Info for UK retirees in Thailand

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Info for UK retirees in Thailand

Post by Gaybutton »

£0.6bn a year to uprate UK pensions for Thai retirees

by Michael Bridge

May 12, 2022

Many of you signed the UK Government petition regarding our UK pensions being indexed linked.

Having reached over 10,000 signatures the UK government had to respond. Here is their response received this week.

The Government has responded to the petition you signed – “Give U.K. pensioners living abroad increases with parity as those in the U.K.”.

Government responded:

There are no plans to change the policy. The Government continues to up-rate the State Pension where there is a legal requirement to do so.

The UK Government has no plans to change the current arrangements for payment of UK State Pension overseas.

The United Kingdom’s state pension system is primarily designed for the benefit of those who are resident in the UK. It is, however, payable worldwide and is uprated in the UK and also in countries abroad where there is a legal requirement to do so.

This is a longstanding policy and has been implemented by successive Governments of all political persuasions for over 70 years. The policy has been the subject of Parliamentary debates over time and has been approved by Parliament and the Courts.

The rate of National Insurance contributions paid has never earned entitlement to the uprating of pensions payable abroad. This reflects the fact that the UK scheme is primarily designed for those living in the UK.

The National Insurance scheme operates on a “pay-as-you-go” basis. Contributions paid into the National Insurance Fund in any year finance contributory benefit expenditure in the same year.

A person’s contributions provide a foundation for calculating their future benefit entitlement but do not actually pay for those benefits.

UK expenditure on health care costs depends on where the UK pensioner settles. While the location may be decided by the pensioner, individual countries have their own immigration policies in relation to older economically inactive people.

Paying uprating to UK pension recipients in countries where it is not currently paid would mean an immediate increase in costs.

There are now around 1.2 million UK State Pension recipients who are overseas residents and around 0.5 million of them do not receive increases.

The cost would be £0.6bn

It would cost over £0.6bn extra a year to up-rate these pensions fully, that is to pay the pension at the rate that would be applicable if the pensioner had lived in the UK throughout.

Paying future increases only would cost tens of millions in the short term but would lead to the cost of full uprating (£0.6bn) in the longer term as older pensioners died and new pensioners became entitled to fully up-rated state pensions.

Cost has always been a factor in deciding whether pension increases should be paid in overseas countries and successive governments have taken the view that it would be unfair to impose an additional burden on contributors and taxpayers in the UK to fund increased pensions for those who have chosen to live abroad.

The Government concurs with that position. Ultimately, there is a choice for the individual to make where to live, and what the consequences are should that choice be somewhere other than the UK.

The rules on uprating the State Pension are clear and well publicised.

So, the choice to migrate or not remains a choice for the individual.

UK State Pensions paid to people living outside the UK also go to people who migrated for economic or other reasons well before they reached pension age.

Department for Work and Pensions

Click this link to view the response online: ... sponse=yes

The Petitions Committee will take a look at this petition and its response.

They can press the government for action and gather evidence. If this petition reaches 100,000 signatures, the Committee will consider it for a debate.

The Committee is made up of 11 MPs, from political parties in government and in opposition. It is entirely independent of the Government.

Find out more about the Committee:

The Petitions team
UK Government and Parliament

So that’s the response probably written by some press officer or a junior secretary at the Pensions Department and then passed onto this Petitions team.

So, aren’t we worth a paltry £0.6bn a year??????

UK Defence spend

In 2020/21, defence spending amounted to £42.4 billion in cash terms.

This represents a nominal increase of £2.5 billion on the previous year, and real terms increase of £1.7 billion.

Originally reported by The Economist, guided missile technology is one of the most expensive sectors in smart weaponry.

A single medium to long-range subsonic Tomahawk cruise missile costs roughly $1.5 million, and 50kg air-to-ground Hellfire rockets cost an eye-watering $115,000 each.

If you are a UK MP, they can claim £9,000 a year just for their postage expenses. There are 650 elected MP’s so they can claim together £5,850,000 just on postage.

According to the Taxpayers Alliance, the total cost of MPs was up 6.47 per cent last year to £127.6 million, according to figures released today by the Independent Parliamentary Standards Authority (IPSA).

The average cost of an MP was £157,747 in the 2019-20 financial year, which included expenses claims for travel and food of around £6,903 for each member of parliament.

A further £718,733 was spent on hotel claims as part of the MPs’ accommodation budget.

So, what I am trying to say is by just cutting back on a few missiles, or a rusty boat, we could eventually get a fair deal and receive the same monthly pension as folks retired in Spain or the Philippines. ... -retirees/

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Re: Info for UK retirees in Thailand

Post by Jun »

The defence spending argument is irrelevant.

As for the pensions, this policy is something of a missed opportunity. People living abroad will mostly not be a burden on the NHS and since this Soviet creation is barely capable of treating people living in the country, encouraging a few more to emigrate could make sense. Even if they indexed pensions, I expect the net expenditure on pensioners abroad would be lower than pensioners at home.

However, the rules are clear. So anyone planning to retire abroad should manage their finances accordingly.
e.g. Use all legal methods to minimise the tax bill, as you won't be getting much back.
Build up a private pension, via Pensions and ISAs.

Retiring to a tropical paradise requires more than the state pension.

Also, bear in mind that even in a period of low inflation, at 3% a year, your non-indexed pension loses 46% of it's value in 20 years
At current inflation rates, near 8%, your pension loses 82% of it's value in 20 years.

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Re: Info for UK retirees in Thailand

Post by billyhouston »

What we see above is the government's disingenuous reply whenever this subject is raised. What they are really saying is that those involved are probably unable to vote "and we do this because we can." One particulat anomaly comes to mind. If you live in Detroit, Michigan your pension is uprated but if you live a mile away across the Detroit River in Windsor Ontario, your pension is not uprated. This is true of many Commonwealth coutries. Retirees visitng family in the UK are not permitted to use the NHS, though in its present state I don't know who would wish to.

Finally, when you pop your clogs, they still want 40% Inheritance Tax.

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Re: Info for UK retirees in Thailand

Post by gerefan »

billyhouston wrote:
Fri May 13, 2022 1:08 am
Finally, when you pop your clogs, they still want 40% Inheritance Tax.
So if I make a will in Thailand and my affairs are wound up there I have to pay UK inheritance tax?

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Re: Info for UK retirees in Thailand

Post by billyhouston »

As I understand it, if you have UK domiciled status then your overseas estate is subject to UK inhertiance tax. It's very difficult to lose your UK domicile, which is not the same as residence. I have a Thai will, which deals with my assets in Thailand, but that won't stop them coming after me for IHT. I'm not a lawyer but have discussed this matter with professional people.

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