State pension is set to change for many Brits next year, and it’s all down to Brexit.
The amount people get paid will be altered, depending on where you live.
The UK Government recently announced plans to change the rules on how State Pension is calculated if you move abroad because the UK has now left the EU.
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:
The GOV.UK website states 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, according to the Daily Record.
What are the current State Pension payment rates?
State Pension payments increased by 2.5 per cent in April.
This means people over the age of 66 on the full, new State Pension are now receiving £179.60 per week – an increase of £4.40 on the 2020/21 rate of £175.20. This amounts to an extra £17.60 a month and £228.80 for the 2021/22 financial year.
Anyone on the ‘old’ basic State Pension (category A or B), is now being paid £137.60 per week – a benefit increase of £3.35 on the 2020/21 rate. This equates to an extra £13.40 a month and £174.20 for the 2021/22 financial year.
The annual rise is a result of the ‘triple lock’ ruling, which is a safeguard that currently ensures State Pension does not lose value because of inflation.
There have previously been calls to scrap or modify the triple lock ruling in the wake of the coronavirus pandemic, amid fears that it could become too expensive to maintain.
The triple lock rules mean that the payment increases each year by whichever is the highest out of:
If you would like to see how much State Pension you will receive and when you can retire, use the UK Government’s online forecast tool here.