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State pension reforms: what will I receive?

Are you confused by how the government's plans for a £144-a-week state pension may affect you? Read our guide.


by Michelle McGagh on Feb 04, 2013 at 11:46

State pension reforms: what will I receive?

The introduction of a £144-a-week, flat-rate state pension in 2017 has left some people confused about just what they will receive and wondering whether they will be short-changed in retirement.

Under the government's plans anyone who contributes national insurance contributions (NICs) for 35 years will receive the full amount of £144-a-week. This is an increase from the current £142.70 basic level of means-tested pension available for a single pensioner.

If you contribute less than 35 years of NICs you will receive less than £144-a-week as a basic payment.

There will also be a minimum qualifying period of between seven and 10 years to receive anything from the state.

What will I get?

The introduction of a £144-a-week state pension isn’t as straightforward as it sounds because there are many people who have already paid in enough contributions and also built up extra state pension provision.

To work out how much you are due, you first need to work out your ‘foundation amount’. This is a new term that has been brought in by the flat-rate pension reforms. It is the amount of state pension entitlement you have already built up. It will tell you how much more you need to contribute in order to receive the £144-a-week state pension in retirement.

To work out your foundation amount you need to work out how much basic state pension you are due by entering your details into the government’s State Pension calculator.

The calculator asks how many years you have contributed NICs since you were 19-years-old, whether you have claimed unemployment, sickness or disability allowances, or if you have claimed child benefits or fostered any children.

The calculator will then tell you what your basic state pension will be and what your retirement age will be. At the moment mine is £46.56-a-week and I won't retire until 2050 aged 68.

Unfortunately, the calculator cannot tell you how much additional state pension, or state second pension (S2P), you may be entitled to. To find out this you will need to ask for a full State Pension Forecast Statement. Any entitlement to S2P will boost your foundation amount.

The situation with S2P and additional state pension is a bit complicated because of the system by which people could 'contract out' of S2P (see more below) and divert some of their NICs into their own personal pension plan. People who contracted out don't get the S2P and therefore can't add it into their foundation amount. However, 35 years of NIC contributions will ensure they get the £144 a week. 

Once you have worked out the foundation amount you will then fall into one of four categories, according to the Department for Work and Pensions (DWP).

Note, that these categories apply to those retiring after the new rules come into play, which will be 2017 at the earliest. Those who retire before the new state pension is introduced will have their pension calculated under the current system.

Scenario 1:

Your foundation amount is equal to the new state pension amount of £144-a-week.

Those whose foundation amount is equal to £144-a-week are likely to have the full 35 qualifying years and have not been contracted out of the state second pension (S2P).

The DWP gives the example of Liz who is 57 and has run her own business for the past 36 years.

She has never been contracted out of the S2P, which means she does not have any reductions in the additional state pension.

As Liz’s foundation amount is already £144 she will not be able to add extra pension by gaining more working years.

Scenario 2:

Your foundation amount is less than £144-a-week

Those whose foundation amount is less than the new flat-rate pension are likely to be younger and not built up 35 qualifying years yet, or older people who have been contracted out of the S2P so have not built up the full amount of entitlement despite working for many years.

The DWP uses the example of Matt, aged 32, who has been contracted out of the S2P. His foundation amount is just £49-a-week.

Matt can use the years he has left in work to build up his state pension entitlement to the £144-a-week level. For every year he works he will add £4.11 to his state pension entitlement until he reaches the £144-a-week threshold. He would need to work for another 24 years to reach the threshold.

Scenario 3:

Your foundation amount is more than £144-a-week.

Those whose foundation amount is more than the flat-rate pension are likely to be older and have never spent any significant amounts of time contracted out, meaning they have always paid into the S2P.

The DWP uses the example of Jenny, aged 60, who has worked as a receptionist for 32 years and has never been contracted out of the S2P.

As Jenny has worked for a long time and never contracted out she has built up a pension entitlement, under the current rules, of £147-a-week, Under the new pension Jenny will receive £147-a-week made up of £144-a-week state pension plus the £3-a-week ‘protected payment’ that she has already accrued.

Like everone else Jenny will not, however, be entitled to any extra pension for any years she worked after the 35 qualifying years.

Scenario 4:

Your foundation amount is zero.

Those who have not yet started work will have no NICs to make up their foundation amount.

