State Pension provides essential financial support every month for over 12.4 million people across the UK. This regular payment is available for those who have reached the UK Government’s eligible retirement age, which is now 66 for both men and women.
The retirement payment is not paid automatically, it has to be claimed by those of eligible age, because some people choose to defer making a claim in order to keep working and contribute more towards their pension pot.
However last year, the UK Government confirmed plans to change the rules on how State Pension is calculated from January if you move abroad because the UK has now left the European Union.
The GOV.UK guidance states that the change in State Pension calculation will affect people who move to live in the EU, EEA or Switzerland and those who have previously lived in:
Australia, before March 1, 2001
Canada
New Zealand
The GOV.UK website confirmed that from January 1, 2022, you will no longer be able to count periods living in Australia (before March 1, 2001), Canada or New Zealand, towards calculating your UK State Pension if both the following apply:
you are a UK national, EU or EEA citizen or Swiss national
you move to live in the EU, EEA or Switzerland on or after January 1, 2022, including if you move to live in another EU, EEA country or Switzerland on or after January 1, 2022
The Department for Work and Pensions (DWP), which delivers State Pension, explained on GOV.UK : “The change will affect you whether or not you have claimed your UK State Pension yet.
“Your UK State Pension will be calculated, or recalculated if already in payment, using only your UK National Insurance record.”
Who is not affected by the change?
DWP states that you will not be affected by the change if you either:
live in the UK - whatever your nationality
are a UK national, EU or EEA citizen or Swiss national who was living it the EU, EEA or Switzerland by December 31, 2021
The guidance clarifies that as long as you continue to live in the same country, you will still be able to count time living in Australia (before March 1, 2001), Canada or New Zealand to calculate your UK State Pension.
If you live in an EU or EEA country or Switzerland, your UK State Pension will continue to be increased each year in line with the rate paid in the UK.
What are the State Pension payment rates for 2021/22?
The current rate for people over the age of 66 on the full, new State Pension is £179.60 per week.
Anyone on the 'old' basic State Pension (category A or B), is currently paid £137.60 per week.
State Pension payment rates will increase by 3.1% from April 11, 2022 as a result of the 'double lock' rule temporarily in place, replacing the 'triple lock' guarantee.
This is due to the removal of the earnings element of the triple lock rule as a result of the coronavirus pandemic - read more about this here.
You can see how much State Pension you will receive and when you can retire, using the UK Government’s online forecast tool here.
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