British expats are being urged to take advantage of concessionary contributions discounts to improve their future pension.
Unfortunately British pensioners in Australia have their payments frozen at the level of when they retired but UK residents living and working in Australia are being encouraged to take advantage of extended contribution discounts but they have to act before April 6.
Financial advisor Jason O’Connell told AccountantsDaily that UK expats can top up their contribution going back to 2006 if they got in before April 6 which will boost their pension once they pass qualifying age.
“You qualify for Class 2 [discounted contributions] for every year that you are working while you’re abroad. Otherwise, you’re Class 3 which is five times the cost,” he said.
“In simple terms, for every £163 that you pay, you’re buying £275 pounds of lifetime income.
He said expats who qualify for Class 2 should take advantage of it and an extended concession, which finishes in April, that allows top-up contributions back to 2006 instead of the usual six years.”
Should UK pensioners living in Australia have their pensions increased at the same rate as those living in the UK?
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