The DWP uses the example of Tim who is 15 and at secondary school. When Tim starts working he will receive £4.11 in state pension for every qualifying year he works, up to 35 years.

Contracting out or losing out?

The most confusing aspect to the state pension changes is around contracting out. Those who contracted out opted to have some of the NICs deferred into their company or personal pension rather than build up extra state pension entitlement through the S2P.

If you have not been contracted out and instead paid into the S2P and built up entitlement then you won’t lose it but it will not be paid as an extra amount.

Take for example, Citywire Money reader Gatser. Gatser’s pension forecast is a basic state pension of £107-a-week plus £11-a-week from S2P, a total of £118-a-week.

Gatser will be eligible for the state pension in 2024 and will have 35 years plus of qualifying NICs by then.

Gatser wants to know if he will get the £144 a week from the new state pension plus £11 a week from S2P?

The answer is no, as Andy Zanelli, head of retirement planning at AXA Wealth, explained. He said Gatser‘s S2P contribution would now only count towards his or her foundation amount and would not be paid on top of the new £144-a-week rate.

‘At the implementation date each individual entitlement will be valued using the new rules. If previously contracted out a deduction will be made reflecting that they have paid lower NICs [so a lower state pension will be paid],’ he said.

‘A check will then be made to see if the current system would give a better outcome. The higher valuation will then become that individual’s foundation amount. For those individuals whose foundation amount is less than the level of the single-tier pension [£144-a-week], they will be able to increase this foundation amount up to the level of the full single-tier pension…at the rate of £4.11 for each additional qualifying year they gain before reaching their state pension age.’

In Gatser’s case the extra £11-a-week will be added to the basic level of £107, meaning Gatser has a foundation amount of £118-a-week.

Zanelli said: ‘In [Gatser’s] case the client will build on their foundation amount until it reaches the full single-tier rate.

This also applies to the example of another Citywire Money reader Jordan.

Jordan has a state retirement date of 2036 and has 19 qualifying years towards the state pension. Jordan was contracted out over the past two years but before that was contracted in for 17 years and has built up a £30-a-week state pension entitlement from the S2P.

Jordan wants to know, firstly, if the £30-a-week is lost under the new rules and is £144-a-week the maximum that can be received.

Secondly, what happens if the full 35 years NICs aren’t paid? Jordan said: ‘What happens if I don’t make 35 years NIC contributions (say I emigrate)? If my contribution years only entitle me to say £144-a-week state pension, will the £30-a-week S2P I accrued be recognised as it doesn’t exceed the £144-a-week cap?’

Zanelli said: ‘Jordan will be in the same position as Gatser with regard to the foundation amount calculation.’

This means Jordan’s S2P contributions would be added to the basic state pension already accrued to determine the foundation amount. On the question of emigration, Zanelli said Jordan would only receive the foundation amount in retirement plus any additional entitlement accrued by paying in.

‘I believe this amount plus any additional years gained after the implementation date would be payable at the time the individual reaches their state pension age, irrespective of residency,’ he said.

49 comments so far. Why not have your say?

Clive B

Feb 04, 2013 at 12:10

I'm probably going to be impacted due to having been contracted out for some years. No way that I'm going to top up the State pension. I'll simply save/invest elsewhere. I have an inherent distrust of the State pension as it puts you at the mercy of politicians. I'll keep my money where I can control it.

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Keith Cobby

Feb 04, 2013 at 12:27

Not very flat is it!

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Feb 04, 2013 at 13:54

So it is still possible for an individual to get absolutely no pension. This will affect mothers that have never worked and are coming up to retirement age.

Is it the posh boys at the Treasury that have done the mathematics on pensions. If so it is bound to be a complete failure!

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Inge Jones

Feb 04, 2013 at 16:43

The link to the pension calculator isn't working. When I find my own way to the pension calculator it's only talking about the current system and what I'll get on that, no mention of the "foundation amount" referred to here. It says "full pension of £107.whatever" no matter whether I putin an age older or younger than the expected launch date of the nrew system

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Calm down and think it through

Feb 04, 2013 at 17:03

This was supposed to be a simple universal flat rate pension. It now transpires that it’s far from simple and it’s not universal. They might as well leave things as they are and raise the pension to a level where no one claims pension credit.

