UK Pension

[Les Woodard]

This is mainly for those of us that live outside of the UK and are getting or about to get a pension from there.

I do not know if I have posted this before so will do it again if I have.

For those that are about to or are getting the UK pension. Due to the latest rules that have come into affect we are allowed to purchase an additional six years of pension. For me that was Nearly seven thousand dollars. This will get me about twenty dollars a week more pension. As my wife will be also be getting 60% of that as well brings it up to thirty two dollars extra a week. If you are not being assessed under the income test then I think it is well worth it. The reason that the cost is so high is because you will be purchasing class 3 contributions.Under the new legislation you only have until 5 April 2011 to apply. I already had back paid six years and because I have only just retired it is well worth it to me but some might think that it is not worth the effort. The other part of my plan has paid of as well. That was to open up a UK account so that the pension could be paid into it. This then gives me the freedom of either converting the money when I feel like it is at a good time or having the money over there for when ever I visit there. I was told that I would not be allowed to open up an overseas account. Proved them wrong and it is all legal as well.

Well that is about all I can do is bring this to your attention before it is to late to apply. I have noticed any documentation about it in the press.


You do not have to purchase six years as you are allowed to purchase anywhere between 1 to 6 years if you so desire.


This is how it was worded in the letter I got from them so it is up to anyone interested in it to follow it up.


National Insurance contributions paid after a person reaches State Pension age do not normally count towards backdating basic State Pension for a period. They normally only count from when the contributions are actually paid. However voluntary National Insurance contributions paid under the new legislation on or before 5 April 2011 will count from a person's State Pension age

[Les Woodard]

This is a email that was sent to me today. I was not surprised at the outcome of it either but it seems that the previous legislation was enacted because of it.


Just heard on the tele the Pensioners in OZ will not be getting the index linked rises it failed to go through the European human rights court.

[happy daze john in oz]

Spot on Les. The argument put forward by Brown and co is that the contributions we apid are not just for pension but for health care etc. But if you live in USA or EU country you will get the extra. If you get a lump sum back payment from U.K. as a result of paying extra then the missing link will hit you with a pension downgrade to compensate for thta payment. I know you have a UK account which is all leagl but beawre of Tasmania.That is where all overseas pensions are run through. The UK pensions office once a year send a list of all UK pensions paid to pensioners in Oz. Problem comes when Tas has not done it's homework and tells you that you are getting something extra. No matter how mnay times you explain someone will get it wrong.

[Michael Bennett]

My wife is getting the UK pension and becuse some of it i back pension they hit her with a bill For $2100 now the rub , the tax man says you will get that this year and as you are still working we want $750 a quqrter, We told the taxman or shoud I say the TAX MEN ehat the $6000 she got last year $2000 was back pay and would not be getting it this year reply We dont care it will sort its self out at the end of the Tax year.
NOW ME I retred in Drc 2008 and got a pay out from the railways of $31000 plus i got a one off payment of $26000 from a UK pension fund now rember i paid tax on the Railway payout but the TAX MAN has hit me with an $11000 tax bill, Yes i am having a battle as they seem i will get the same this year and want $3500 a quarter I told them to get F***** and guss what 3 policmen rolled up on my door step they looked at our papers and told me I should go to the TV companys as its a rip OFF, At the moment its with the complaints department an NO I have not paid the $11000 but I know I will have to and no I will not pay the $3500 a quarter, As we are both working we are taxed on our UK pensions and Guss what we both leave work in dec and the B***** have said we will still have to pay March and Junes payment 2011.
Wiggy PS yes I did get advice before all this happened but he did not put it in writing so i cant sue the C***

[Les Woodard]

Michael are you saying that you have to pay tax on the pension here in Oz? If so would it not be advisable if you can afford it to pay the amount you get into your super account and that way you will reduce your tax bill. I do believe that you can withdraw from your super while you are working and deposit your wages so that your tax bill for the year is greatly reduced. As we only have a few months left in the tax year you still have a chance to bring your tax for this year down considerably. Might pay to have a word with a tax accountant on this matter. Could have the wrong end of the stick with this matter as I am after all only a hairy bummed seaman. Just a bit of mess deck accounting but hope that it helps in resolving the issue.

[Michael Bennett]

Thanks Les.
We know it will end when we give up work in Dec , I tried to offset the bill by getting My wife and self salary sacrificing like mad this year ,the trouble is for this tax year 2009/2010 they take it on last years tax. I an pleased to say a very Snr tax man phoned me late last night from western Aus and we worked it out a bit better and he did apologize for the wrong Info. We will still be done about 1300 this tax year 2009.2010 and he has assured me it will stop when we give up work, I still have to pay $11000, Some one has to pay for the boat people I suppose?.
Wiggy

[happy daze john in oz]

Micheal it would appear that the tax man and the nissing link are not tuned to each other. Lump sum payments such as yours from the railway, are normaly taxed at a concessional rate and I was informed by the missing link that lump sum paymenst from overseas pensions are not subject to Australian tax. I often wonder just what the rules are as they seem to change with the weather.