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German pension taken early then move to UK

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I have used the search function but cannot find an answer.

If I claim my German pension at 63 then move back to the UK what happens to the pension?

Do I get a German and Uk pension?

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Will you reach the German pensionable age at 63? As far as I understand, the Withdrawal Agreement protects your existing pension rights and your pension will be paid into the bank of your chosing.

You will get a UK pension at your UK pensionable age if you have paid into the UK system.

 

From Gov UK Living in Europe:

The Withdrawal Agreement

If you were legally resident in an EU country before 1 January 2021, your rights will be protected by the Withdrawal Agreement.

You will continue to have broadly the same rights to work, study and access public services and benefits as before the UK left the EU.

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If you move abroad, you must first check the tax implications. It's usually more beneficial to remain in Germany tax wise, is my understanding. Key-word: tax-exempt allowance.

 

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12 hours ago, Heidelbumm said:

I have used the search function but cannot find an answer.

If I claim my German pension at 63 then move back to the UK what happens to the pension?

Do I get a German and Uk pension?

 

Will you have 10 or more years of paying into the German pension if you leave Germany at age 63? If yes then you will receive payments in relation to your contributions from Germany, normally at age 67 (earlier if you choose to take a reduced amount) and a UK state pension also at age 67  in relation to the number of years you contributed in the UK. If no then the years you contributed to the German pension will be credited to your UK pension and you will not receive payments from Germany.

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There is some information at https://europa.eu/youreurope/citizens/work/retire-abroad/state-pensions-abroad/index_en.htm  but as others have said it will depend on the contributions you have made.

 

Tax is a good thing to mention as well as I don't think the German pension is fully taxed at the moment and it will only be from 2040 that you are liable to pay tax on 100% of the pension but best to check on this. It's probably recommended to have a meeting/call with the Deutsche Rentenverischerung before deciding so you know exactly what you will be getting, how much tax you will pay, whether you will be entitled to pension increases now the UK is no longer part of the EU, etc.

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28 minutes ago, warsteiner70 said:

Tax is a good thing to mention as well as I don't think the German pension is fully taxed at the moment and it will only be from 2040 that you are liable to pay tax on 100% of the pension but best to check on this. It's probably recommended to have a meeting/call with the Deutsche Rentenverischerung before deciding so you know exactly what you will be getting, how much tax you will pay, whether you will be entitled to pension increases now the UK is no longer part of the EU, etc.

 

Its not just that by 2040 one is liable to pay tax on 100% of the pension BUT that if you are living in the UK the German FA will apply tax from the first Euro (beschränkt steuerpflichtig) i.e. you will not have the tax-free allowance that you would get if resident here.  On the other hand you would not be paying for Health Insurance (at least not appear to be).

 

The other way around HMRC is not so mean...

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On 2/4/2021, 10:32:54, keith2011 said:

 

Will you have 10 or more years of paying into the German pension if you leave Germany at age 63? If yes then you will receive payments in relation to your contributions from Germany, normally at age 67 (earlier if you choose to take a reduced amount) and a UK state pension also at age 67  in relation to the number of years you contributed in the UK. If no then the years you contributed to the German pension will be credited to your UK pension and you will not receive payments from Germany.

Does time at the Arbeitsamt count? If not then the years  I contributed to The German pension should be credited to UK pension, as far as I can see.

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1 hour ago, Heidelbumm said:

Does time at the Arbeitsamt count? If not then the years  I contributed to The German pension should be credited to UK pension, as far as I can see.

Do you mean working at the Arbeitsamt, or time waiting to be seen?!

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On 4. Februar 2021 um 12:15:46, HEM said:

Its not just that by 2040 one is liable to pay tax on 100% of the pension BUT that if you are living in the UK the German FA will apply tax from the first Euro (beschränkt steuerpflichtig) i.e. you will not have the tax-free allowance that you would get if resident here.

It's €9744 for 2021. Double if you're married. Immerhin.

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If I understood correctly, what a total baloney the boomer generation has handed to us (via their politicians). Not only do we have to retire later to get full benefits (67), we also will have 100% of our pensions recognized as taxable income while they only had 50% recognized as taxable since back in 2005.  Ok, now in 2021 they have 81%... but still what a bunch of thieves. Throw in the money printing we are doing to prop up this sham of an economy (even before corona) and you can bet your pension will be worthless. Inflation is another form of tax and theft that is much harder to escape.

