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Overseas UK pensions 'blocked for spouses' | Overseas UK pensions 'blocked for spouses' |
(about 3 hours later) | |
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 been to the UK. | |
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. 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. |
'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. |
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. |