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Julie Kitchen

Feb 04, 2013 at 17:16

Your State Pension Calculator and State Pension Forecast links fail

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Paul W

Feb 04, 2013 at 17:22

My wife has never paid the full NIC as she looked after children for many years and then worked part time. About 5 years ago we called the DWP for advice as to whether she should start paying a full stamp to build up some entitlement

We were advised that as she would get 60% of my pension when I reach retirement age which is now I understand the 22.10.2020 when we will both be 66 then it probably wasn't worth it.

I am now told we will only get the £144 per week not the £171 we were advised by the DWP a few - if this is correct - then it sounds like miselling to me if it was a financial advisor but in this case I guess the government can just move the goalpost when they like - 40 years of contributions to date, never claimed a penny in benefits - best to make your own way in this world and give the government nothing, if you try to legally avoid a penny of tax it is "morally" wrong but then goverments do not have morals do they.

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Michelle McGagh (Citywire)

Feb 04, 2013 at 17:32

Thanks for flagging the broken link - both State Pension Calculator and State Pension Forecast Statement links are working.


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Feb 04, 2013 at 18:31

The article states "People who contracted out don't get the S2P and therefore can't add it into their foundation amount. However, 35 years of NIC contributions will ensure they get the £144 a week."

I don't think that is the case. Citywire please check your facts. 35 years of contracted-in NIC contributions gets £144 a week. I have not see anywhere a forecast of what 35 years contracted-out NIC contributions will earn. When I retire at 67 I will have 50 years of continuous NI contributions, all contracted-out until now, and no-one seems to be able to advise if that will be enough to get the £144.

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Feb 04, 2013 at 18:34

I thought the new scheme was meant to simplify pension calculations. Appears to be adding to the current morass!

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Feb 04, 2013 at 18:42

II have been in contact with the DWP and they told me that only about 40% of people retiring 2017 will receive the full flat rate pension. I think that most of the people effected will be those who have been contracted out most of their working life. The others would be people who don't have 35 years NI to receive the full flat rate pension and some of the women who took time off to bring up children.

There are going to be a large number of unhappy people in 2017 when they find out they are not going to receive the pension of £147.

Not all self employed people will receive the full flat rate pension as many of them would have spent much of their working life being employed and contracted out.

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Feb 04, 2013 at 19:01


I think if you have been contracted out most of your working life you will only receive a figure just above the basic state pension when you retire as the DWP will assume because you have been contracted out most of your notional state second pension will be paid by the contracted out pension scheme.

This is what happens at the moment. I myself was contracted out of state second pension/SERPS all my working life and somehow managed to receive a small state second pension of about £5 pw and the full basic state second pension.If the DWP did not adjust your pension because of contracting out it would not have been fair to people who remained in state second pension as you and your employer would have received a national insurance rebate for those years you were contracted out.

The government and DWP are not explaining very well how the contracted out pension effects the new flat rate pension and they did not give an example in the recent white paper.

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George Morley

Feb 04, 2013 at 19:16

Paul W, You are not alone as the government have been robbing pensioners for years. If you have seen other reports about the state pension then I'm sure that there will have been someone who commented about the ongoing scandal of the frozen pensioner. These are pensioners who have all paid into the system in the same way as everyone else but because they chose to retire to certain countries which surprisingly enough are Commonwealth countries in the main although Thailand, Singapore and others are included and they represent just 4% of all pensioners worldwide who receive no increases to their pensions ever !

Now should a pensioner retire to the EU or the USA or even the Philippines then they receive the annual uprating the same as they would in the UK. This is blatant discrimination and is illogical and miscarriage of justice and has never been justified. Dr Steve Webb is a Professor of Social Policy but has lost his way and continues to rob pensioners. So much for his word when in opposition he said the practice of freezing these pensions is wholly unfair, discriminatory and irrational and he urged the Government to bring forward proposals to end the evident unfairness in the current arrangements.

Kinda knocks the honourable MP bit into the waste bin does'nt it ?

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Feb 04, 2013 at 19:33


I agree with your comment regarding being unfair to those who were contracted in. However I will have been contributing almost full NI for nearly 50 years. I have seen a mention that NI years over 35 will give you an increase on your reduced pension and hints that it might get you back to a full £144, but I've not come across any actual numbers anywhere. If anyone has seen any details anywhere a link would be much appreciated

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Feb 04, 2013 at 20:34


I have sent an email to the pensions minister asking for more information about how contracted out pensions effect the new flat rate pension and am still awaiting a reply, they seem to take about twenty working days to reply.

