Foreign Wives of British Expats to Lose State Pension
In a new proposal by the British government to cut spiraling UK debt, foreign wives of British expats living abroad will have their state pension cancelled. British pensions minister Steve Webb said too many foreign people who have “never set foot in Britain at all” are receiving UK pensions. The new law being proposed will make sure that no foreign wives receive a UK state pension. In fact for British women married to foreign nationals, the same rule applies to their husbands.
If a man has a basic pension (*) from the British National Insurance Scheme, he can get an additional pension for his wife. It does not matter if his wife is not British and has never worked in Britain. These ‘category B’ pensions are to be cancelled. The wife used to get around 60% of the husbands pension. This has now changed to zero. I can’t imagine the grief many British expats out here will get trying to explain to their wives why they will be losing their yearly income.
Interestingly, whilst researching this article, when I tapped into Google ‘Thai wives’ before I got to the next word ‘pension’, the article, ’Why Thai women cut off their husbands’ penises’ came up. Hopefully the two aren’t linked.
Brits in Thailand get a double whammy as their state pensions are frozen. British expats in many parts of the world already have their state pension frozen meaning it does not increase in line with inflation once they live in the UK. Countries such as Australia, Canada and Thailand do not have double taxation agreements that allow for UK state pension increases.
For many British expats living offshore who have been banking on this income, it is another kick in the gut. Whilst I understand that the UK government need to cut their debt, this squeezing of pensioners’ incomes could backfire in the end with more pensioners returning to the UK earlier than expected and claiming more UK benefits as well as using the NHS more costing the UK tax payer more money in the long run.
Under current law, the spouses of British men or women are entitled to claim a “married person’s allowance” based on their partner’s history of National Insurance contributions.
But legislation to be announced on Wednesday will include proposals to end claims for such allowances and introduce a new flat-rate state pension, based on individual contributions paid to the UK government during a person’s working life. According to government statistics, married person’s pensions are paid to 220,000 people living outside the UK, half of whom are foreign citizens who have never been to Britain.
It does not matter if your wife is from Australia, New Zealand, Spain, Thailand or the Philippines and you have married them in the UK. Unless they have contributed to National Insurance over the years, they will no longer qualify for a UK state pension.
Mr Webb told the Daily Telegraph that the current situation, in which foreigners receive pension payments based solely on their spouse’s British work history, is “unacceptable”.
Spouses who qualify under the current rules can receive as much as £3,500 per year or more than 160,000 baht (for those with Thai wives for example).
“Most people would think, you pay National Insurance, you get a pension. But folk who have never been here but happen to be married to someone who has are getting pensions,” he said.
“There are women who have never been to Britain claiming on their husband’s record. There are also men who have never been to Britain claiming on their wife’s record.”
Mr. Webb says that it is fair because some of these have never put into the British system, although British born wives who have never worked would still receive the pension.
You can read more here from the Telegraph about men who move abroad to marry Thai brides they met online adding to the cost of state pensions for foreigners who have never lived in Britain.
The suggestion by the government that Brits are marrying foreign wives to receive an extra pension income is ridiculous. Most men would spend much less money if they remained single. There are more British guys marrying Thai women because they want to live in Thailand. Later on they find out they can get a pension income for their wives.
So, What UK State Pension Do You Get As a British Expat?
If you reached retirement age before 6 April 2010 you will be subject to the old rules. If you reached retirement age on or after 6 April 2010 you will benefit from the new rules.
Under the new rules, to qualify for a full (100%) Basic pension, you must have contributed for 30 years or more. Each qualifying year gives you 1/30th of the basic pension. You can get a part pension even if you contributed for only 3 years.
NEWS UPDATE: A white paper has been published regarding the single tier pension and 35 years will be required from 2018. Click here for more info on the new single tier UK state pension proposed.
Under the old rules, to qualify for a full (100%) Basic pension you must have contributed for most of your working life from age 16. The minimum pension payable is 25% of the standard rate, based on years of contribution, with a minimum of 11 years for men and 10 years for women. If your contribution record is less than this, you may not be eligible for any UK pension.
For each additional contribution year the percentage rises by 2% or 3% up to the maximum of 100%. Periods in which you did not contribute may nevertheless count as contribution years, earning you a higher percentage.
Among such periods are those during which you may have lived and worked in a European Union country, periods of sickness, periods when you were allowed to be out of the work force because of home responsibilities and, of course, any periods in the armed services.
Anyone who has missed pension contributions can back pay their contributions to HMRC. Send us an email and we will send you the necessary forms to make up your National Insurance contributions to make sure you get your state pension.Foreign Wives of British Expats to Lose UK State Pension by Richard Malpass