Am I correct in my pension calculations?

normal

I've been trying to plan out my OH's UK state pension. 

They're 46, been living in the UK for 10 years, and have 5 years National Insurance paid (option to pay other 5 years gap). 

They're from the EU, and we plan to move to the EU in the next 2-3 years.

As I understand it, you need to pay at least 10 years contributions in order to claim any sort of UK state pension, so it'd make sense to pay the previous 5 missing years. It also makes sense to pay the next 2-3 years in case the Government decides to change the rules slightly in future.

Presuming we don't return to the UK, they would be entitled to (221.20/35)*12= £75.84 pw at current rates.

And if we returned to the UK they would have to claim pension credits to top up any shortfall.

Am I right in my understanding, or have I missed anything?

Flugelhorn

have they checked the online estimate?

normal

Flugelhorn said:

have they checked the online estimate?

The estimate said they'd receive roughly £171 if they made a further 22 contributions. But that's not exactly applicable in this situation.

Dazed_and_C0nfused

normal said:

I've been trying to plan out my OH's UK state pension. 

They're 46, been living in the UK for 10 years, and have 5 years National Insurance paid (option to pay other 5 years gap). 

They're from the EU, and we plan to move to the EU in the next 2-3 years.

As I understand it, you need to pay at least 10 years contributions in order to claim any sort of UK state pension, so it'd make sense to pay the previous 5 missing years. It also makes sense to pay the next 2-3 years in case the Government decides to change the rules slightly in future.

Presuming we don't return to the UK, they would be entitled to (221.20/35)*12= £75.84 pw at current rates.

And if we returned to the UK they would have to claim pension credits to top up any shortfall.

Am I right in my understanding, or have I missed anything?

Wouldn't that depend on your joint income?

Making additional voluntary contributions might be an option on your (her) return?

molerat

If working overseas they could be eligible to pay class 2 contributions at <£200 per year or if not working class 3 at >£900.  If they already have some EU contributions they would not need 10 to receive a UK pension as the aggregated number could be over 10 so would receive whatever they had earned.

QrizB

normal said:

Am I right in my understanding, or have I missed anything?

You (they) can continue to pay voluntary NI after leaving the UK.

normal

Dazed_and_C0nfused said:

normal said:

I've been trying to plan out my OH's UK state pension. 

They're 46, been living in the UK for 10 years, and have 5 years National Insurance paid (option to pay other 5 years gap). 

They're from the EU, and we plan to move to the EU in the next 2-3 years.

As I understand it, you need to pay at least 10 years contributions in order to claim any sort of UK state pension, so it'd make sense to pay the previous 5 missing years. It also makes sense to pay the next 2-3 years in case the Government decides to change the rules slightly in future.

Presuming we don't return to the UK, they would be entitled to (221.20/35)*12= £75.84 pw at current rates.

And if we returned to the UK they would have to claim pension credits to top up any shortfall.

Am I right in my understanding, or have I missed anything?

Wouldn't that depend on your joint income?

Making additional voluntary contributions might be an option on your (her) return?

Thanks. I'd not thought of that. That means they'd probably not get any pension credits if we did return.

normal

molerat said:

If working overseas they could be eligible to pay class 2 contributions at <£200 per year or if not working class 3 at >£900.  If they already have some EU contributions they would not need 10 to receive a UK pension as the aggregated number could be over 10 so would receive whatever they had earned.

Sorry. I don't quite understand. So they can aggregate the total years contributions between the two countries? Their pension in the EU country would be significantly less than the UK state pension. I had thought that the resident country (at time of retirement) would administer the pension amount paid, rather than contribute towards UK calculations. 

Also I don't understand about Class 2 and Class 3 contributions. Apologies 

BrilliantButScary

Perhaps you'd like to check:
https://www.gov.uk/pension-credit/eligibility

molerat

normal said:

molerat said:

If working overseas they could be eligible to pay class 2 contributions at <£200 per year or if not working class 3 at >£900.  If they already have some EU contributions they would not need 10 to receive a UK pension as the aggregated number could be over 10 so would receive whatever they had earned.

Sorry. I don't quite understand. So they can aggregate the total years contributions between the two countries? Their pension in the EU country would be significantly less than the UK state pension. I had thought that the resident country (at time of retirement) would administer the pension amount paid, rather than contribute towards UK calculations. 

Also I don't understand about Class 2 and Class 3 contributions. Apologies 

Class 2 and class 3 are voluntary contributions.  If she was working in the UK prior to leaving and working overseas then she would be able to buy class 2 for those years overseas at around £200 per year otherwise she would be able to buy class 3 at around £900.

If you have 5 years UK contributions and 5 years EU contributions that means you have a total of 10, enough to claim the 5 UK as a pension, you don't need the whole 10 in UK to qualify.