or state benefit.

Sections 187-191 of the Social Security Act 2018 set out the requirement for this deduction and Article 15 of the Social Security Agreement between New Zealand and the United Kingdom (the Agreement) largely reflects this. This means that the treatment of UK pensions under the Agreement is generally consistent with the treatment of overseas pensions from other countries.

This ensures that all New Zealanders - regardless of whether they've lived overseas and are entitled to an overseas pension - get an equitable amount of state retirement pension. It would take you 35 years to become entitled to the full amount of UK pension, whereas it takes only 10 years of living in New Zealand before you become entitled to the full rate of New Zealand Superannuation. If you received a partial UK pension as well as full New Zealand Superannuation or Veteran's Pension you would receive more state retirement pension than lifelong New Zealand residents, who have contributed through their taxes to the funding of New Zealand Superannuation for a longer period of time.

Changes in New Zealand from 9 November 2020 mean any part of an overseas pension which has been gained from making voluntary contributions is not deducted from New Zealand Superannuation, Veteran's Pension or any other New Zealand main benefits. However the voluntary portion is treated as income for any other income tested benefits in New Zealand.

 In the US they don't reduce Social Security payments if you get a UK SP and it also gets inflation adjustments..

It really is no wonder that those who have emigrated to such countries as NZ/Australia/New Zealand are labouring under a strong sense of grievance.

I can see the egalitarian argument and it's strengthened if you qualify for full NZ superannuation in just 10 years. The US actually does have a similar graduated reduction in Social Security payments if you have less than 30 years of SS tax payments and receive a pension funded by payments that were not subject to SS tax. As my UK SP payments are entirely from automatic credits while at college and voluntary payments it won't change my US SS, but I also have a pension from a US state that I worked for and that will reduce my US SS cheque. Being an expat really ripples through your finances and the OP's banking issues are just a sample of the complications of having to deal with cross border finances.

GeordieinAotearoa

Thanks everyone for all your suggestions on pensions. Yes I have had a UK pensions forecast. I have direct access to these via my HMRC account (I still file tax returns!) I'm not going to answer all the points made except to say, in summary - 'it's complicated'. For a start, we don't know for sure which country will continue to be our main residence. Anyone who has married a foreign national and therefore has a 'foot in two camps' will know what a curse as well as a blessing this can be, especially when parents start ageing and getting sick - this can involve various extended relocations. I have no grievances though - I knew the score before I came out here, and I wouldn't change a thing. Except the bank I chose to have my current account with! 

GeordieinAotearoa

wmb194 said:

GeordieinAotearoa said:

wmb194 said:

GeordieinAotearoa said:

friolento said:

GeordieinAotearoa said:

friolento said:

You never said what happened when you asked your pension provider to pay into your Wise account.

I don't have a Wise account. 

It takes less than 2 minutes to open one

I did look at this but I feel very unsure about it. After talking to my pension provider I have decided to have my payments made to NZ. Not ideal but it will do for now until we visit the UK next year. Once in the country we can convert my spouse's Halifax account into a joint one. This can only be done in branch.

What makes you unsure about it? It's a legitimate business - listed on the LSE if you want to look it up - and I use it regularly to receive transfers from the US and it offers very competitive fx rates and fees.. Wise offers a NZD account so if you could open an account it sounds like it would be ideal for you.

I dunno. I've read their website info and it says things like 'we are a payment provider, not a bank' - and I can't quite get my head around what that means and what any consequences of this might be. I actually asked my pension provider about it; they said they had never heard of Wise and couldn't confirm whether it would be acceptable. That was enough for me to go no further. I didn't want to waste time and effort on something that might not work out.

It's a currency exchange and it's very well known. Your money only needs to be there for moments - deposited as sterling, convert to NZD and then out. Apparently it has an arrangement with a NZ bank so transfers out should be as a local and shouldn't attract any extra fees. It's free to open an account so you don't really have anything to lose by pursuing it.

I don't really need a currency exchange facility. I've now arranged for my pension to be paid directly to NZ. What I really wanted was to be able to leave it to accumulate in a UK bank so I could service things over there (to do with my flat, etc).

friolento

GeordieinAotearoa said: I don't really need a currency exchange facility. I've now arranged for my pension to be paid directly to NZ.  

So you let banks do your currency exchange, at the rates and costs they charge. You’d almost certainly get a better deal if you used Wise but it is clearly not an option you would consider.

wmb194

GeordieinAotearoa said:

wmb194 said:

GeordieinAotearoa said:

wmb194 said:

GeordieinAotearoa said:

friolento said:

GeordieinAotearoa said:

friolento said:

You never said what happened when you asked your pension provider to pay into your Wise account.

I don't have a Wise account. 

It takes less than 2 minutes to open one

I did look at this but I feel very unsure about it. After talking to my pension provider I have decided to have my payments made to NZ. Not ideal but it will do for now until we visit the UK next year. Once in the country we can convert my spouse's Halifax account into a joint one. This can only be done in branch.

What makes you unsure about it? It's a legitimate business - listed on the LSE if you want to look it up - and I use it regularly to receive transfers from the US and it offers very competitive fx rates and fees.. Wise offers a NZD account so if you could open an account it sounds like it would be ideal for you.

I dunno. I've read their website info and it says things like 'we are a payment provider, not a bank' - and I can't quite get my head around what that means and what any consequences of this might be. I actually asked my pension provider about it; they said they had never heard of Wise and couldn't confirm whether it would be acceptable. That was enough for me to go no further. I didn't want to waste time and effort on something that might not work out.

It's a currency exchange and it's very well known. Your money only needs to be there for moments - deposited as sterling, convert to NZD and then out. Apparently it has an arrangement with a NZ bank so transfers out should be as a local and shouldn't attract any extra fees. It's free to open an account so you don't really have anything to lose by pursuing it.

I don't really need a currency exchange facility. I've now arranged for my pension to be paid directly to NZ. What I really wanted was to be able to leave it to accumulate in a UK bank so I could service things over there (to do with my flat, etc).

You can do that and it has an option where your money would be invested in a Blackrock money market type fund to keep it safe but even if you don't I'd wager a lot that it'll give you a much better exchange rate than your bank. If you want you can also get a debit card.

https://wise.com/gb/card/

GeordieinAotearoa

friolento said:

GeordieinAotearoa said: I don't really need a currency exchange facility. I've now arranged for my pension to be paid directly to NZ.  

So you let banks do your currency exchange, at the rates and costs they charge. You’d almost certainly get a better deal if you used Wise but it is clearly not an option you would consider.

I just don't have the need. I hardly ever exchange currency. Why the persistence? Do you work for them?

GeoffTF

GeordieinAotearoa said:

I hardly ever exchange currency.

I got the impression that your pension is paid in British pounds, and that you convert into New Zealand dollars. Is that not right?

wmb194

GeordieinAotearoa said:

friolento said:

GeordieinAotearoa said: I don't really need a currency exchange facility. I've now arranged for my pension to be paid directly to NZ.  

So you let banks do your currency exchange, at the rates and costs they charge. You’d almost certainly get a better deal if you used Wise but it is clearly not an option you would consider.

I just don't have the need. I hardly ever exchange currency. Why the persistence? Do you work for them?

If you're now going to have your pension transferred to bank in NZ is it being converted or will it be held in sterling?