State pension rights for UK citizen who worked 16 years in EU

Chotacabras

I am a UK citizen. I paid NI-analogue contributions in Spain (Seguridad Social) for 16 years during the EU period. I have lived in the UK since before 2020. I have 20 years of UK NI contributions.

According to gov.uk's International Pension Centre, my years of Spanish contribution can be taken into account to reach the minimum UK years-of-contribution threshold of 10 years (which I have reached already), but will NOT be considered in calculating the amount of my entitlement beyond the threshold.

However, according to a very detailed and helpful response from the EU's "Your Europe Advice" swrvice, the Withdrawal Agreement states that the UK authorities should take my years of Spanish contribution fully into account, as if they were UK contributions (Regulation 883/2024).

I'd be really interested to hear from others in a similar boat, or who have a view on which interpretation is correct.        

p00hsticks

Are you not entitled to a Spanish pension ?

Chotacabras

As I understand it (I may be wrong), I'm only entitled to a Spanish pension if I return to to Spain and work/contribute for the 2 years immediately before reaching pension age in 2029. Evidently, post-Brexit I no longer have the automatic right to reside and work in Spain, and my preference would be to remain in the UK (though certainly I don't rule out returning to Spain). 

eastcorkram

I don't know the Spanish system, but as far as I'm aware, you'd get a partial Spanish state pension. I'm not sure of the minimum requirement, but if you have 16 years, I'm sure that would qualify. 

Chotacabras

Many thanks poohsticks and eastcorkram! As noted, my current understanding from Spanish authorities is that I'm only eligible for Spanish state pension if I return and stay there from latest 2027 on. It might be possible for me, and I will consider it.

But I'd specifically like to clarify the question in my original post: if I stay in the UK, is UK government obliged to treat my Spanish contribution years as if they were UK contribution years? Or not?   

molerat

You may be able to buy class 2 for the period from 2006-07 which would boost your UK pension.

Social Security abroad: NI38 - GOV.UK

UK will not be paying any UK pension for your contributions in Spain, you should be able to claim any Spanish pension here.

https://europa.eu/youreurope/citizens/work/retire-abroad/state-pensions-abroad/index_en.htm

Chotacabras

Thank you molerat. I'm sorry to hammer away at this, but as far as I can see the link you give (to YourEurope) does not support your assertion that "UK will not be paying any UK pension for whilst you were making contributions in Spain". In fact this link says "Each pension authority will calculate the part of the pension it should pay taking into account periods completed in all EU countries. To do so, it will add together the periods you completed in all EU countries and work out how much pension you would get had you contributed into its own scheme over the entire time (called the theoretical amount). This amount will then be adjusted to reflect the actual time you were covered in that country (called the pro-rata benefit)." And if I understand correctly, the Withdrawal Agreement states that this system should apply to UK citizens. Certainly, it's possible that you're right: but it's not what this link says

Early_Retire_Free

My understanding from almost 20 years living in Germany is that post Brexit you will get both pensions.  This is called double dipping and is one of the (very few) benefits of Brexit.

I don't know the rules in Spain specifically but I would imagine they are similar to the rest of the EU and you will get a proportionate pension.  If you write to the Spanish authorities they will tell you how much that is.  In Germany, you accumlate pension credits in terms of points and then each year the authorites say how much the value is per point.  The rule you quote about having to work in Spain for two years immediately prior to retirement is new to me - do you have a reference - it seems a little odd.

In terms of the UK, you have the right to close any contribution gap and for period when you were overseas, you can pay class 2 national insurance contributions (which are current £3.45 per week - i.e. very much cheaper than class one), when I returned to the UK in 2018, I paid to fill around 15 years of missing contributions.

pinnks

Early_Retire_Free said:

My understanding from almost 20 years living in Germany is that post Brexit you will get both pensions.  This is called double dipping and is one of the (very few) benefits of Brexit.

