Pensions Archives - Holborn Assets Cyprus

How Will the New Tax Year Affect Your Pension?

user — Mon, 15 Apr 2019 10:24:13 +0000

The new UK tax year began a fortnight ago on 6th April 2019. So how will the new tax year affect your pension? Well it’s good news. If you receive a state pension or pension credits, you will get more. And, if you are auto-enrolled with a work pension in the UK, you and your employee will be making bigger contributions every month to swell your pension pot.

UK State pension – 2.6% increase

As of April 6th 2019, the UK state pension went up by 2.6%. If you receive the new State Pension, you will now receive £168.60 a week. That’s a weekly increase of £4.25. Annually you will be £221 better off. If you receive the Basic State Pension, you will now receive £129.20 a week. That’s a weekly increase of £3.25. Annually you will be £169 better off. Pension credits – for those pensioners on lower incomes – also rose by 2.6% in the new 2019 tax year.

Why has the UK state pension risen by 2.6%?

Every year the UK government is obliged to adjust the payout of the UK state pension. How does it decide what to do? There is a system in place called “the triple lock system”. The triple lock guarantees that the state pension rises – whatever happens! So that’s good news for Brits. Three figures are used to make the calculation: earnings growth, Consumer Price Index (CPI) and 2.5%. Whichever of these three percentages is the highest is applied to the state pension. Until 2019, the UK state pension has risen at the beginning of each new tax year by an average of 3.2% since 2011. April 2011: 4.6% April 2012: 5.2% April 2013: 2.5% April 2014: 2.7% April 2015: 2.5% April 2016: 2.9% April 2017: 2.5% April 2018: 3.0%

UK pension Auto Enrolment – 3% increase

The UK’s automatic enrolment scheme for pensions mean that you and your employer must make a minimum contribution to your workplace pension each month. Together, the two contributions make up a total minimum contribution. And this figure has risen, as of April 6 th 2019, from 5% to 8%. As an employee, the minimum amount you must contribute to your workplace pension went up from 3% to 5%. So that’s a dent on your monthly income of 2%. Not ideal – but it is good news for you in the long-run as your pension pot will swell. (And it’s now the law, so there’s nothing to be done about it). The other good news is that the minimum contribution your employer must make has also risen – from 2% to 3%. These changes are implemented automatically. As an employee, you do not have to take action. (Table from thepensionsregulator.gov.uk) For more information on changes to auto-enrolment in 2019, read this guide for employers from the UK pensions regulator.

How do I get a grip on my pension situation?

Managing pensions can be confusing, especially for expats who must tackle cross-border complexities in regulation. If you are feeling at a bit of loss over where you stand with your pensions, take action! Your eligibility for a UK state pension depends on how many National Insurance Contributions (NICs) you have made. Check your NIC situation online at the UK government NICs website – and use our guide here to navigate the site. Take advantage of the UK Pensions Dashboard when it comes in. There’s over £400m in lost pensions lying around the UK financial system. And, with an average of 11 jobs in a lifetime, Brits often have many pensions to keep track of. So the UK government is putting in place a scheme to provide every Brit with an online pensions app that shows them all their pensions together. (However, in the first rollout of the dashboard, planned for this year, the state pension will not be shown.) Unclear at what age you will receive your UK state pension? Currently, the UK state pension age for both men and women is 65 years old. Use the HMRC’s State Pension Age Calculator to confirm your eligibility. Also note that the state pension age is set to rise over coming years.

Ask an IFA!

It is great that there are more resources online to check your pension yourself. But loads of data does not help much if you do not know how it all fits together. And that’s where your IFA can help. Your IFA can show you how your work and state pensions link up with the rest of your financial picture. Your pensions are the centrepiece of a decent retirement strategy, so it is important to manage them with care.

The post How Will the New Tax Year Affect Your Pension? appeared first on Holborn Assets Cyprus.

UK Pensions Dashboard – Coming in 2019

user — Tue, 11 Dec 2018 17:16:09 +0000

The new UK Pensions Dashboard will be unveiled in 2019 – but State Pension data will not be available at first.

What is the Pension Dashboard?

The Pension Dashboard will show Brits (expats too!) an overview of all their pension savings in one place; a complete picture of your retirement funds. This is great news if you really want to get a handle on your retirement planning. The UK Government made a commitment during the 2016 budget to collaborate with the pensions industry to deliver the Pension Dashboard. The purpose of the Pensions Dashboard is quite simple. There is an estimated £400 million in unclaimed pensions in the UK. That’s a lot of money going spare. But it’s perhaps not surprising when you consider how many jobs a Brit may move through over the course of their career. It is estimated that the average adult in the UK will have 11 different jobs during their working life. That means they may have workplace pension savings in up to 11 different pots -as well as any private pensions and their state pension on top. Keeping track of these pensions can prove challenging to even the most organised of people! The Department of Work and Pensions has found that 1 in 3 of us find it hard to keep track of pensions. Consider also if you’ve moved house, or left the country to work abroad. It’s easy to overlook contacting all of your pension providers to update your details and even easier to lose track of everything you’ve accumulated in different pots over the years. It can leave you with very little idea at the end of your working life as to how you may go about retrieving all of these lost pots; let alone having any concept of their worth. This is why the Government has prioritised this issue as a “significant barrier to effective financial management” and developed the Pension Dashboard to solve the current crisis.

How will the Pensions Dashboard work?

The dashboard aims for simplicity of use. There will be four basic steps to how it works:

You will be required to log in and verify your identity, much like you do currently with gov.uk.
You must give your consent to share your data securely with verified pension providers and third party handlers (this is much like the process involved with digital banking).
All the different pensions schemes’ and providers’ databases will be searched for details that match yours.
The system reports back, in one easy-to-read page, all of the pension details that match yours, giving you a clear picture of what you’ve already accumulated, and an estimated value of your monthly or annual income on retirement.