As far as I can see the only people who can receive more than £144 are people with a basic and state second pension that add up to more than £144 . It is possible to have a state second pension of about £160 pw for a high earner or a contracted out pension of the same amount.

Here are some examples of how I expect it to work for someone with 35 years NI.

1) Basic state pension £107 and state second pension of £20 will have it made up to £144 pw.

2)Basic state pension £107 and state second pension £50 will receive a pension of £157 pw.

3) Basic state pension £107, state second pension of £10 and contracted out pension of £10 will receive £144 less £10 contracted out pension ie £134.

4)Basic state second pension of £107 state second pension of £10 and contracted out pension of £50 will receive a pension of £117 from the DWP as they will assume the other £37 will be paid by the contracted out scheme.

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easy life

Feb 04, 2013 at 23:36

Its another Government con.

Most people retiring after 2017 with more than 35 years contributions who have been contracted in all that time would in all likely hood have received a pension of more than £144 (OAP +SERPS +S2P), In future for the same NI contribution as contracting into S2P your pension will be capped at £144.

So pay in the same receive less (not more as we are led to believe!).

If you have been contracted out up until now your pension starts at £107. However from now as you are paying the full NI rate you will add £4.11/week/years contribution to your foundation amount (as I understand it). So after about 9 years more contributions you should get the full £144.

If you have been contracted in and out any SERPS or S2P will be added to the foundation amount (£107) if this takes you over £144 then allegedly the this will be secured and not lost (not sure if inflation linked). Again seems if you make another 9 years contributions you should be able to get the foundation amount up to £144 and allegedly whatever you have accrued contracted into SERPS/S2P.

Short term there will be some gainers, longer term once SERPS/S2P plays out the government will be receiving more in NI contributions and paying out less.

Not advice just my understanding of the smoke and mirrors

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donald bell

Feb 05, 2013 at 10:00

Can someboby please explain how all this affects existing pensioners. I am 70 and collect the £107 state pension plus another £ 88 from SERPs. Do I get more, less or the same in 2017??

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Feb 05, 2013 at 10:33

Donald Bell

You will be able to keep your existing pension of £187 and if you have a wife and you die before her she will inherit half of your SERPS pension.. I believe that people who have not reached state pension age but are covered under state second pension and SERPS will have a transitional arrangement to pass on half when they die but any pension secured after the new flat rate pension starts will not be able to be passed on.

Under the current system if a wife only has a small basic pension and her husband dies before her can inherit his some of his basic state pension and make her pension up to the full basic pension if he was receiving the full basic state pension before he died. I think that there will also be a transitional arrangement for this . for people who die after the new flat rate pension starts but only in respect of NI conts before the change to flat rate pension.

I hope DWP record keeping will be able to cope with this. I don't trust them as they missed nine years of home responsibility protection (HRP) on my wife's pension. If you have a wife and she took time off work to bring up children you should ask the DWP if they took into account HRP. .

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George Morley

Feb 05, 2013 at 13:52

Donald Bell, I don't think existing pensioners are catered for in this new bodged up pension plan at all. Steve Webb does'nt understand it and so has just left it alone instead of improving the old system and putting it right and treating all pensioners equally, so don't expect to see anything more.

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john edwards

Feb 05, 2013 at 14:49

My wife |DOB is 25May 1953...she draws her state pension in November 2016 aged 63.5 and has 35years contributions I am told she will get no increase in April 2017. I calculate if she is retired for 20 years she has lost a total of about £85K comprised of no pension for 3.5years delayed.. and no increase for being a few months short of 2017...I doubt she will vote conservative ever again.

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George Morley

Feb 05, 2013 at 15:16

I think you are right John, This government will not be returned at the next election and many are seriously considering voting UKIP and it will be interesting to see how they fair when it happens. They could not be worse than the lot that have been in control for the last 20 yrs or so.

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Feb 05, 2013 at 15:43

Donald Bell

The only existing pensioners who might loose out are the self employed who don't have a state second pension/SERPS of £37 for the years they were employed. I doubt if many self employed don't have a state second pension of at least £37 or contracted out pension of the same amount. The only other people who might loose out are women who took time of work to bring up children but I expect many of them might have had a credit for those years NI which when added to the years they worked before and after looking after children will give many of them a pension of £144 when adding in state second pension.

