Will I be covered by social security in the UK?
This depends on your nationality and whether you have previously paid any UK National Insurance contributions. If you are a national from the European Economic Area (EEA) you will normally be entitled to the same benefits as a UK citizen subject to certain conditions; find out more from the Department of Work and Pensions.
EURES, the European Job Mobility Portal has useful information regarding specific benefits and your entitlement to them as an EEA national.
If you are from outside the EEA your home country could have a separate agreement with the UK regarding social security. You can find a list of these agreements on the Department for Work and Pensions website.
What are National Insurance contributions?
You pay National Insurance contributions (NICs) to build up your right to social security, benefits and a pension. NICs are automatically deducted from your wages or will be calculated from your self assessment tax return. You pay a different class of NIC depending on your situation: if you’re employed and earning over a minimum threshold, you pay Class 1 NICs; if you are self-employed you pay Class 2 NICs at a basic flat rate and Class 4 NICs as a percentage of your taxable profits. If you have gaps in your national insurance record, or are not paying national insurance contributions because you are on a grant, you can make voluntary contributions (Class 3 NICs) if you wish to protect your right to a UK pension.
For more information about NICs, including how much you could be expected to contribute, visit Directgov.
How do I get a National Insurance number?
You need to apply through your local Jobcentre Plus or social security office, who will arrange an interview with you. Find out more, including details of your local office, from the Department for Work and Pensions.
Should I continue to pay into my home country social security scheme?
In some cases it may be advisable to continue to pay into your home country’s social security scheme, at a lower rate, in order to protect your rights to pensions etc. You should check this with your home country social security office.
What is the UK State Pension?
The state pension in the UK is currently in two parts; the basic state pension, and the state second pension. Both depend on the National Insurance Contributions (NICs) which you have made, but whereas the basic state pension is currently a flat rate, depending only on the number of years that you have paid NICs, the state second pension is linked to how much you earned and how much National Insurance you have actually paid. NICs are automatically deducted from your salary by your employer.
Basic State Pension
In 2011/12, the full basic state pension is £102.15 per week for a single person. To claim a full basic state pension, you will need to have made 44 years of national insurance contributions (less for women reaching retirement age before 2020). If you have not made the required number of contributions, you may still receive a reduced state pension. To get the minimum basic state pension, which is worth 25% of the full pension, you will normally require 10 or 11 years of contributions.
The State Second Pension
This depends on your earnings whilst you have been paying NICs. It is only available to people paying Class 1 NICs, i.e. only people who are employed (not self-employed) and earning between the 'lower earnings limit' (£102 a week for 2011-12 tax year) and the 'primary threshold' (£139 a week for 2011-12 tax year). If you wish, you may be able to contract out your State Second Pension to a different pension scheme. Find out more at the Pension Service website.
Changes to the UK State Pension
The Pensions Act 2011 was launched on 3 November 2011. This detailed a comprehensive overhaul of the pensions system. More information can be found on the Department for Work and Pensions website.
What is the State Pension Age?
The age at which you can claim basic state pension is currently 65 years for men and 65 years for women. This is anticipated to further increase, for both men and women, to 68 years by 2044.
Can I claim UK state pension in another country?
If you have paid NICs in the UK you should be able to claim the state pension even if you no longer live in the UK. However, the amount will depend on the number of qualifying years of NICs you have made, and the country in which you live.
If you live in an EEA country, you should be able to claim UK state pension which will increase in line with inflation, but if you go to a country outside the EEA your pension will not be inflation-linked unless there is a special agreement between the UK and your country of residence. For more information visit the Pension Service living overseas page, provided by the Department for Work and Pensions.
What other pension schemes are there?
As the state pension is relatively low, individuals are encouraged to pay into other pension schemes to give them an additional income when they retire. There are several types of pension scheme:
- Occupational pension schemes (also called work pensions or superannuation schemes). This is where your employer offers you an additional pension scheme and normally both you and your employer pay contributions to the scheme.
- Personal pensions. This is where you take out a private pension with a pension provider and regularly contribute to it yourself. However, some employers may also contribute to your personal pension.
- Stakeholder pensionsThese are flexible pension schemes where you do not have to pay in a fixed amount of money each month and the management charges are low. Current legislation states that if you take out a stakeholder pension whilst you are resident in the UK you can continue paying into it for five years after you leave the UK to take up residence elsewhere.
You can get further advice about all types of pensions from The Pensions Advisory Service
Can I transfer funds from existing pensions?
Although it depends on the individual scheme, it is often possible to transfer funds from an existing pension (either in the UK or abroad) into a UK pension plan. However, sometimes it may not be profitable for you to transfer existing schemes into a UK scheme, particularly if you do not plan to stay in the UK for a large amount of time. You should contact your UK pension provider to discuss your options for transfer.
What if I have problems?
If you encounter problems linked to moving within the EU you could contact the Citizens Signpost Service. The Citizens' Signpost Service (CSS) is a team of independent legal experts providing free and personalised advice on your rights in the EU - in your own language and within a week of your request.