UK pension law changes may affect future expat retirees

UK pension law changes may affect future expat retirees

UK pension law changes may affect future expat retirees

Two upcoming changes to UK pension law may seriously affect Britons nearing retirement and planning a permanent getaway as well as expats already living overseas.

From April 2017, the weekly UK pension will rise to £144, but in order to receive the full amount, retirees must have worked in the UK and paid National Insurance contributions for a full 35 years. The current claim limit is 30 years, meaning that those planning their upcoming overseas retirement may need to continue working if possible.

The second change is the introduction of an upgraded residence test, to begin this April, which may limit expat options as regards the previous non-domiciled and non-resident rules. The new Statutory Residence Test is a three part questionnaire determining UK tax liability, and hinges on how many days an expat spends in the UK yearly and how many homes are owned.

The test, as with much coming from the present UK government, is difficult to quantify and not well put together, and help from qualified advisors may be advisable in many cases. Again, new government rules governing financial advisors and the advice they are allowed to give has resulted in a sector in turmoil nervously awaiting the next blow from the Inland Revenue.

Perhaps the safest way for those disenchanted with the prospect of remaining in the UK after retirement is to sell everything they own, take the proceeds with them and restrict visits to UK family and friends to a very busy two weeks over the Festive Season. Hopefully, declaring open house year-round for family and friends will result in seeing more of the grandchildren without being taxed to the hilt in a country they couldn’t wait to leave.

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