 

I will be sure to put my money in other things that maintain their value and not euros/dollars... 

 

 

 

 

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14 hours ago, RedMidge said:

Do you mean working at the Arbeitsamt, or time waiting to be seen?!

being Arbeitslos

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When you move back to UK, what happens to your German Tax no, and any details they have? Do they keep everything?

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On 03/02/2021, 22:50:07, Heidelbumm said:

I have used the search function but cannot find an answer.

If I claim my German pension at 63 then move back to the UK what happens to the pension?

Do I get a German and Uk pension?

 

The devil is in the details. 

 

You should first complete a Kontoklärung to determine how many months of contributions you have made and whether or not your pension has vested. 

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You should first complete a Kontoklärung to determine how many months of contributions you have made and whether or not your pension has vested. 

 

What is vested?

 
Y
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There seems to be a lot of confusion and a fair amount of incorrect information/assumptions in this thread.  We have been through the process of claiming from the UK at 63, and will soon be doing "round two" for me...

 

To get a German State Pension you must have the minimum "Wartezeit", i.e. 5 years, or 60 months to be precise, of qualifying periods in any country that applies the EU rules, including the UK if you are covered by the WA (in the system at 31 December 2020, whether still living in Germany or not), or by the 24 December "Trade Agreement" if you are not within the WA because you moved to Germany after 31 December 2020 - my understanding is, broadly, that the same rules continue to apply for at least the next 15 years when they could be renegotiated but probably not relevant here. 

 

I am not an expert on health insurance but as far as I am aware the rules on social security coordination that cover all this stuff on pension and healthcare place the responsibility on healthcare on the country in which you are resident.  So, if you move permanently to the UK, my understanding would be that you come within the NHS rules.  Persons no longer working do not pay NIC, so you would presumably just slot into the NHS as it were and no further payment to Germany but you should take advice on that...

 

Requiring a DRV Kontonklärung would be sensible first step.  When doing so, you could ask them to include UK data too.  They might complain and it will take longer but you should then see how the UK data will affect your position (positively).  In my view, the concept of "vesting" isn't pertinent to state pensions as they are based simply on age and qualifying years' of contributions.

 

If you have 5 years' Wartezeit from all countries you can claim your pension at 66+ and can find actual dates on the DRV website.  Employment, unemployment, raising kids (in Germany), school, uni and a whole host of other things count towards your "Wartezeit", though they may not increase the amount of pension itself. The Kontonklärung will describe each period and the pension projection will go into all sorts of detail around how the numbers are calculated - all in Amts-Deutsch but hey ho, it is fun to read!

 

If you have at least 35 qualifying years at the age of 63 you can claim your pension from that age, albeit reduced by 0.3% for each month that falls before normal pension age, i.e. 3.6% per year.  for me, claiming mine from 2022, that will be 11.4% but again, details are on the DRV website.  Broadly, the same activities feed into this pension as feed into the normal pension, including time in other countries (EU/UK)

 

There is a 3rd option for those with 45 years Wartezeit but the types of activities that qualify are much reduced.  Read up on that one if it may be relevant.

 

If you qualify for the 5 or 35 year versions based only on your Germany contributions then they will produce an innerstaatliche Berechnung using only German data (which can include education and so on in other countries but not working and paying contributions abroad) and a zwischenstaatliche Berechnung using data from all countries.  You get the higher amount from these two calculations. 

 

If you can only get to 5 or 35 years using data from all countries in which you have lived and worked, then they dispense with the innerstaatliche calculation.  This was the position we were in: lived in Germany for a decade and then back in the UK.  Total years in excess of 35, so claimed the 35-year pension at 63 from the UK and got only the zwischenstaatliche Berchnung.

 

German pensions are taxable but not to 100%.  There is a Freibetrag calculated as a percentage of your gross pension based on the year in which you first receive it.  So, for 2022 it will be 18%, leaving 82% taxable.  By 2040 this will be 100% taxable.  This % is applied to the first, part year, and then a fixed amount is calculated by reference to the gross amount received in the first full year and used for all future years.  this means the annual inflation rise is taxed in full!  So, if you started in December 2022 you would pay tax on 82% of what you receive in 2022.  Your tax free element would then be 18% of the total gross amount from 2023 and this would remain the same amount of € for the duration of the pension.

