State pension query

[FrankCrank]

Even as a basic rate taxpayer, you will still get 80p of every £1 over the (current) £12500 tax free limit. Without knowing the cost of 4 years contributions, I cannot say, but, if you are healthy, I would guess it is worth it. Also would you pay tax in UK or wherever you are living now? You may qualify for tax relief if out of UK for prolonged period.

I have to pay tax on any income I get from the UK, which would include pensions I presume. Around 3 grand would cover the extra payments I need for a full Gov pension. Roughly speaking I'd get this back after about 4 years, so maybe it'd be worth doing after all.

 

[Beebo]

Had a couple of friends back there badgering me to check out my UK Gov pension situation. As an expat, a few years back I made sure I had reached the 30 years of contributions so I'd get a full pension. As my friends alluded to, the goalposts have moved and I now need 35 years of contributions. There is a shortfall of 4 years contributions, which I have until 2027 to make, according to the website. I currently take a pension from a former employer, and this combined with the state pension in a few years, will exceed the 12,000 or so allowance, and make me a tax payer again. So, is it worth me topping up my state pension, only to pay more in tax?
I've never been very financially astute, so any advice would be greatly received

The £12k threshold is bound to increase and the pension will increase too, so it’s impossible to give an accurate answer.

 

[BoldonLad]

I have to pay tax on any income I get from the UK, which would include pensions I presume. Around 3 grand would cover the extra payments I need for a full Gov pension. Roughly speaking I'd get this back after about 4 years, so maybe it'd be worth doing after all.

It will give you a real incentive to "keep going"! I have been retired for 14 years now, I calculated my break-even point at 12 years, so, every day I wake up it is like a very small lottery win

 

[DCLane]

I may be wrong, but, I think the qualifying years of contributions are 30 now. It is all on the Government Website, the tricky bit is working out the additional bits, it is fiendishly complicated, as only something dreamt up by Civil Servants can be.

Having checked yesterday it's 35 years' contributions for me as I'll get the state pension at 67, providing it's not means-tested by then. My full contributions are paid off in 5-6 years, so I should get that done. SWMBO will get there as well but is a few years behind me.

However, given I'll have a teacher's pension (I'm in a post-1992 university) and she'll have an NHS pension there will be a tax to pay on both. I've also got a couple of company/private pensions, one worth almost nothing, so they'll be taxed as well. And a sideline of an alternative non-financial pension scheme (paintings / vintage watches / antique books) - which I'll presume is also taxable.

It's worth checking up to make sure you'll be OK.

 

[PaulSB]

I have to pay tax on any income I get from the UK, which would include pensions I presume. Around 3 grand would cover the extra payments I need for a full Gov pension. Roughly speaking I'd get this back after about 4 years, so maybe it'd be worth doing after all.

Your situation in having four years missing contributions is very similar to my wife's. The only difference I can see is we are UK resident.

Provided you're in good health the investment of buying those years is very worthwhile even if it means paying a little more tax.

I forget the exact figures but in Mrs P's case purchasing the additional years increases her pension by £1300pa which after tax will be +/- £1040. The capital investment of buying the extra years is repaid in under three years and from then on gives a return of +/-£1000pa. For a healthy person it's a no brainer.

You can find all this info on the .gov website along with a tax calculator which quickly and simply will show the outcome of increased income and tax liability.

 

[Tenkaykev]

I'm late to this thread but have a couple of observations. I quite like the Lunar Month payments, they always arrive on the same day of the week, mines a Wednesday, and I've set up a four weekly repeating event in the calendar app on my laptop.
The only Pensions that I have are my State Pension and a small £20 PCM private pension. Mrs Tenkaykev gets State Pension plus an NHS Pension from her years of Nursing. This brings her over her tax allowance. As my income is less than my tax allowance I use the " Marriage Allowance Transfer" option. This enables me to transfer £1,260 of my tax allowance to Mrs Tenkaykev and reduces her tax.