The UK government announced this week that the spouses of UK pensioners living abroad will no longer be entitled to a British state pension on the back of their spouse’s work history.
The Pensions Bill, which was announced as part of the Queen’s speech this Wednesday, aims to put a stop to pension payments to spouses of UK citizens who live overseas and receive benefits on the basis of their spouse’s previous national insurance contributions. It is estimated that approximately 220,000 people currently draw money inappropriately and that introducing the measures will allow the UK government to make a saving of around £410m a year.
Current rules allow spouses who have not paid their own National Insurance contributions to claim a married person’s allowance of up to £66 per week based on the NI contributions that were made by their husband or wife. However, pensions Minister Steve Webb revealed that many of the expats who currently receive a married person’s allowance have never even set foot in the UK.
Other measures that were announced include a flat-rate state pension that is based on the total of the individual contributions that an individual made in the UK during their working life.
Although the measures will not impact pensions and their spouses who are currently living overseas, once the Pensions Bill is passed it will prevent any new claims. It is anticipated that the changes will be formally introduced in 2016.
