From April 6, 2020, any newly retiring state pensioners receive the flat rate payment of £175.20 a week.
Living in Israel does not affect your eligibility to claim the UK state pension, whether you are already retired when you move or reach the state pension age after moving. You can also continue to build up your state pension by making voluntary national insurance contributions if you are still of working age.
Qualifying changes
The rules have changed quite substantially in the last few years and are currently eligible to anyone based upon the following criteria:
- Anyone retiring on or after 6 April 2020 will have to have made 35 years of National Insurance contributions to be entitled for the full state pension.
- To qualify for any new state pension, someone needs at least 10 qualifying years of work.
- For those with between 10 and 35 years, the amount paid is adjusted accordingly
Catch up with your NICs
Whilst this will come as music to the ears of some who are aware of unfairness in the British social payment system currently, it may concern those expats who have missed some years of National Insurance contributions. However, there is a way to play catch-up with your NICs to ensure you will still qualify for the full state pension.
If you’re British and you’ve lived abroad for any number of years during your working life it’s highly likely you will have stopped paying NICs during that period. As a result, you may well have too few years’ contributions on record to enable you to qualify for the state pension.
You can find out your current position as long as you know your National Insurance number, by visiting the government’s ‘check your National Insurance record’ page and following the onscreen instructions to receive a paper statement.
There is also an online version which requires entering UK passport details which can be found at https://www.tax.service.gov.uk/checkmystatepension.
You will be given a statement covering the period from when you started working, stating what you’ve paid, whether you have any gaps, and what you can conceivably do to catch up. Most people can make voluntary contributions to catch up the years they have missed.
Pay class 2 or class 3 NICS
Once you have received your statement explaining any gaps in your record, you should send a CF83 form to HMRC (see the link below pages 34 – 36 of the PDF).
This form will determine whether you can pay the NICS at class 2 or class 3 rate of National Insurance. The information you fill in this form is critical as class 2 rates are significantly lower cost than class 3 and it will be based on your employment circumstances both prior and after moving to Israel.
HMRC offer guidance at https://www.gov.uk/voluntary-national-insurance-contributions/who-can-pay-voluntary-contributions but we would recommend filling in the CF83 form so HMRC can verify your request to pay at the class 2 rate.
How much will you receive?
From 10 years of qualifying contributions onwards, you will receive an extra £5.00 per week for each full year you have contributed up to a maximum of 35 years.
Therefore, if you have contributed in your lifetime but not yet reached 10 years, it would certainly be beneficial to top up to at least 10 years.
An example of how much you will receive is as follows;
- You have 20 full qualifying years on your National Insurance record after 6 April 2016.
- You multiply 20 qualifying years by £5.00 (which is £175.20 divided by 35).
- Your new State Pension will be £100.00 per week.
Conclusion
Many are not aware that if you have come to live in Israel from the UK, you will most probably still qualify for a UK state pension when you reach retirement age. In spite of the new qualification rule changes that have come into effect, if you are entitled to pay NICS at class 2 (£3.05 per week), it is most certainly worth topping up your pension for as many years as is allowable.
If you do not qualify for class 2, it would still be beneficial to top up to at least 10 years of qualifying period with class 3 (£15.30 per week)
The UK has a social security agreement with Israel, therefore this should mean that pension payments are not frozen at £175.20 a week.
If you would like assistance with your application, please contact FKGB at info@fkgb.co.uk with your details.
