The latest State Pension policy was implemented after April 6, 2016. If a man was born on or after April 6, 1951, or a woman was born on or after April 6, 1953, and the applicant meets the age requirement of 65, they may apply for a UK pension. Starting in 2016, the minimum individual basic State Pension is no less than £148.40 per week. Your NI record will be used to calculate the pension amount you are entitled to in the future.
2) Additional State Pension
The Additional State Pension is based on National Insurance Contributions, allowing for an amount beyond the basic pension. There is no fixed figure for how much one can receive. However, you must meet the following conditions to be eligible for the Additional State Pension:
1. Employees with an annual income exceeding £5,772 (2014-2015);
2. Caring for children under 12 and claiming Child Benefit;
3. Caring for disabled individuals for more than 20 hours per week and having applied for 'Carer's Credit';
4. Receiving relevant sickness or disability benefits.
Note: If your annual income is less than £5,772 (using 2014-2015 as an example), or if you are self-employed or unemployed, you are not eligible for this pension.
3) Professional pension scheme
Employers implement professional pension schemes for their staff. In general sectors, the calculation of this pension is determined by company profits or employee contributions. For companies with professional pension schemes, Additional Voluntary Contributions (AVC) must also be available. This plan (AVC) allows employees to invest more funds for their future pension. In addition, there are many types of personal pension plans, but it is best to consult with an expert for specialized advice.
Furthermore, please remember to contact the government pension department four months before you become eligible for your pension.
From April 2015, pension savers can use their pension like a bank account. Savers can withdraw their entire pension in a lump sum or take small amounts over a period of time. Savers can withdraw 25% of their pension tax-free; this portion can be taken as a lump sum or in installments. Amounts exceeding 25% are subject to tax.
If a pension saver withdraws the entire 25% tax-free allowance at once, the remaining 75% of the pension will be taxed at the saver's personal income tax rate. For example, if you have a pension of £200,000, you can withdraw £50,000 tax-free; if you wish to withdraw the remaining £150,000, you must pay tax at your personal income tax rate, which means it will be calculated at a higher tax rate.
There is a more effective method, which is particularly useful if the saver's other income is taxed at a lower rate or is tax-exempt: the saver can withdraw the pension in smaller amounts, spreading the income over a fiscal year to maintain a lower marginal tax rate.
For example, with a pension pot of £200,000, if the saver withdraws £20,000 per year, the tax payable will be lower. Assuming the pension to be withdrawn that year is £20,000, the tax-free amount is £5,000, and the remaining £15,000 is treated as income. If the saver has no other income besides this £15,000 that year, the highest tax rate the saver would pay on the pension withdrawal is 20%.
In this way, savers can utilize their personal allowance for that year, such as the £10,600 personal allowance for the 2015-2016 fiscal year. However, it is important to note that if the saver has other taxable income, it must not be overlooked. Side jobs, State Pensions, workplace pensions, savings interest, and investments other than ISA personal savings accounts are all counted as income.
According to the updated UK pension policy, Ms. Lucy Lu, Chief Lawyer at Yingde, provides the following notes and suggestions:
Everyone is concerned about pension issues. Pension issues have attracted special interest from immigrants working in the UK. Many factors affect pensions. Regarding whether you will have a pension in your specific situation and how much it will be, it is recommended to seek professional and detailed advice from the Citizens Advice Bureau or The Pension Advisory Service.