I don't know the rules in Spain specifically but I would imagine they are similar to the rest of the EU and you will get a proportionate pension.  If you write to the Spanish authorities they will tell you how much that is.  In Germany, you accumlate pension credits in terms of points and then each year the authorites say how much the value is per point.  The rule you quote about having to work in Spain for two years immediately prior to retirement is new to me - do you have a reference - it seems a little odd.

In terms of the UK, you have the right to close any contribution gap and for period when you were overseas, you can pay class 2 national insurance contributions (which are current £3.45 per week - i.e. very much cheaper than class one), when I returned to the UK in 2018, I paid to fill around 15 years of missing contributions.

I fail to see how retaining the EU rules on the coordination of social security systems, i.e. the rules about aggregation of contribution periods in each country to ensure you are not disadvantaged for pension purposes by exercising your EU freedoms can be classed as a Brexit win.  We are fortunate not to have lost those rights as a result of Brexit!

I also fail to see how this can be described as double-dipping but everyone to their own! 

pinnks

Chotacabras said:

Thank you molerat. I'm sorry to hammer away at this, but as far as I can see the link you give (to YourEurope) does not support your assertion that "UK will not be paying any UK pension for whilst you were making contributions in Spain". In fact this link says "Each pension authority will calculate the part of the pension it should pay taking into account periods completed in all EU countries. To do so, it will add together the periods you completed in all EU countries and work out how much pension you would get had you contributed into its own scheme over the entire time (called the theoretical amount). This amount will then be adjusted to reflect the actual time you were covered in that country (called the pro-rata benefit)." And if I understand correctly, the Withdrawal Agreement states that this system should apply to UK citizens. Certainly, it's possible that you're right: but it's not what this link says

You are clearly covered by the EU Withdrawal Agreement so nothing changes in terms of your pension rights and you will get a pension from every EU/UK country in which you have a contribution record.

Each country will undertake 2 calculations and pay you the higher amount as your pension.  The calculations are:

1. a pension based solely on your contribution record in that country, so nil if you do not meet the minimum contribution period like the UK's 10 years

2. a theoretical amount of pension based on the assumption that all of your contribution periods we made in the country performing the calculation.  If any periods from different countries overlap, e.g. you have paid UK voluntary NI, then the foreign period is disregarded in favour of the domestic period.  This gets you past the minimum period requirements.  This theoretical amount is then pro-rated based on your actual contribution record in the country. 

In the case of the UK, the maths of 1 and 2 is always identical as soon as you have at least 10 UK years, which is why the UK says they do not do the calculation. Let's assume 10 UK years and 25 other years with no overlaps (ignore the 2016 changes to the UK system for simplicity)

1. a pension based on 10 UK years is 10 / 35 x  £221.20 = £63.20 per week

2. a theoretical amount on the assumption that all years were contributed in the UK, so (10+35) / 35 x £221.20 = £221.20.  This is then pro-rated based on your UK record, so 10/35 x £221.20 = £63.20
 
For Spain the calculation would be similar except that Spain has a minimum requirement of 15 years and you must have a contribution record in at least 2 of your final 15 years.  If, you contributed your 25 years in Spain, then did whatever for 5 years and then moved to the UK and made your 10 UK years of NI contributions you would get:

1. a Spanish pension based on 25 years but with 0 years contributed in your final 15, so nil

2. a theoretical amount based on 25+10 years, of which all 10 fall in the final 15, so a theoretical amount greater than zero and a pro-rata amount also greater than zero.

You end up with 2 pensions - one from the UK and one from Spain. 

Chotacabras

Thank you so much for these very helpful responses. I think you are probably right Early_Retire_Free and pinnks, I think the Spanish requirement is 2-years-contribution-in-final-15 years, not (as I had understood) final-2-years-contribution: either way, I think (?) I'd need to move back to Spain for at least 2 years to get Spanish pension. Anyway, I will study your responses carefully, and try to work out the best way forward. Many thanks, really helpful!