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-   -   Double Pension question (https://www.englishforum.ch/finance-banking-taxation/303488-double-pension-question.html)

fz750 05.04.2021 10:44

Double Pension question
 
Hi all,

I'm 57 and have lived here for 32 years, even shocking to write that somehow, doesn't time fly..:eek:

So, one starts (finally..) thinking about retirement - far too late of course, but there you go - better late than never... Of course I have my Swiss 1st and 2nd pillar pension to look forward to (split through divorce in 2012). My 1st pillar is about 3 years short of being 100%, which means a shortfall of about 300.- a month from the full amount.

Because of this, I started looking at my UK state pension, where it seems I have 12 qualifying years. Strangely, I can buy (class3, possibly cheaper class 2..) up to 24 years of voluntary contributions, back to 2006 and up until I retire here (and 2 years later, at 67, in the UK).

The increased pension"return" I would get on buying these 24 years is massively more than investing that same amount of money into my 2nd pillar pension (I have asked.. 10K investment this year would increase my 2nd pillar pension by 600.- a year :msncrazy:) , ridiculously so actually, so I'm wondering where the catch is...?!

Can I really receive my Swiss pensions here (state and private 2nd pillar) in addition to a UK state pension?

A friend mentioned reciprocal agreements between the UK and CH, and i'm wondering if there is a "catch" here, that one cannot receive both, only one state pension in one place?

Does anybody have any experience/knowledge about this?

Thanks

Belgianmum 05.04.2021 10:49

Re: Double Pension question
 
If you’ve paid into the system for the minimum number of years required you can claim the pension.
My husband has state pensions from Switzerland, UK, Belgium, France and Germany.

ipoddle 05.04.2021 11:04

Re: Double Pension question
 
Quote:

Originally Posted by fz750 (Post 3292767)
Hi all,

I'm 57 and have lived here for 32 years, even shocking to write that somehow, doesn't time fly..:eek:

So, one starts (finally..) thinking about retirement - far too late of course, but there you go - better late than never... Of course I have my Swiss 1st and 2nd pillar pension to look forward to (split through divorce in 2012). My 1st pillar is about 3 years short of being 100%, which means a shortfall of about 300.- a month from the full amount.

Because of this, I started looking at my UK state pension, where it seems I have 12 qualifying years. Strangely, I can buy (class3, possibly cheaper class 2..) up to 24 years of voluntary contributions, back to 2006 and up until I retire here (and 2 years later, at 67, in the UK).

The increased pension"return" I would get on buying these 24 years is massively more than investing that same amount of money into my 2nd pillar pension (I have asked.. 10K investment this year would increase my 2nd pillar pension by 600.- a year :msncrazy:) , ridiculously so actually, so I'm wondering where the catch is...?!

Can I really receive my Swiss pensions here (state and private 2nd pillar) in addition to a UK state pension?

A friend mentioned reciprocal agreements between the UK and CH, and i'm wondering if there is a "catch" here, that one cannot receive both, only one state pension in one place?

Does anybody have any experience/knowledge about this?

Thanks

I'm in a vaguely similar position. Could you provide links to the UK sites please. Also can you quantify what you mean by getting 'massively' better returns if you 'invest' in a UK pension ? And..does anybody know.. can one write off any payments into a 'foreign' state pension against taxable income ?

Thanks

fz750 05.04.2021 11:27

Re: Double Pension question
 
Quote:

Originally Posted by ipoddle (Post 3292774)
I'm in a vaguely similar position. Could you provide links to the UK sites please. Also can you quantify what you mean by getting 'massively' better returns if you 'invest' in a UK pension ? And..does anybody know.. can one write off any payments into a 'foreign' state pension against taxable income ?

Thanks

It's just the pension position provided using your UK national insurance number when you have an account on the uk.gov website. If you don't have a UK national insurance number and pension record, forget it.

