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Overview

Pension arrangements in the UK are normally made up of a combination of state pension and a private pension.

According to their personal circumstances, expatriates on a fixed term corporate assignment may be able to continue contributing to their home country pension plans instead of the UK ones. This tends to be a popular choice; however you will need to make sure that your tax position is not affected by this (i.e. you need to ensure that you will be able to deduct contributions from your tax base). When this is not possible, or convenient, the other choice is normally to verify with your provider if once you join a UK pension plan you will be able at a later date to transfer the relevant value back to your home country pension plan.

Pension arrangements are a very important part of your financial planning for the future. Pension arrangements tend to be complicated and, therefore, you should seek professional advice in order to ensure that you have properly planned your retirement.

 
State Pension

If you pay in enough qualifying years of National Insurance (NI) contributions, you will be entitled to some basic State Pension.

In 2010-11, a single person can get a maximum of £97.65 a week basic State Pension.

You can get your State Pension once you reach your State Pension age. Currently the State Pension age for men is 65, while for women it is gradually rising from 60 and by 2020 it will be 65. It is foreseen that the State Pension age for both men and women will rise in the future (the government is reviewing the increasing of the State Pension age from 65 to 66).

The amount of State Pension you will receive depends on how many qualifying years of National Insurance you have built up. You build these up by paying National Insurance contributions, or you may get National Insurance credited to you by the government (i.e. illness, unemployment, etc.).

 

Personal Pension

The State Pension is made up of two parts, the basic State Pension and the additional State Pension. If you are employed and have a company, stakeholder or personal pension then this pension may opt out of the additional State Pension.

If you have a company or occupational pension, both you and your employer pay a reduced rate of National Insurance contributions. If you have a stakeholder or personal pension, you pay full rate National Insurance contributions, but the government pays part of those contributions into your pension scheme for you.

Personal pensions are available from banks and life insurance companies. You can save as much as you want into a personal pension. You will get tax relief on the amount you put in up to the annual allowance. Stakeholder pensions are a particular type of personal pension, whereby certain standards need to be met by the provider in order to ensure that they are good value for money for subscribers.

 

 

 
 
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All the information on Expats Plaza is free to view. If after having reviewed the information on Expats Plaza you believe this has been useful to you, please visit the Support Us page.
 
 
This page was last updated on 12.11.2010
 
 
Expats Plaza is the website for the Expatriates living in the UK