Am I still eligible for the State Pension if I live abroad?

Even if you live abroad it is possible to still claim the State Pension as a regular payment. You can still have other income, like a personal pension or a workplace pension. If you reached the state pension age on or after 6 April 2016 and are eligible, depending on your National Insurance Contribution record, you will receive the new State Pension. If you reached pension age before then, the old rules will apply. One difference if you move abroad permanently is that pension credit, a benefit to top up your weekly income, stops completely.

Will I pay tax on my State Pension?

Non-residents don’t usually pay UK tax on it. You may have to pay UK tax on your State Pension if you live abroad but are classed as a UK resident for tax purposes. The country where you live might also tax you on your UK income. However, if it has a ‘double-taxation agreement’ with the UK, you can claim tax relief in the UK to avoid being taxed twice.

Will my State Pension still increase? In any country?

If you live in the UK, your State Pension usually rises each year. But if you move overseas, you’re only entitled to an annual increase if you live in the European Economic Area (EEA). This includes the 28 countries who are members of the EU. This includes Iceland, Liechtenstein, Norway, Gibraltar and Switzerland. Although Switzerland is neither an EU nor EEA member, it is part of the single market so the same conditions stand. It also applies in countries that have a social security agreement with the UK. Although you can’t get an increase in Canada or New Zealand.

There has been no immediate change to the rights and status of EU nationals in the UK, and UK nationals in the EU, as a result of the referendum. But this position may alter when Brexit negotiations are eventually completed. Should you decide to return to live in the UK, your pension will increase to the current rate.

Why is it important to keep topping up my National Insurance contributions?

Your National Insurance record is used to calculate your new State Pension. You’ll usually need ten qualifying years to get any new State Pension. The amount of pension you get can be higher or lower depending on your National Insurance record, only being higher if you have over a certain amount of Additional State Pension.

If you’ve lived abroad for any length of time, you may well have gaps in your record. It is important to try and fill these gaps by paying voluntary National Insurance contributions. These will go to your State Pension and certain benefits and allowances if you return to the UK. You might still be able to pay UK National Insurance while you’re working abroad. Yet this depends on where you’re working and how long for.

The whole area is quite complex. Please get in touch with Cross Border Financial Planning if there are any aspects relating to your own particular position you would like to check.