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Overseas UK pensions 'blocked for spouses' Overseas UK pensions 'blocked for spouses'
(about 3 hours later)
The government is planning to stop giving people who live abroad a British state pension allowance based solely on the employment record of their spouse. People living abroad will no longer be entitled to a British state pension based solely on their spouse's work history, under government plans.
Pensions Minister Steve Webb said some of those claiming a married person's allowance had never visited Britain. Pensions Minister Steve Webb said some of those claiming a married person's allowance had never been to the UK.
Some 220,000 overseas residents receive such payments - up from 190,000 a decade ago - at a cost of £410m a year. Some 220,000 overseas residents receive this payment at a cost of £410m a year.
The measure will be part of an overhaul of the state pension, to be included in the Queen's Speech on Wednesday. The measure will be part of an overhaul of the state pension, to be included in the Queen's Speech on Wednesday. Existing pensioners will be unaffected.
The Pensions Bill will introduce a new flat rate pension based on individual contributions during a person's working life.The Pensions Bill will introduce a new flat rate pension based on individual contributions during a person's working life.
But current rules allow spouses to claim a "married person's allowance" based on their husband or wife's history of National Insurance contributions. 'Unfair and unsustainable'
Current rules allow spouses to claim a "married person's allowance" based on their husband or wife's history of National Insurance contributions.
While increasingly rare in Britain, the practice has become a popular option for people who live overseas and who are married to British citizens.While increasingly rare in Britain, the practice has become a popular option for people who live overseas and who are married to British citizens.
Mr Webb said that sometimes these allowances are claimed by people who never set foot in this country, and that this was unfair and unsustainable. The number of overseas residents receiving such payments has risen to 220,000 from 190,000 a decade ago.
Mr Webb said sometimes these allowances are claimed by people who never set foot in this country, and that this was unfair and unsustainable.
He told the Daily Telegraph: "Most people would think, you pay National Insurance, you get a pension. But folk who have never been here but happen to be married to someone who has are getting pensions.He told the Daily Telegraph: "Most people would think, you pay National Insurance, you get a pension. But folk who have never been here but happen to be married to someone who has are getting pensions.
"Say you are an American man and you marry a British woman, you can claim, if she has a full record of contributions, a pension of £3,500 a year for your entire retirement having never paid a penny in National Insurance."Say you are an American man and you marry a British woman, you can claim, if she has a full record of contributions, a pension of £3,500 a year for your entire retirement having never paid a penny in National Insurance.
"Most people would think that is not what National Insurance is for.""Most people would think that is not what National Insurance is for."
Once the pensions bill becomes law, any new claims from 2016 would be prevented.Once the pensions bill becomes law, any new claims from 2016 would be prevented.
But British pensioners and their families who currently live overseas and make such claims would not be affected.But British pensioners and their families who currently live overseas and make such claims would not be affected.
The government's overhaul of the state pension system will see a single-tier pension - of £144 a week at today's prices - being paid to every qualifying new pensioner from April 2016 at the earliest.The government's overhaul of the state pension system will see a single-tier pension - of £144 a week at today's prices - being paid to every qualifying new pensioner from April 2016 at the earliest.
While many people will gain as a result of the changes, some who currently pay in to a second state pension - which is being abolished - will lose out.While many people will gain as a result of the changes, some who currently pay in to a second state pension - which is being abolished - will lose out.