Brits warned over pensions after £3k tax bills - 'check your rights'

An expert has told Brits to check their rights after pensioners were landed with £3,000 bills. British expats - retired public servants in receipt of UK Government pensions, including teachers and police officers - living in France claim they were hit with five-figure tax bills on their public sector pensions, despite regulations that should shield them from French levies. "Expats are eligible to claim a UK State Pension, provided they have accumulated sufficient qualifying years of National Insurance contributions," William Cooper, Marketing Director at William Russell said.

"This varies depending on when you first started working, but a good rule of thumb for a full state pension means at least 35 years of paying National Insurance in the UK. The pension can be paid to you regardless of where you live, but it's crucial to understand how living abroad may affect the amount and any potential increases." Different countries have different pension arrangements as regards UK expats, he added.

Mr Russell said: "If you reside in certain countries, typically those with a reciprocal social security agreement with the UK, your state pension may still increase each year as it would if you were in the UK.

"However, in other countries, the pension may be 'frozen' at the rate it was first paid.

"For those considering transferring their pension abroad, it's essential to explore options like a Qualifying Recognised Overseas Pension Scheme (QROPS), which may offer tax advantages or more flexibility."

The expert urged Brits to "always seek guidance from a financial advisor with international expertise to navigate currency fluctuations, tax implications, and local pension regulations".

How to apply for QROPS

In terms of applying for QROPS, Brits are advised to:

Check your national insurance record - Log into the Government's online service to view your national insurance record. This will show how many qualifying years you have accumulated. Generally, you need at least 10 qualifying years for a minimum state pension, and 35 years for the full amount, William Russell suggests.

Use the state pension forecast service - You can use the state pension forecast service to see how much you might get, and when you can start claiming. This service provides an estimate of your state pension based on your current national insurance contributions.

Make up any gaps in your national insurance record - If there are gaps in your contributions, you may be able to make voluntary national insurance contributions to increase your pension entitlement. This can be particularly useful for expats who may have missed years while living abroad, those in the know suggest.

Check if your country of residence impacts your pension - Verify whether the country you live in has a reciprocal social security agreement with the UK, as this can affect whether your pension will increase annually.