Overseas pensions claimants dealt blow by the government

7 May 2013

Retirees claiming a pension based on their partner's National Insurance (NI) contributions could lose out on thousands under new government rules aimed at stopping people claiming from overseas.

The government is ending 'derived entitlement' to the basic state pension, where someone is claiming a married person's pension or a widow's pension based on their spouse's NI contributions, rather than their own. Pensions minister Steve Webb called the current policy "outdated, unfair and unsustainable."

According to the government, the 220,000 people already receiving a pension derived from their partner's contributions will not be affected. However, the new plans mean that after 2016 new retirees will not be able to sign up to claim the pension.

This is in a bid to stop those living overseas receiving the pension, despite not having paid any national insurance contributions themselves, the government said.

Find the best annuity rate for your circumstances

Webb told the BBC: "These changes will affect fewer and fewer people in the UK - because if you've spent your time here you build up a pension yourself - but they are affecting more and more people outside the UK who have never put anything into the system and that seems to us not fair."

The changes are part of the Pension's Bill – the government's overhaul of the current pensions system – to be introduced in 2016.

This includes the new flat-rate state pension, which gives all claimants the same single rate of £144 a week. For more on how the introduction of the flat-rate state pension affects you see our story on the topic.

How the changes to 'derived entitlement' affect you

What's changing?
From 2016 new retirees will no longer be able to sign up to claim a pension based on their husband or wife's NI contributions, rather than their own.

Who is affected?
It will affect those trying to claim a married person's pension or widow's pension based on their spouse's contributions if they retire after 2016. Those already claiming the pension will be unaffected.

What does it mean for people already getting the pension?
The DWP says, those currently receiving the benefit will not be affected by the change, as it only affects those trying to sign up after 2016.

Add new comment