AIBU to think claiming two state pensions seems unethical?

[CoffeeAndCats3]

I wrote about this on another thread, but thought I'd start my own as it irks me and I'm wondering if IABU.

My parents emigrated from the UK in their early/mid thirties and have never lived in the UK since. They are now late 60's. My Mum told me recently that both her and my Dad are claiming a full UK pension, in addition to a full pension in the country them emigrated to. They don't need this money, but she seemed quite smug about how they can 'double dip' and live the Life of Riley while sitting on a load of money, rental properties etc. I told her it seemed a bit unethical to me, but she didn't understand my viewpoint at all.

How is this possible? She said that they only had to pay their (national insurance?) for a period of time after moving, to then be eligible for the full UK pension on retirement? Can someone explain to me if this is correct, as I half think they've scammed the UK system somehow!

Not paying £170, it’s not - that’s the now ended class 2 rate that overseas residents can’t access anymore

It does sound like a loop hole which should be closed but tbf the contribution for self employment is about the same. I used to be self employed and I only had to pay about £140 a year national insurance. Pretty sure it was just a flat rate and unrelated to the amount of money I made.

But it’s still more than people who don’t pay anything in at all and either get credits because they claim child benefit or certain other benefits. You could have someone claiming certain benefits for years and never contributing but still qualifies for full state pension due to NI credits. And then you have people that don’t even get NI credits so instead they just get pension credit which gives them the same amount anyway! I don’t really see what the difference is. All of these people are still claiming more than they paid in.

I know someone who was born and lived overseas for the first 40 years of their life. They paid taxes etc and also into company pensions. They married a UK citizen and worked for a number of years in the UK.

They claim a state pension from their native country and the UK. They discovered that due to corporate corruption they do not get any private pension from the companies they worked for in their native country.

Their spouse, a UK citizen who has never worked in the overseas country is entitled to a pension from their spouses native country due to being married to said spouse.

Relax.

Undoubtedly there will be some savings and/or contributions that you currently benefit from that will be withdrawn for others in later years. They'll be pissing and moaning on MN about people of your generation.

Imagine when the UK pension goes means-tested, and I think it will; the howls.

I don't know why you think the now more restrictive rules for topping-up from abroad is a "Boomers" perk.

I do think our benefit system needs a massive overhaul as so many people are taking the piss.

However, in the mean time I have researched into what I am entitled to (zero) and our parent(s). Believe me, I have gone after everything on offer; attendants allowances, help updating their houses to live in.

As far as I am concerned we have paid so much into the system and taken very little out (paid our own schooling and healthcare) and if I can claw back anything for my own family then I will. I am sick of paying for everyone else who have no interest in contributing to society, and now I am only looking after my own.

So, good on your parents.

It is unethical to take public money that you don’t need. I agree with you. My STBXH’S father does this two. It all goes in a bank account that he never touches because he just doesn’t need it. My ex and his siblings will benefit from it but it seems wrong.

That said, I’d rather the government focused on properly taxing wealth rather than this issue. That’s where the real inequality and unethical practice lies.

I gather you don’t like your parents much then op?

Why would you think that?

I may not agree with their financial approach and morality (I think it's grabby), but I actually get on very well with them in general and we have a good laugh together.

If you had already registered interest.

Do these overseas citizens pay inheritance tax to the U.K.?

My great aunt was Italian and lived in the UK for about 30 years when she drew an Italian and UK pension - works in other senses too. This was a few decades ago.

I was self-employed in the UK and paid class 2 (still self-employed) when I moved overseas, quite a number of years ago now. My state pension overseas will be a pittance, which is why I've continued to pay contributions (the triple lock still applies where I live in the EU). HMRC will be contacting those in my situation next month about the move to class 3 - that is the closing of the supposed "loophole". I will absolutely need my UK pension, as I would never have enough on any pension I get in the country I reside.

There's a double taxation treaty that deals with this, but overseas citizens will still pay any due inheritance tax.

It depends on where you're resident for tax purposes and the arrangements between that country and the UK.

I can only speak about Australia

If you pay tax to HMRC on UK- based income from abroad and die, your executor needs to make an IHT claim, and declare assets. If you sell a house, e.g. one you've been renting out, you have to make a CGT declaration and pay any tax due by three months of the sale.

I should have said HMRC get back on the IHT claim to say what tax, if any, is due.

Isn’t it similar to child benefit? My Polish friend claims child benefit from Poland and here.

Healthcare of retired British citizens living in EU countries like France is paid for by Britain, excepting some fairly low co-payments. It's a good deal because most EU countries have superior healthcare to the NHS for which the French, German etc paid higher taxes. So, the British retirees paid lower taxes when working then when they need healthcare in old age living abroad, the British taxpayer, who gets inferior care, pays for them. However, many other countries don't provide free language translators like the NHS does.

I don't know about domiciliary and residential care for the British elderly abroad though am aware that some European countries pay a social care levy for those in employment and even in retirement in a few places, so they pay more in collectively than we do in Britain.

No, you don't have tonwork a single day i your life to be entitled to a full state pension. In OPs parents case 35 years is a meaningless number anyway it only applies to people born after 2000. In addition it is not work that it is based on it is NI credits. You can build up a full entitlement by claiming child benefit or one of the other benefits that gives credits or by paying voluntary contributions.

Yes but a) most people do work and pay in
b) of those people who don’t make contributions, they live here and the majority will contribute to UK society in some way- bearing and raising children, being unpaid carers or even just down to spending their benefits money in the UK economy.

We live abroad and dh pays tax in the UK on his government pension.
Inheritance tax would be paid in the country we live in.
We get British state pension which is taxed in the country we live in.
We dont get a state pension from the country we live in.
As we have an S1 we can use healthcare in both the UK and the country we live in. Our health care is paid for by the UK even if used in other country.

Did you not know there’s a difference between legal and unethical?

Amazon and Starbucks legally avoid tax, is it morally ok?

I'm in the fortunate position of benefitting from this arrangement prior to it being closed off. I pay class 2 contributions every year and when I retire I will receive a full (hopefully if I paid the correct number of years) UK state pension and 3/4 of the state pension of my current country of residence. It does feel a bit cheeky, but I remind myself that I lived in the UK until I was 35 (UK national) and worked from the age of 15 until I emigrated. During that time I never had cause to claim for any benefits (apart from 5 months of child benefit for first born). So no, I'm not sorry.

Then the UK government needs to enact laws to prevent this.

You’ll still have paid in way less over your lifetime than the amount you’ll receive in pension (presuming you don’t die in early years of retirement).

The taxes you paid in your teens and twenties will have been hardly anything (unless you were an unusually very high earner at that age) and will have contributed to the services you benefitted from while you were here such as education and healthcare so don’t try and justify it to yourself.

Yes they do. I was replying to the ridiculous
“if it’s permitted by the rules how can it be unethical?”