You must remember that the State pension of £144 for most people is made up of Basic state Pension and state second pension and can be reduced by contracted out pension for many people.I doubt if more than about 40% of people who retire in 2017 after the flat rate pension will receive the full £144

In my opinion many people under the existing arrangements will be better off as the only require 30 years to receive the full basic pension an a minimum of 1 year to receive 1/35. Under the new rules they will require 35 years to receive the full pension and 10 years to receive anything at all. Under existing rules a spouse can inherit 50% of state second pension and also part of the basic pension in certain circumstances.

Under the flat rate scheme there will be a transitional period where they can inherit some of the pension secured prior to the flat rate pension starting but none of the pension secured after the 5 April 2017

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Feb 05, 2013 at 15:56

John Edwards

Does your wife have any state second pension and contracted pension so that when added to the basic state second pension come to £144 or more she would not be worse of other than the 3.5 years loss of pension.

If you compare this to a man she is better off as the man had to work and pay extra Ni for 5 years without any increase in basic state pension and loss of pension for 5 years.

You must remember the pension is not going up just from Basic state pension as you must also take into account state second pension which for many people gives them a pension greater than the new flat rate pension of £144.

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Inge Jones

Feb 05, 2013 at 16:03

I have 30 years of "stamps" (as we used to call them) for basic pension, most of which are home responsibilities credits and 6 years I paid for myself recently to catch up. I am entitled to only about £1 a week in SERPS. My state pension year is 2015. I am gonna be very much more out of pocket than if I was retiring in 2017. I wouldn't have even minded paying those extra 5 years to bring it up to 35 years to qualify!

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Feb 05, 2013 at 16:43

Inge Jones,

As you only have £1 a week SERPS do you also have some contracted out pension? If so how much. Also was any of the home responsibility credits after 2002 and if so for how many years as I think from 2002 there was also a credit towards state second pension. As you receive your state second pension in 2015 and you have 30 years of NI you will be entitled to the full basic state pension as it does not go up to 35 until 2017.

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Inge Jones

Feb 05, 2013 at 17:24

Kenneth, no contracted out or private pension. I haven't been employed since about 1992 and never had a job that offered a company pension. It's probably a bit more than the £1 I said but I am pretty sure it's not much more, without looking again at my statement - less than £10 definitely. I never had a well-paid job as I was primarily a housewife since marrying for the first time at 20 yrs old. I only really went out to work between marriages.

My children were no longer considered dependents by about 1994. The entire span of having dependent children was 20 years.

I won't be entitled to any supplementary benefits as I am lucky enough to have savings over the cut-off amount, but in any case the idea of this new pension is to reduce the likelihood of pensioners needing means-tested supplements.

I am actually not complaining for myself as I am not in a bad position financially, all things considered, but wanted to point out how it is that some people may be in a position where retiring just days the wrong side of May 2017 can make £40 a week difference. :)

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Feb 05, 2013 at 18:56


I agree that you are one of the unlucky ones. I would ask for a pension statement from the DWP just to see exactly what you will receive.

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john edwards

Feb 05, 2013 at 22:35

My wife has only work and child care contributions totaling 35 years...and no second state pension contributions.

She has at retirement also two small company pensions.

I understand Mr Cameron said we are all in this together! and agree that men at 65 are not in it... but out of it... compared to a women at 60... or in my wifes case 63.5

I expect pension goal posts to be moved yet again as the re-election fears of Mr Cameron grow.

Like the Irish.. I tend to always vote against the government and that is presently has to be a vote for UKIP.

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Jane Davies

Feb 06, 2013 at 06:29

Lord Beveridge's original idea was for "a single, simple, decent state pension, paid after a lifetime of NI contributions." I'm sure he is spinning in his grave now at the complete cock up of the pension scheme perpetrated by this incompetent bunch of crooks that inhabit 10 Downing Street. Our contributions were mandatory, we had no choice, our money was taken out at source, from our wages, OUR HARD EARNED, how dare these millionaire public school boys destroy our pensions. Stupid me thinking we lived in a free democratic country, I retired to join family in Canada after a lifetime of working and paying taxes, then I discover my pension is frozen at the first amount paid to me in 2008. If I lived a few miles away across the border in the USA it would not be frozen. That is discrimination and theft. Oh, I forgot David Cameron has patted himself on the back in his new year speech by stating "We did the right thing by our pensioners in 2012 by bringing in the biggest ever increase in state pensions.' He clearly ignores the elephant in room, the 4% who receive no increases EVER, the frozen pensioner. He and his bunch of merry millionaire buds clearly inhabit La La Land! Yup I'm voting UKIP next time.