It is also expected that you will be able to click on each pension listed and find out more about it: like the contact information for the pension provider, for example. Useful! The Government has been collaborating with businesses from across the pension industry aswell as regulators, and financial technology (FinTech) companies to develop the architecture to make this possible. The Pensions Dashboard website states that the “pension finder service enables secure communications between all pension providers, dashboard hosts, and industry partners who are involved with the systems,” revealing that their eyes are on the safety of your data.

Does the Pensions Dashboard include the state pension?

Yes, it will do eventually. But not when the scheme opens in 2019. There will be a delay until state pension information becomes available: that’s the latest word this week reported widely across the press. Note that you can already access your state pension and National Insurance information online through the Government’s website. The Pension Dashboard will bring the improvement that it will collate this state pension information with all of your other pension funds to give you a comprehensive savings overview.

I’m concerned about the safety of my data …

The dashboard will not store all of your pension information in a huge database that would act like a golden carrot to cyber-criminals. Rather it will search and retrieve information as you request it. Part of the process of developing the prototype has been agreeing data standards and the architecture needed to keep your data safe.

I’m an expat – does this affect me?

If you’ve lived and worked in the UK and have a UK state (or private or workplace) pension, you can use the Pensions Dashboard. With so much uncertainty in the political and economic climate generated by the ongoing negotiations over Brexit, this is a particularly pertinent time for expats to pay attention to their pensions.

When can I get started on the Pensions Dashboard?

The prototype has been developed and has proved its viability. It is hoped that 2019 will see the widespread roll out of the pensions dashboard programme, but this (say the Government) depends on the participation of all pension providers. A semi-comprehensive pensions dashboard would defeat the object. All the information needs to be available. So it can’t be finished until that’s happened. In reality, the Pensions Dashboard is a system that is long overdue and much needed to reflect people’s working lives in the modern world – and we welcome any developments that help you keep a track of your pension and retirement savings.

The post UK Pensions Dashboard – Coming in 2019 appeared first on Holborn Assets Cyprus.

When will I get my UK State Pension?

user — Sat, 14 Jul 2018 23:22:25 +0000

Are you, like many British expats and UK citizens alike, confused about the age at which you can claim your UK State Pension? Are you wondering exactly when you’ll be able to retire and how much you’ll get? With changes to the UK State Pension entitlement age to be implemented in November 2018 (as well as more on the horizon), we take a look at what these changes mean for you, and help you make sense of your State Pension eligibility.

When will I be eligible to claim my UK State Pension?

Until this year, the State Pension entitlement age was fixed at 65 for men, and 60 years of age for women. But in 2017, Government ministers announced that the UK State Pension age would rise to 68 from 2037, and that the increase would be rolled out in increments. From November 2018, the age at which you will become eligible to claim your UK state pension will change to 65 for both women and men. Further changes are planned, and the State Pension qualifying age will rise to 66 by 2020, 67 by 2028, and 68 by 2037.

How do I check my UK State Pension qualifying age?

You can find out how these changes affect you, and get your exact State Pension age by checking the HMRC website. The State Pension Age Calculator tells you at what age you’ll be able to claim your State Pension, based on your date of birth and gender.

How much will my UK State Pension be worth?

How much State Pension you receive is dependent upon the number of years National Insurance Contributions you have made. To receive the full State Pension, which currently stands at £164.35 per week, you need to have made 35 qualifying years National Insurance Contributions. If you have a shortfall, your pension will be calculated according to the number of years you have contributed. HMRC introduced a State Pension top-up scheme to allow savers to fill in any gaps in their National Insurance record – a particularly valuable scheme for women who have taken a career break to become mothers and expats who are working abroad. N.B. You need to have at least 10 qualifying years to receive any State Pension at all. You can check your State Pension forecast by visiting the HMRC website and using the State Pension Calculator. This tells you how many qualifying years National Insurance Contributions you have made, what you pension is worth based on those years, and how many more qualifying years you need to get the full State Pension. In order to access this service you need first to have set up a “Government Gateway” account with HMRC. Visit our guide on how to check your National Insurance Contributions for a complete run through on using this service. “This doesn’t seem fair! A woman can retire now aged 60, but by the time I retire, the State Pension age will be 68 or maybe even higher! Why?” In short, the UK has a pension crisis that reached new heights this year. The Office of National Statistics revealed pension debt rose to a staggering £7.6 trillion. The hard facts are that we are living longer and spending longer in retirement than ever before – which doesn’t sound like a bad thing, unless you’re a pension provider! Consider that when the State Pension was introduced in 1948, a 65 year old was expected to receive an average 13.5 years pension. In 2017, a 65 year old could expect to live for another 22.8 years – that’s one heck of a difference!

I live outside the UK, how do these changes affect me?

As a British National, you are entitled to your UK State Pension, regardless of where you spend your retirement. The changes to the UK State Pension qualifying age apply in the same way to British expats. As an expat you may want to remain mindful of keeping up with your National Insurance Contributions whilst abroad to ensure your entitlement to a full State Pension. Here at Holborn, we have helped thousands of customers to claim their UK State Pension. If you’re worried about your NICs, read our article on expats and National Insurance. Your UK State Pension is just one way that you can save for the future and generate income in your retirement. Contributing to a workplace or private pension are also great ways to finance your retirement lifestyle. Speak to your Holborn advisor today about your retirement and future finance plans to ensure you are optimising your saving potential.

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