As for benefit, it would cost (theoretically, paying class 3 contributions) 19K GBP (approx 24K Sfr) in total for these 24 years at Class 3 rate which, in my case, would boost pension from £60 to £175 a week. (an increase in £6000 yearly, or just under 8K Sfr currently)

If I paid that same money (24K Sfr) into my 2nd pillar pension here it would result in approx 1500 a year increase. so, a no brainer really, from what I can see..

And no, you cannot offset such payments to a foreign pension fund against your Swiss tax unfortunately.

Jim2007 05.04.2021 11:42

Re: Double Pension question
 
Quote:

Originally Posted by fz750 (Post 3292767)
A friend mentioned reciprocal agreements between the UK and CH, and i'm wondering if there is a "catch" here, that one cannot receive both, only one state pension in one place?



The main objective of the reciprocal agreement is to ensure you get the maximum benefit out of all your pension contributions in both states. But I think it only really has impact in situations where one does not qualify for a pension in either state.


It certainly does not prevent you from receiving a pension from both states.

fatmanfilms 05.04.2021 11:48

Re: Double Pension question
 
Quote:

Originally Posted by fz750 (Post 3292780)
It's just the pension position provided using your UK national insurance number when you have an account on the uk.gov website. If you don't have a UK national insurance number and pension record, forget it.

As for benefit, it would cost (theoretically, paying class 3 contributions) 19K GBP (approx 24K Sfr) in total for these 24 years at Class 3 rate which, in my case, would boost pension from £60 to £175 a week. (an increase in £6000 yearly, or just under 8K Sfr currently)

If I paid that same money (24K Sfr) into my 2nd pillar pension here it would result in approx 1500 a year increase. so, a no brainer really, from what I can see..

And no, you cannot offset such payments to a foreign pension fund against your Swiss tax unfortunately.

Definitely worth doing, are you sure you can go back that many years, if you can it's a no brainer. Going forward you have 10? years before UK retirement age.

AbFab 05.04.2021 12:37

Re: Double Pension question
 
My UK state pension has been converted to CHF and paid into my Swiss bank account monthly for the last 7 years without problem.

For Swiss taxes I simply add the amounts up and put the total on the Swiss tax form, which has never been questioned.

Every couple of year the UK pension people write and ask if I'm still alive. My Swiss bank (ZKB) stamps the form free of charge.

If you pay tax in the UK, it may be advantageous to keep the UK pension there and use your UK tax free allowance...

(Added thought) - if you have been self employed here, the UK state pension pay you more. No idea why and I'm not going to ask!

fz750 05.04.2021 12:56

Re: Double Pension question
 
Quote:

Originally Posted by fatmanfilms (Post 3292790)
Definitely worth doing, are you sure you can go back that many years, if you can it's a no brainer. Going forward you have 10? years before UK retirement age.

Yep, and I even have until April 2023 to pay it, no idea why (but that was confirmed by HMRC..)

There might even be the possibility to pay class 2 contributions (£150 a year instead of £780 or so) or a mix (as I was advised by HMRC) for which you have to apply for and which I certainly have.. awaiting the result with baited breath!

My gf couldn't believe these figures, as she'd been quoted 1100 Euros for each MONTH she'd missed from her state pension record in her EU country..

fz750 05.04.2021 13:03

Re: Double Pension question
 
Quote:

Originally Posted by AbFab (Post 3292799)
My UK state pension has been converted to CHF and paid into my Swiss bank account monthly for the last 7 years without problem.

For Swiss taxes I simply add the amounts up and put the total on the Swiss tax form, which has never been questioned.

Every couple of year the UK pension people write and ask if I'm still alive. My Swiss bank (ZKB) stamps the form free of charge.

If you pay tax in the UK, it may be advantageous to keep the UK pension there and use your UK tax free allowance...

If one had a UK address would it not be better to have that pension just paid out in the UK? Seems to me that if the Swiss don't allow my any tax relief on paying the contributions for it, that they will not get any extra "income" from me due to it :D

BTW, some neigbouring countries (Ö..) insist that all their pensioners personally go to their local embassy to prove they are still alive every year plus (I believe) needing evidence of residence from their local community (Wohnsitzbestätigung) so the brits are pretty cool about it..

