I wonder if you can give me some hints on whether my state pension can be increased, as I worked in two different countries?

Between 1977 and 1997 I lived and worked in Ukraine. The country has now rewritten laws and I am no longer qualified for a pension there as they require 30 years of work.

Since 1998 I have been working in the UK and have 25 years of National Insurance contributions, and therefore qualify for my pension in the UK. In reality I have worked for 42 years already.

Could my work years in Ukraine be accounted for in the UK as my general work time for state pension?

I am 61 and can pay National Insurance for five more years providing I work – although I may wish to retire earlier. So, I will never pay 35 years of NICs to qualify for a full UK state pension.

Tatyana

Tom Selby, AJ Bell Head of Retirement Policy says:

Firstly, given recent events in Ukraine I hope you and any family you have are OK in what are clearly extremely stressful times.

For anyone unfamiliar with the UK state pension, here’s a quick summary of how it works.

Since April 2016 people have built up entitlement to the flat-rate state pension, worth £179.60 per week in 2021/22. You need a 35-year National Insurance Contribution record to receive the full amount, with a deduction made for every missing year. You need at least a 10-year NIC record to qualify for any state pension.

The flat-rate state pension normally rises in line with ‘triple-lock’, meaning it increase by the highest of average earnings, inflation or 2.5%. The earnings element is ditched for the 2022/23 tax year.

Many of those who reached state pension age before 6 April 2016 will have a state pension made up of a basic element and an earnings-related element (usually SERPS or S2P). The basic state pension is worth £137.60 per week in 2021/22 and also rises in line with the triple-lock.

Millions of people will have built up rights under both the old system and the new system. Where this is the case, the DWP calculates a ‘foundation amount’, with the amount you receive being the higher of:

– the amount you would get under the old state pension rules;

– the amount you would get if the new state pension had been in place at the start of your working life.

If you lived or worked in a European Union country or Switzerland then social security contributions in that country should count towards your UK state pension entitlement.

As Ukraine is not in the EU, unfortunately this will not be the case and your UK state pension will be based on your UK National Insurance record only.

However, it is possible to buy NICs to fill gaps in your record and boost the value of your state pension up to the full flat-rate amount. The deadline is 5 April each year, although you are usually only able to fill gaps from the last six years.

You can find more information here.

DO YOU HAVE A QUESTION ON RETIREMENT ISSUES?

Send an email to asktom@sharesmagazine.co.uk with the words ‘Retirement question’ in the subject line. We’ll do our best to respond in a future edition of Shares.

Please note, we only provide information and we do not provide financial advice. If you’re unsure please consult a suitably qualified financial adviser. We cannot comment on individual investment portfolios.

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