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Peter Wood

Feb 06, 2013 at 11:47

My Wife was advised in her DWP forecast that, at the time of the last change to the qualifying regulations, she had the requisite 30 years for full pension to be paid to her in 2019.For obvious reasons she then declined an offer which had been tabled for her to buy in extra years. Unfortunately this has now been changed and my wife, who can no longer work, is required to find another five years of contributions. I very much doubt that the offer to purchase additional years will be offered at the original cost (once the deadline for purchase expired this was increased considerably) and coupled with the delayed payment at 66 years this would constitute a “double whammy”. I doubt that the DWP will make any concessions here.

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Feb 09, 2013 at 03:50

When I saw the Headline "State Pensions Reforms: what will I receive?" my immediate reaction was, "Same as last year and the year before and the same as next year and the year after".

I am a frozen pensioner and I see that George Morley and Jane Davies have already reminded readers of this iniquitous discrimination being perpetuated by a hypocritical Pensions Secretary, Duncan Smith and a hypocritical Pensions Minister, Steve Webb.

It is well known that there is no legal, moral, financial or administrative justification for this policy and the regulation could be abolished overnight by the stroke of a pen; the policy is "a product of history not rationality" - Oliver Letwin - current Senior Government Minister.

However, I wonder how many potential State Retirement Pensioners (and especially those who are contemplating emigrating) realise that not only is this discrimination to continue against those who will retire before the new reforms become operational but, if the Bill becomes Law, to those who become eligible after enactment?

This is one reason the voices of those who have not yet retired should be united with those who have and who are already suffering as a result of successive government ministers reneging on their pre-election promises.

Fairness, Justice and Equality to ALL British Pensioners.

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George Morley

Feb 09, 2013 at 04:50

Thanks RobtheFox for confirming what has been said and enlightening people about the governments discriminatory policy of freezing that could affect many of the people commenting here and I would hope that they spread the word wherever they can. While I was working I had no idea that I would emigrate one day but family ties mean a lot and should not mean having my pension frozen as the place that you choose to retire is nothing to do with the government as the pension has been paid for. A broken contract and they say its legal ! This is typical of what you all have to deal with. If you don't get the answer you expect then keep on at them again and again.

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Feb 09, 2013 at 09:51

What will I get? No more than the state is paying out at the moment after 47 years of contributions, but in essence F A minus 1000%. OK wrong, more tax to be paid, as well as VAT.

Might have been a bit better if there had been the bonfire of quangos and the public sector pensions had been subjected to the the equivalent reductions wrougt by the pension raid of 97 and perhaps a tad bit more if the expense thieving MPs had been prosecuted and lost all their pension pay off entitlements.

Make me supreme ruler and within a few days with a carefully drafted decree that would be brought into effect, and many MPs, andf MEPs and former MPs etc would 'pay' for their fiddles.

As for the Brussels mob, that would need a new prison to be built, probably several to accommodate the thieves cheaters and fraudsters, the Pillocks probably the first inmates.

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Dennis .

Feb 09, 2013 at 17:35

Jane Davies regarding your problem with frozen pension in Canada is it not possible to either -

keep a bank account in the UK in which to have your pension paid and withdraw through a Canadian ATM or

Come back to the UK for a week or two every couple of years to reset the clock

Or am I being naive?

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Feb 09, 2013 at 18:38

Dennis...if I may butt in here the simple answer to your suggestions for Jane's problem is that both ideas are no goers, I'm afraid.

It is not where the bank you have the pension paid into that is relevant but your place of residence; to quote a UK address when, for example, living in Canada would be illegal.

To return to the UK for a week or two would not reset the clock. The pension would, on application, be uprated to the appropriate rate current in the UK for the period of the visit but on returning to one's frozen country it reverts to the original frozen level.

The proper answer is the one the government will not give - world wide uprating irrespective of country of residence - and one we must keep fighting for..

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Dennis .

Feb 09, 2013 at 20:03

I am not yet a pensioner and don't intend to get in this situation but I wonder how many pensioners are on extended "holidays" in some of these countries?

