Two topics are of particular importance to people retiring abroad: their pension (even if they have not reached retirement age) and healthcare provision. Even if you still feel young at heart, you need to face the fact that your health is likely to decline with age and you will become more dependent on the services available. An increasing number of people are members of private pension schemes or have taken out private health insurance. However, few of us can afford to ignore any state benefits to which we are entitled, and this chapter deals principally with these.

 

The UK has concluded a number of social security agreements with other countries including members of the European Economic Area. The EEA, as it will be referred to in this book, comprises the countries of the European Union plus three others. The full list is as follows: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, the Netherlands, Norway. Poland, Portugal, Slovak Republic, Slovenia, Spain and Sweden. Bulgaria and Romania are due to join the European Union in 2007.

 

The other countries with which the UK has an agreement are Barbados, Bermuda, Canada, Cyprus, Israel, Jamaica, Jersey and Guernsey, Malta, Mauritius, New Zealand, the Philippines, Switzerland, Turkey, the USA and the republics of the former Yugoslavia (such as Bosnia, Croatia, Slovenia, Macedonia). More agreements of this nature could be signed in the future, so if the country you are retiring to is not in the above lists you should consult with the Benefits Agency.

 

Since the treaties differ to a greater or lesser degree (not all include provision for free medical treatment, for instance), you ought to obtain a copy of the relevant leaflet from the Agency outlining the benefits for which you are eligible and how to claim them.If your local office does not have the relevant leaflets, such as NI38 (see Appendix C) you can contact the Newcastle main office.

Your State Pension

If you are of pensionable age or in receipt of a widow’s or invalidity pension you will need to inform the Pensions Service and discuss arrangements for the payment of your pension when you are abroad. If your local social security office is not able to advise you or supply you with the necessary forms for completion, you should contact the International Pension Centre giving your full name, date of birth and, where possible, your National Insurance or pension number. The address is in Appendix C.

If you live in Northern Ireland you should direct your enquiries to the Social Security Agency (Overseas Branch).

You can choose various methods of payment:

• by credit transfer to your bank or building society in the UK. If you are planning to stay abroad for only part of the year, this may be the best plan, since you will not need to change payment arrangements when you move;
• by credit transfer to an overseas bank or institution where such a facility is available;
• by a sterling payment cheque to you, your overseas bank or an agent nominated by you every four or 13 weeks;
• in a lump sum on your return (if you are away for no more than two years).

 

At the time of writing special arrangements need to be made if you are going to certain countries.

Applying For A Pension When Abroad

If you reach retirement age after you have moved abroad you will normally receive a letter from the Pensions Service inviting you to claim a UK retirement pension, provided you have kept the Service posted about any changes of address. If you do not receive a letter around four months before your 60th birthday (in the case of a woman) or your 65th (in the case of a man) you should contact the Service.

If you reside in any European Union country you may make a pension claim direct to your country of residence rather than to the one in which you have been insured. The country in which you live will then pass on the details of your claim to the Pensions Service.

If you have made social insurance contributions to more than one country in the European Union (as well as certain other countries), your pension will be made up of pro rata contributions from the UK and the country of residence.

The following procedure would be used in calculating pension entitlement:

• Each country works out the amount of pension payable on the basis of insurance under its own social security scheme only.
• Your social security records are combined and each country works out what would be payable if your social security contributions had been paid into its own social security scheme.
• You are informed by each country which of the two calculations produces the highest rate of pension, and this will be paid to you automatically.