Medea Fleecestealer 05.04.2021 14:02

Re: Double Pension question
 
Quote:

Originally Posted by fz750 (Post 3292805)
If one had a UK address would it not be better to have that pension just paid out in the UK? Seems to me that if the Swiss don't allow my any tax relief on paying the contributions for it, that they will not get any extra "income" from me due to it :D

BTW, some neigbouring countries (Ö..) insist that all their pensioners personally go to their local embassy to prove they are still alive every year plus (I believe) needing evidence of residence from their local community (Wohnsitzbestätigung) so the brits are pretty cool about it..

It still has to be included as part of your wealth tax. I have my UK pension paid into my UK bank account, but that still has to be added to the Swiss tax return as part of my wealth/assets.

Belgianmum 05.04.2021 15:06

Re: Double Pension question
 
Quote:

Originally Posted by Medea Fleecestealer (Post 3292816)
It still has to be included as part of your wealth tax. I have my UK pension paid into my UK bank account, but that still has to be added to the Swiss tax return as part of my wealth/assets.

Not only as part of your wealth tax, the UK pension ( and any other pensions from abroad) have to be declared as income.

fatmanfilms 05.04.2021 15:10

Re: Double Pension question
 
Quote:

Originally Posted by Belgianmum (Post 3292822)
Not only as part of your wealth tax, the UK pension ( and any other pensions from abroad) have to be declared as income.

Indeed although should be 'subject to taxation' in the UK, unless you choose otherwise, even through this may mean 0 tax payable, a couple of Swiss cantons seem to disrespect this.

catandmouse 05.04.2021 15:22

Re: Double Pension question
 
I currently collect pensions from Switzerland (the lion's share), the UK, France and Germany. The years you have contributed add up to allow you to receive a pension, even though you may not have actually contributed the minimum number of years. For instance, for the UK you are supposed to have contributed for a minimum of 10 years to receive a pension. I only contributed for 6 years whilst I was in the UK, but the other years working elsewhere in the EU, got me over the 10 years hurdle. My UK pension is based on the 6 years I contributed, so it's just about coffee money, but added to my French and German pensions (also small), collectively pay lots of coffees per month.
The Swiss AVS will do the paperwork for you to claim the pensions. You need to supply them with your NI number from each country and the periods you worked in the various countries. Get started with the claims at least 6 months before you reach retirement. The Swiss AVS people I dealt with in Geneva were very helpful and competent.
Of the 3 countries I had to deal with, the UK was the most incompetent. It was a little like working with a black hole, with letters (they don't do e-mail in the UK) not being answered, phone numbers requiring long sequences of press 1 for this, 2 for that and so on, with most options being irrelevant.
Surprisingly the easiest to deal with were the French, with well-secured access to details available online and quick responses to written queries.
The Germans were, well German, with everything being very gründlich, though surprisingly poor security. I was given information several times simply on the basis of my name and my date of birth.

Belgianmum 05.04.2021 15:32

Re: Double Pension question
 
Quote:

Originally Posted by catandmouse (Post 3292826)
I currently collect pensions from Switzerland (the lion's share), the UK, France and Germany. The years you have contributed add up to allow you to receive a pension, even though you may not have actually contributed the minimum number of years. For instance, for the UK you are supposed to have contributed for a minimum of 10 years to receive a pension. I only contributed for 6 years whilst I was in the UK, but the other years working elsewhere in the EU, got me over the 10 years hurdle. My UK pension is based on the 6 years I contributed, so it's just about coffee money, but added to my French and German pensions (also small), collectively pay lots of coffees per month.
The Swiss AVS will do the paperwork for you to claim the pensions. You need to supply them with your NI number from each country and the periods you worked in the various countries. Get started with the claims at least 6 months before you reach retirement. The Swiss AVS people I dealt with in Geneva were very helpful and competent.
Of the 3 countries I had to deal with, the UK was the most incompetent. It was a little like working with a black hole, with letters (they don't do e-mail in the UK) not being answered, phone numbers requiring long sequences of press 1 for this, 2 for that and so on, with most options being irrelevant.
Surprisingly the easiest to deal with were the French, with well-secured access to details available online and quick responses to written queries.
The Germans were, well German, with everything being very gründlich, though surprisingly poor security. I was given information several times simply on the basis of my name and my date of birth.