 

When you move to the UK your pension will continue to be paid and will continue to be updated by inflation each year as long as you are covered by the WA.  It will be taxed ONLY in Germany and your FA will become Neubrandenburg (RIA) as they deal with all Rentner im Ausland.  Depending on your levels of UK income, you may be able to claim to be taxed on the unlimited liability basis, giving access to the Grundfreibetag, otherwise you will be taxed on a limited liability basis without access to the Grundfrebetrag.  

 

If you work in the UK before you reach German state pension age then you are within the Hinzuverdienst rules. Ignoring the current increase because of COVID, that means you can only earn up to 6,300€ per German tax year without having some of your pension docked.  After state pension age there is no limit on what you can earn.

 

At UK state pension age you can then claim the UK state pension in addition to what you are already getting from Germany (age 63 or state pension age).  If you have less than 10 full qualifying UK years (based on the UK tax year), then your German data will get you past that post.  You will then get the UK state pension based on your UK NIC record (too complicated to set out here but on your State Pension Forecast on GOV.UK) which is taxable ONLY in the UK and against which you can set your personal allowance.  Depending on your level of UK income you may be required to submit a Self Assessment tax return in the UK but that probably won't be required if you have only the state pension and some taxable bank interest as you can receive a combination of those up to about £18,000 before any tax will be payable (Personal Allowance, Personal Savings Allowance and the Starting Rate of Income Tax at 0% on up to £5,000 for those with interest income but no other employment or pension income - details on Gov.uk)

 

Hope this helps.

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1 hour ago, GaryC said:

There seems to be a lot of confusion and a fair amount of incorrect information/assumptions in this thread. 

 

Unfortunately that has become standard for this forum and I've long since given up trying to correct anyone. I don't have the words to describe how great it is to read such a well explained, differentiated post from someone who understands how the various parts of the puzzle fit together. :)

 

1 hour ago, GaryC said:

In my view, the concept of "vesting" isn't pertinent to state pensions as they are based simply on age and qualifying years' of contributions.

 

I used vest as the translation for Wartezeit erfüllen due to the minimum number of contributions required to receive a pension (it is a common question from foreigners whether or not they can have their contributions refunded). 

 

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I think "Qualifying years" for "Wartezeit" is perhaps easier for the layperson but who knows...

 

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On 2/4/2021, 12:15:46, HEM said:

The other way around HMRC is not so mean...

HMRC is mean.

 

As I posted many times before: if you have UK income but reside outside the UK, they grant you a personal allowance only if you are a citizen of a small list of countries. And this was before Brexit. 

Taxing people depending on their nationalities. Mean. I hate them.

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32 minutes ago, Gambatte said:

HMRC is mean.

 

As I posted many times before: if you have UK income but reside outside the UK, they grant you a personal allowance only if you are a citizen of a small list of countries. And this was before Brexit. 

Taxing people depending on their nationalities. Mean. I hate them.

I you live outside Germany and have German income then you do not qualify for the Grundfreibetrag - what's the difference.  Tax allowances can be targeted however and at whomever a government choses.  Don't blame HMRC or the FA - they only implement the laws passed by parliament.  Lobby your MP if you want change.

 

By the way, you have to claim the personal allowance and nothing changes as a result of Brexit!

 

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36 minutes ago, GaryC said:

I you live outside Germany and have German income then you do not qualify for the Grundfreibetrag - what's the difference.  Tax allowances can be targeted however and at whomever a government choses.  Don't blame HMRC or the FA - they only implement the laws passed by parliament.  Lobby your MP if you want change.

Correct me if I'm wrong but Germany, like probably most countries, does not tax you according to your citizenship. The UK does.

If you reside outside Germany and have German income, they remove your Grundfreibetrag regardless of your nationality. 

If you reside outside the UK and have UK income, if your nationality is from country A, B, or C they still give you a national allowance, otherwise not.:angry:

I don't have an MP to lobby!

 

 

36 minutes ago, GaryC said:

By the way, you have to claim the personal allowance and nothing changes as a result of Brexit!

Some people with UK income are not entitled to personal allowance!:angry:

 

 

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