Manx State Pension

[woolley]

4 hours ago, Andy Onchan said:

I received an answer within 48 hours.

And you're correct Woolley, UK HMRC in particular are dreadful. 

Trust me. DWP are no better, and you find yourself dealing with both over a UK state pension. Among our employees that have retired in recent years, a few that have worked in both places have run the gauntlet of the DWP attempting to purchase Class 2 additional voluntary contributions on my advice, and it really can turn into a war of attrition.

It is worth persevering, of course. As someone said earlier, an individual having entitlement to both IOM and UK can be drawing (commonly) £15/16k pa. A consequence of splitting the former reciprocal pension into separate entities, so where you would have had one pension based on UK and IOM contributions under the old system, you now have discrete pensions in two different countries, the same as if you'd moved to live and work in Ireland, Germany or anywhere else in the world. The joys of the wanderlust!

It is actually possible to have almost complete pensions in both jurisdictions if you moved at the right time and if you use the current dispensation to buy additional voluntary contributions going back to 2006-07 rather than the usual 6 years. The dispensation is available until 5th April 2025 and at current rates. I know someone who has state pensions from IOM, UK and Guernsey.

As a general principle, where you have the choice for a particular year, buy Manx rather than UK contributions because of the higher pension and the supplement. If you fit the employment criteria buy Class 2 rather than Class 3 contributions - a fifth of the cost for the same effect on your pension (40 weeks payback time, rather than 3 years). Contrary to what DWP officers may tell you, it is permissible to buy Class 2 even after you have retired and are in receipt of your pension, provided you would have been entitled to buy Class 2 for the year in question at the time. Argue it in writing if necessary. Many of them at the call centre do not know the rules.

Remember that you cannot pay voluntary contributions in both jurisdictions for the same year, but you can pay voluntary contributions in one if you paid compulsory contributions in the other, thereby gaining credit for that year towards both pensions.

[woolley]

On 11/25/2023 at 6:29 PM, Major Rushen said:

Lots more. Any years you buy back payback is 3 years plus index linked.

And check whether you can buy Class 2. A fifth of the cost for the same deal and payback in 9 months(ish). Best investment you can make (but Class 3 ain't bad either!)

[NoTail]

2 hours ago, woolley said:

Ah. So it's his fault. Did they get a 5 year old to write that text, by the way?

Seriously, I can only imagine that their workload has increased dramatically dealing with "Martin Lewis people" who are panicking for no reason, and perhaps there is no urgency on yours because you are still a reasonably long way from state pension date?

If you are 4 months from spd, which is the first date you can actually apply for your pension it takes 3 to 4 weeks, or thereabouts, to receive a forecast which you can accept or dispute. Errors have been rare in the past from our Pensions team, but they do happen (and they are very, very common from the UK if you are due pension from there too), so it pays to know the system, calculate your own entitlement, and don't take what they say as gospel.

I am 13 months off getting my pension. That is why I asked. Should be straight forward as have worked full time on the  Island since 17 without a break.  Never claimed benefits other than 8 weeks of sickness benefit when I nearly copped it in 2016.

[woolley]

32 minutes ago, NoTail said:

I am 13 months off getting my pension. That is why I asked. Should be straight forward as have worked full time on the  Island since 17 without a break.  Never claimed benefits other than 8 weeks of sickness benefit when I nearly copped it in 2016.

On the face of that, in 13 months you should get at least the new Manx pension of £241.60 per week, including 2024 increase, and a Manx supplement of £38.30 per week, total £279.90 per week. (The £241.60 will rise each year, but the £38.30 will not).

However, because of the 2019 changes, there are a couple of things that can complicate it. They will also calculate your entitlement under the old pre-2019 state pension. The basic is considerably less than the new Manx pension, but the additional pension (equivalent to UK SERPS) was earnings related, so if you have been a substantial earner paying high full NI contributions this could bump you up with a protected entitlement that far exceeds the new Manx pension. Then the same Manx supplement of £38.30 is added. They will pay you the better of the alternatives, old or new system, but you will not get less than £279.90 per week.

UNLESS. You have been contracted out in an employer's pension scheme and have paid lower NI contributions as a result. To take account of you paying less than someone who was not contracted out, and to make the system fair to all (it isn't fair to all, but still), there will be a proportion deducted from your starting amount under both new and old systems covering the years you paid at a lower rate. Obviously, the longer you contracted out, the less you paid into the state scheme, and the bigger the deduction from the state pension.

[Manxman2000]

On 11/28/2023 at 4:18 PM, NoTail said:

I am 13 months off getting my pension. That is why I asked. Should be straight forward as have worked full time on the  Island since 17 without a break.  Never claimed benefits other than 8 weeks of sickness benefit when I nearly copped it in 2016.

I retired in 2017,  one phone call to markwell house and my Manx pension was sorted. The very helpful young lady also gave me the telephone number of the pension service in the uk.  One phone call to them, UK state pension in place.  A few days latter I received notification from my two private pensions to inform me of the payment dates to start receiving my payments.   All it took was two phone calls.   All I have to do now is return a form to the Manx pension to prove I am still alive.   So you should have no problems.  
my UK state pension is reduced quite a bit as I was contracted out for many years but the privates well make up for the loss.  

Edited December 10, 2023 by Manxman2000

[woolley]

On 12/10/2023 at 9:37 AM, Manxman2000 said:

I retired in 2017,  one phone call to markwell house and my Manx pension was sorted. The very helpful young lady also gave me the telephone number of the pension service in the uk.  One phone call to them, UK state pension in place.  A few days latter I received notification from my two private pensions to inform me of the payment dates to start receiving my payments.   All it took was two phone calls.   All I have to do now is return a form to the Manx pension to prove I am still alive.   So you should have no problems.  
my UK state pension is reduced quite a bit as I was contracted out for many years but the privates well make up for the loss.  

Thought occurs to me, did you purchase additional voluntary NI contribution years from 2006 to 2017 in the jurisdiction you were not paying compulsory contributions to at the time? If not, it's worth doing so, especially if you are entitled to pay at the low Class 2 rate. Obviously would have been better at the time to get an extra £60 a week in the 6 years in between, but if you didn't do so then, you still can.