That wasn’t exactly how it worked for us.
The Swiss AVS place in Geneva collected all the info regarding the different pensions and then passed that info on to the relevant authorities in those countries who then sent the paperwork to us for us to fill in ourselves.
They didn’t do all the paperwork for us.

We found the German one to be the worst and most onerous, the UK, France and Belgium were all very easy to deal with and surprisingly efficient as were the Swiss.

Hemingway 05.04.2021 16:06

Re: Double Pension question
 
Quote:

Originally Posted by AbFab (Post 3292799)

(Added thought) - if you have been self employed here, the UK state pension pay you more. No idea why and I'm not going to ask!

Could you please link some info on this?

Medea Fleecestealer 05.04.2021 16:06

Re: Double Pension question
 
Quote:

Originally Posted by Belgianmum (Post 3292822)
Not only as part of your wealth tax, the UK pension ( and any other pensions from abroad) have to be declared as income.

Then - oops! :D Been collecting it for 3-4 years now and the Swiss haven't said anything yet. And no, I don't file a UK tax return, though I do need to check to find out if I need to. Was told some years ago I didn't, but that was before I started getting the pensions.

Phil_MCR 05.04.2021 16:15

Re: Double Pension question
 
Quote:

Originally Posted by fz750 (Post 3292803)
Yep, and I even have until April 2023 to pay it, no idea why (but that was confirmed by HMRC..)

There might even be the possibility to pay class 2 contributions (£150 a year instead of £780 or so) or a mix (as I was advised by HMRC) for which you have to apply for and which I certainly have.. awaiting the result with baited breath!

My gf couldn't believe these figures, as she'd been quoted 1100 Euros for each MONTH she'd missed from her state pension record in her EU country..

Yup it is a bit of a loophole and one that is worth exploiting while still available. I've seen it possible to pay back 6 years, but haven't seen as much as 12 before!

fz750 05.04.2021 18:02

Re: Double Pension question
 
Quote:

Originally Posted by Belgianmum (Post 3292827)
That wasn’t exactly how it worked for us.
The Swiss AVS place in Geneva collected all the info regarding the different pensions and then passed that info on to the relevant authorities in those countries who then sent the paperwork to us for us to fill in ourselves.
They didn’t do all the paperwork for us.

We found the German one to be the worst and most onerous, the UK, France and Belgium were all very easy to deal with and surprisingly efficient as were the Swiss.

Why would I need to involve the AVS/AHV, can't I just do it myself with the UK Pensions department? Just curious..

fatmanfilms 05.04.2021 18:04

Re: Double Pension question
 
Quote:

Originally Posted by fz750 (Post 3292854)
Why would I need to involve the AVS/AHV, can't I just do it myself with the UK Pensions department? Just curious..

The last country you worked in is supposed to coordinate to make things easier.

Belgianmum 05.04.2021 18:50

Re: Double Pension question
 
Quote:

Originally Posted by fz750 (Post 3292854)
Why would I need to involve the AVS/AHV, can't I just do it myself with the UK Pensions department? Just curious..

You can do it yourself, we had actually already started the ball rolling with the UK before receiving the form to fill out from the Swiss office. They’ll send you the form to fill out anyway so it won’t actually make any difference.
We had several countries involved so it made it much easier for us. Some of them require the initial application to come from the official body of the country of residents in the case of non residents ( of the top of my head Belgium was one of them and maybe also France).


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