The goal of some people living in the UK is to move to Spain to start a new life after retirement. After so many years of work, this country offers just what they need: a quiet and entertaining place to enjoy and relax.
It is the perfect plan for many of them, however there are some legal preparations that they have to complete before starting this adventure., for example, they have to apply for a residence permit, find accommodation and if they have a pension, they have to carry out the necessary procedures to collect it in this country.
If the government assigned you a pension in the United Kingdom or you have one in a private institution, it is possible to transfer that benefit the moment you move to Spain, but you have to follow a legal procedure.
In this post, we explain the basic aspects you should know about pension in the United Kingdom and in a next post we will talk about how to collect it from Spain. The more information you have, the easier the process will be for you.
What is a retirement pension?
A retirement pension is an economic benefit that a worker receives when he stops working. This money can be paid by the government or by a private company previously hired for this purpose.
The beneficiary will receive a monthly amount once he is affiliated with a pension and it will be for an indefinite time; that is, when he retires and for the rest of his life. In some types of pension, family members receive the benefit after his death.
When can you retire in the UK?
The retirement age is different in each country, but they are assigned so that people can enjoy it at an age when working is difficult and can affect their health.
Over time, people lose their physical and mental ability to fulfill certain responsibilities, including working. That is why a pension in the United Kingdomis allocated, so that they dedicate their time to rest and prevent the deterioration of their well-being.
Currently, the retirement age in the United Kingdom is from 66 years, however, it will increase progressively in the coming years. By the year 2046, the accepted age will be 68 years.
In some cases, for example, when the worker has a limiting illness or had an accident, retirement comes before the expected date. Under these conditions, retirement is processed by calculating the amount he will receive based on the years of service.
The full pension, according to the pension plan established by the government, is collected only when the person has completed 35 years of contributions to the state.
How much does a British pensioner get?
The amount of the Basic State Pension is £ 134.25 per week, if the worker also receives an Additional Pension due to his profession or health condition the amount increases.
After April 6, 2016, retirees are part of the New State Pension and the amount they will receive weekly will be £ 175.20; that is, each month they will receive between £ 500 – £ 700.
Compared to other countries, retirement pensions in the UK are more demanding and they do not have very high amounts; for this reason, many people hire a private service that allows their heirs to enjoy the benefit.
What is the public pension system in the UK?
The current pension in the United Kingdom is economically based on the “Anglo-Saxon model”, the government provides few services and benefits for private companies to benefit.
Thus, the benefits that you will receive from the state have low amounts and will hardly cover all your needs, you must hire a private service. Now, we explain some levels of contributory pension:
1.- Basic State Pension: Beneficiaries are those people who have contributed to National Insurance for a period of 30 years, receiving a maximum amount of £ 134.25 per week. In some cases, this amount may be taxable.
The amount is revalued annually and will depend on the contributions made in the past. It has to be requested from the state through a legal procedure and in case the workers do not comply with the contribution period, they can be made to receive the total amount established.
2.- Additional State Pension: It is also known as “Second State Pension”. In this case, the retiree receives a higher amount than in the previous pension.
The monthly amount to be received is calculated based on the average salary throughout the worker’s life. He does not have to request it, since it will be received automatically when requesting the Basic State Pension.
3.- New State Pension: It entered into force on April 6, 2016 and replaces the two previous pensions and is received by men born on or after April 6, 1951 and by women born on or after April 6, 1953.
It is based on your contributions to National Insurance and you must have at least 10 years of contributions to apply for it. If you have been contributing for 35 years, you will receive the maximum amount of £ 175.20 per week.
4.- Pension Credit: It seeks to guarantee a minimum income to those people who are close to retirement and who for various reasons do not receive a sufficient amount.
Although the beneficiary receives a small amount of money, it is important to apply for it because it can help him to apply for other types of aid.
In this post we have talked about the pension in the United Kingdom, in the next post, the private system will be explained and how to move them to Spain to start your new life as a retired person.