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Information for Cyprus Expats who are entitled to UK State Pensions
The number of qualifying years for a full state retirement pension is 30 years for both men and women reaching state pension age on or after 6th April 2010, and there is now no minimum number of qualifying years before any pension at all can be paid.
The retirement age for women born after 5th April 1955 had been increased to 65. For those born between 6th April 1950 and 5th April 1955 the date of retirement will fall in the five-year range between the age of 60 and the age of 65 on a sliding scale.
The state pension age for both men and women is to increase from 65 to 68 for those retiring between 2024 and 2046, with each change phased in over two consecutive years in each decade. The first increase, from 65 to 66, will be phased in between April 2024 and April 2026; the second, from 66 to 67, will be phased in between April 2034 and April 2036; and the third, from 67 to 68, between April 2044 and April 2046.
The UK government has announced new proposals for further increasing state pension age so that from December 2018 the state pension age for both men and women will start to increase to reach 66 by April 2020. The government is also considering changing the timetable for increasing the state pension age from 66 to 68.
Parliament would need to approve any proposed changes.
Pension forecast
A pension forecast for current UK residents can be obtained from the Department for Work and Pensions (DWP) in Newcastle upon Tyne by contacting the Retirement Pension Forecasting Team (UK telephone: 0845 3000 168). Alternatively, you can obtain the required Form BR19 from your local DWP Social Security office.
For those living abroad (or shortly going abroad), you should contact HM Revenue & Customs for Form CA3638 (or download it from http://www.hmrc.gov.uk/forms/ca3638.pdf
UK state pension deferral
It is possible to defer taking your state pension, or choose to stop claiming it after you have already claimed it. This allows you to build up extra income or a taxable lump-sum payment.
To get extra state pension you have to put off claiming for at least five weeks. You build up extra pension at 1% of your normal weekly rate for every five weeks you put off claiming (this is equivalent to about 10.4% extra for every full year you put off claiming). To get a lump-sum payment you have to put off claiming for a continuous period of at least 12 months, and in this case you will get interest at 2% above the Bank of England base rate.
You can find out how much you could get by putting off claiming your own state pension by phoning the Pension Forecasting Team (UK telephone: 0845 3000 168).
National Insurance (NI) Contributions
Britons who move to Cyprus before they reach the UK state retirement age may find it worthwhile to pay voluntary Class 2 or Class 3 NI contributions in the UK while you are in Cyprus in order to protect your UK retirement pension.
Paying Cypriot social security will not enhance entitlement to the UK state pension or other benefits. Neither the payment of Cypriot social security nor UK NI contributions provides cover for healthcare in Cyprus.
Class 2 contributions protect entitlement to retirement pension, widows benefits and invalidity benefit (and maternity allowance), whereas Class 3 contributions only protect entitlement to retirement pension and widows benefit. You can only pay Class 2 contributions if you are employed or self-employed abroad. In order to decide whether it is worth your while making voluntary contributions you should contact the UK National Insurance Contributions Office at HMRC’s website above or at
National Insurance Contributions Office, Benton Park View,Newcastle upon Tyne NE98 1ZZ, UK.(UK telephone: 0845 302 1479).
The level and bases of, and reliefs from taxation may change. Any statements based on taxation are based upon current taxation laws and practices which are subject to change.
This information is for guidance purposes only. You should seek professional advice relating to your personal circumstances and objectives.
© Blevins Franks
Blevins Franks – Integrated Tax Planning and Wealth Management since 1975
Cyprus office:
Lou Cunningham
lou.cunningham@blevinsfranks.com
Tel: 26 912 315
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