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George Morley

Feb 09, 2013 at 20:24

Dennis, if you read my comment above, you would see that I had no idea that I would be where I am today but circumstances change. This is one good reason why everyone should be demanding a change to this policy. Mind you it does not take a lot of commonsense to see that this freezing is totally wrong and should be changed now. A pension paid for is a pension deserved and many people in the UK say that we don't pay taxes so we should not expect the uprating which is a failure to understand that we all pay taxes and such comments are made by the uninformed. There is no reason on earth why there should not be pension parity worldwide and you can help to right this wrong.

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Jane Davies

Feb 09, 2013 at 22:26

Dennis, thanks for your interest in this pension injustice. As RobtheFox and George have answered your question for me, thanks guys, I would ask you as a fellow Brit to put the word out there in the UK whenever you can. This is the UK governments grubby little secret ignored by IDS, Webb and Cameron, even though it was a pre-election promise by them to right this wrong, and even though Cameron spouts on about, and here I quote his words "We are doing the right thing by those who have done the right thing all their lives." Lies all lies, not one expat I have spoken to knew about this theft of our pension money and this bunch of hypocrites who "run" the country need to be taken to task over not only another broken promise but they need to be reminded the money in the NI fund is not government money, it belongs to those who paid in for 40 years or more. They have no right to treat the frozen 4% differently to the rest, ALL are entitled to be treated the same and discrimination is illegal. Do please put the word out there for us. Thank you.

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Dennis .

Feb 09, 2013 at 23:54

The whole issue of expat pensions for certain countries is clearly wrong and I guess it comes down to money. It's bit like the private schools issue where 7% of children are involved. Parents are paying twice for their kids' education but the government is more than happy since it also means that they don't have to pay for 7% of the kids to be educated (so where does the money go?).

I think this pension issue has been going on for some years and didn't someone take it to the European Court of Human Rights recently and lost the case?

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Feb 10, 2013 at 00:19

If any of you living in a country where they do not pay increases on state pension do you realise that if you were in a contracted out scheme it is the responsibility of the DWP to pay all the increase on the benefit secured prior to I think April 1988 and from April 1988 to April 1997 it is responsibility of the pension scheme to pay increases up to 3% and anything in excess of 3% by the DWP After April 1997 the pension scheme has to pay anything up to 5%.. The reason I mention this is that not many people realise this so if you do have contracted out pension you will not be receiving increases on that either.

If you do have contracted out pension prior to April 1997 you should approach your occupational pension to see if they will pay the increases on contracted out pension normally paid by the DWP. The DWP have special arrangements in place for public service schemes to tell them when they are not paying the increases on a occupational contracted out benefit. They do not do this for non public service schemes. They have a special instructions to cover this running to about I think 90 pages.which also includes information about people moving to a country where they don't pay the increases.

The reason I know about this subject is that when I married my wife she was a widow and she lost the widows pension when she married me and also ceased to receive increases on part of her contracted out widows pension. I know the rules about increases on contracted out pension.

She contacted her deceased husbands pension scheme and they agreed to take over the increases where the DWP ceased paying the the increases..

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Feb 10, 2013 at 03:45

Dennis - as regards "extended holidays" I would not for one minute suggest that there are not some people who are making fraudulent claims, however, they will probably eventually fall foul of the UK Resident and Non-Resident regulations or some computer matching process.

While I am not familiar with where the 7% education savings go there is no doubt as to where the current £655 million required to uprate frozen pensions goes.

It is held in the ring fenced NI Fund - treated as surplus (which is about £28 billion at present) - passed to the Debt Management Office - and borrowed by the government for "infrastructure projects" like sewage disposal and roads although the government wrongly cite the more emotive hospitals and schools. The interest alone that the government has to pay on this borrowing would cover the uprate per annum twice over.

The government claim it is not affordable but this discrimination has been going on for over fifty years...the trouble with telling lies is that if you do it often enough not only do people start to believe you but you begin to believe it yourself. Is that not so Pensions Secretary Iain Duncan Smith and Pensions Minister Steve Webb?

Kenneth - I am, for my sins, a retired Civil Servant and you are correct about the government responsibility in respect of being contracted out of SERPS and the entitlement to a Guaranteed Minimum Pension (GMP).

In my case for service up to 5th April 1988 the government would normally pay the increase with the State Retirement Pension.

