More of a discussion topic is how does the HM Revenue and Customs fund the UK State Pension?

Especially when there are taxpayers that no longer have residency or ties to the UK. I don't have a UK passport btw, I just happened to live in the UK on 2 * 5 year work permits before deciding to come home when I got a transfer)

I don't think I deserve being a recipient of this pension, but I'm not complaining!

And on that point, there are probably those lower on the socio-economic ladder that need this money more than the ones fortunate enough to keep employed for 35+ years.

Maybe this is why the UK pound is such a basket case now. I noticed the Aussie Dollar is now fighting back against the pound being back above 50p.

Not good for stocks with business in the UK, Maybe sell Strawman favourite SPZ??? - not wanting to offend the SPZ fans here.

As you say @edgescape, the UK state pension is funded from National Insurance contributions that are deducted automatically from your salary when you are working. I've no idea if this money then goes into some kind of ring fenced fund which is wisely invested to pay out future pension liabilities , but I suspect not.

I worked in the UK for almost 30 years, which qualifies me for the full amount of the Basic State Pension. According to the official UK government site "You’ll need 10 qualifying years on your National Insurance record to get any new State Pension" so it sounds like you just scraped over the line.

It gets to be an administrative pain if HMRC decide to tax you on this pension income, but I'm fortunate to have been in Australia long enough to escape their clutches so I just do the right thing of course and declare this income to the ATO.

@edgescape my wife and I are both eligible for the full UK State Pensions when we turn 67. Through both NI contributions during my career and my wife paying NI as largely self employed, we kept on making voluntary contributions because the ROI of getting the full pension made it a very attractive investment. The return on that investment is not means tested.

UK doesn’t have super like Australia, but part of the NI system is essentially a social contract whereby you make contributions towards your State Pension throughout your career. Because (up to a limit) the more you earn, the more NI you pay, it is essentially a contract between "working people" (as Starmer and Reeves like to call them) and the government.

The State Pension is not like other state benefits, which change at the whim of governments. That’s because each contributor has a record of their contributions and eligibility as to what % of the State Pension they have "earned".

Changing eligibility to the State Pension would be politically very tough for any government. Over the years they have nudged up the age of payout, now at 67. And I see this as the key risk - every year added saves the government billions. But it is already getting to the point when many won’t enjoy many years of retirement.

Will things change further? Quite possibly. The UK is not in great shape, and the Chancellor recently increased Employer NI Contributions so that she could honour her pledge not to increase the tax burden on "working people".

However, the State Pension and its rules to entitlement is a cornerstone of the UK welfare system. No doubt there will be future tinkering, but because many millions of people - including my wife and I - made voluntary contributions throughout our working lives above the mandated statutory minimum, that is an added barrier to implementing means testing or changing the entitlement. It would be political dynamite, like to blow up any government.

But I guess it all depends on how dire and dystopian the UK gets!

@mikebrisy My ex-wife, a Pom who worked in the UK in the early 90's for the grand total of 4 years, was entitled to make "catch up " payments 15 years after we left the UK, for her National Insurance entitlement when she reaches age 67.

I can't remember how much we contributed, but from memory, it was less than 30,000 GBP in total, and the last time we enquired, which was 5 years ago, she'll receive a pension of $16,000 (AUD) pa forever.

The one issue that rankles with those who receive the UK pension living here in Australia, is the pension is not indexed, so it's purchasing value will diminish over time. Still, it's a fantastic deal...while it lasts!

Straw members who lived and worked in the UK might want to contact HM Revenue & Customs to see if you're eligible for a pension or part pension....there used to be and presumably still are, some financial planners here in Oz who specialise in this area if you wanted assistance with the process

@mikebrisy @Rocketrod @lankypom Thanks for sharing the information, it's really helpful

I checked the letter again and it mentions 12 years. Must be the extra hours from doing some overtime.

The shortfall I refer to is also for the final year of working in the UK in case it was not very clear.

Feeling a bit red-faced for ignoring the letter so long....Will do something about this ASAP!