Rishi Sunak grilled by Neil on state pension increases
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State Pension is issued to Britons right across the country, and overseas, who have paid National Insurance contributions throughout their lifetime. Usually, a person needs to have 10 qualifying years, although they do not have to be consecutive, of NI contributions before they receive any state pension at all. And to unlock the full state pension sum, NI contributions of 35 qualifying years or more will be required.
These are part of the rules which help the Department for Work and Pensions (DWP) to determine how the state pension sum is calculated.
But certain Britons should be aware of major changes which are to kick in starting from next year.
The alterations are as a result of Britain’s exit from the European Union – or Brexit as it is commonly known.
The rule change is set to affect how the UK state pension is calculate for those who move to live in the EU, European Economic Area (EEA) or Switzerland, and have previously lived in certain countries.
- Australia, before March 1, 2001
- New Zealand
The important issue to note is that the change will take place from January 1, 2022.
From this point, individuals will no longer be able to count periods living in the aforementioned three countries towards calculating a state pension, if both the following apply:
- A person is a UK national, EU or EEA citizen, or Swiss national
- A person moves to live in the EU, EEA or Switzerland on or after January 1, 2022 – this includes moving to live in another EU, EEA country or Switzerland on or after this date
The Government website states: “The change will affect you whether or not you have claimed your UK State Pension yet.
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“Your UK State Pension will be calculated, or recalculated if already in payment, using only your UK National Insurance record.”
If a person is retiring abroad they will need to let the Government office which deals with their state pension know.
Individuals can continue to receive their UK state pension if moving to live in the EU, EEA or Switzerland.
The state pension will be increased each year in the EU in line with the rate paid in the UK.
The change to rules from January 2022, however, does not affect certain individuals.
The Government states those living in the UK, regardless of nationality will not be impacted.
This is the same for those who are a UK national, EU or EEA citizen or Swiss national, and who were living in the EU, EEA or Switzerland by December 31, 2021.
As long as someone continues to live in the same country, they will still be able to count time living in Australia before March 2001, Canada or New Zealand in order to calculate a UK state pension.
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An important consideration, though, for affected individuals as well as others is to work out how much state pension one is set to receive.
This can be achieved through the Government’s state pension forecast tool which helps Britons understand how much they could receive and when.
Alternatively, individuals may wish to fill in the BR19 application form, available if they will reach state pension age in more than 30 days.
For those living abroad and hoping to find out more about their state pension or gain further clarity, the Government advises calling the International Pension Centre.
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