For service after that date the Pension Scheme pays up to 3% of any increase and the government for any increase exceeding the 3% but again, that would be with the State Retirement Pension.

As I live in a frozen country my State Pension does not get the increases and neither do those elements mentioned above...they, too, are frozen.

But , and again I stress this is my position, my pension administrator can pay the pension increases on the Guaranteed Minimum Pension with my Civil Service Pension. To effect this it is necessary for the individual to contact the Pension Service to instruct the Pension administrator to do this.

If anyone is unsure about this aspect then my advice is to contact the Pensions Service.

Hope this helps...meanwhile...Fairness, Equality and Justice, please Minister...and put an end to all your hypocrisy.

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Dennis .

Feb 10, 2013 at 09:33

I don't condone this but one argument put forward for restricting pensions paid abroad is that the money does not generate any economic activity for the UK.

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Feb 10, 2013 at 10:02


A few years ago the DWP and Public service got into trouble because the DWP wern't telling the the occupational schemes that they were paying the increases again because a person had returned to uk or was now living in a country where they did pay the increase so the person concerned was getting a double increase on part of their contracted scheme. I think there are over 20 reasons where the DWP can cease to pay cost of living increases the most complicated being on contracted out widows/widowere inheritedv contracted out pension. The people involved did not have to pay back the overpayments but did have to go several years without any increases on their contracted out pension.

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Feb 10, 2013 at 11:04

Dennis I appreciate that you do not condone the frozen pension policy but I make three points.

First, there is nothing in the NI Act that stipulates where one should spend your pension.

Second, the argument collapses because uprating of pensions is already available abroad in some countries, not only the EEA but also in the likes of Macedonia, Israel, the Philippines and the USA.

Third, the pensioner overseas does generate economic activity by virtue of still being a UK taxpayer.

Kenneth I can certainly see the possibility of duplication. However, the onus initially rests with the pensioner to notify a change of address to the Pension Service. It then becomes the responsibility of that Service to cancel the authority they previously issued to the public sector pension administrator.

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George Morley

Feb 10, 2013 at 13:46

Dennis I would also add that the UK is better off by over 2Billion GBP per year by our not being there due to the big savings they make by not having to give us all of the free benefits:

Free bus passes

Free TV licence

Age addition to pension

Pension credit


Winter Fuel Allowance

Cold Weather Payments

Free Prescriptions.

Free Eye Tests.

Reduced Dental Charges

Christmas Bonus

Free Driver's Licence renewal

Housing Benefit

and there may be some that I am unaware of and I am not saying that the pensioners in the UK should not get these but let' the government be fair, just and honest about the situation overall.

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Peter T

Mar 16, 2013 at 13:30

Men should be complaining about receiving their state pensions years after women get theirs, that is for starters!. Also the working man is being told to work more years to receive pensions whether state or private, I don't include or care for the civil servants who are still getting preferential pensions, these people are the reason the government is overspending each year. Why should any youngster worry about saving, when their working parents have probably been cheated out of their final salary pensions.

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Mar 18, 2013 at 00:38

I'm baffled as to what everyone is on about, people will be better off with this new single tier pension. The only difference will be future payments, anything paid in the past is preserved. Even someone requiring the new 35 years, it makes no difference because the foundation amount derived from the current system will fall into place. That includes women too, they won't get less under the new system, and if they do, then once again the current system foundation amount falls into play.

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fred kenny

Mar 27, 2013 at 10:11

Was wondering if anyone had received information from the DWP regarding contracted out pensions and the new flat rate state pension. In particular for those with state retirement date is after the 6th April 2016 (ie in the new regime). This is my situation by three weeks! I notice KENNETH had sent an email to the pensions minister and was wondering if the reply had covered annual increases for GMP company pensions (currently paid as KENNETH explains partly by the DWP) and whether the DWP would pay these in the new regime? Its complicated and I am suspicious they may try to get away with it in the future.

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Dennis .

Mar 27, 2013 at 13:05

I follow the general principle that if someone offers me something then the offeror has already worked out that it's good for him (and not necessarily me). There are clear issues about people who are unfortunate enough to have chosen a birthdate during the transition to a new scheme. However, after that I can't help thinking that the £144 headline pension overall represents a reduction in what we collect compared with what we put in if you do all the NI (contracted in/out) calculations etc.

One thing that is suspicious is that if you ask for a pension forecast it no longer breaks down the second state pension details as it used to.

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