The Government will announce tomorrow (May 8th) that as of 2016 some 220,000 people living abroad will no longer receive married person’s allowance based solely on their spouse’s work history.
The measure will be part of an overhaul of the state pension, to be included in the Queen’s Speech tomorrow, however, as the current pension system is being replaced anyway, the move is likely to have a limited impact, despite the number of such people having risen from 190,000 ten years ago.
Currently, anyone married to a British citizen and living abroad can claim the married person’s allowance of £66 a week, even if they have not paid their own National Insurance contributions.
However, the spouses of British citizens living abroad who retire after 2016 will no longer be eligible for the pension, which has angered some current workers living abroad who pay their full contributions. Existing pensioners will be unaffected.
Also confirmed in the Queen’s Speech will be the move by the Department of Work and Pensions to introduce a single-tier weekly pension set at £144, starting from 2016, which will replace the current basic pension of £107 plus various means-tested top-ups.
The measure will affect people who reach State Pension age from the time it is introduced. Current pensioners and those reaching State Pension age prior to introduction of the single-tier pension will not be affected and will continue to receive their State Pension in line with existing rules.
The reforms will provide a foundation to support automatic enrolment launched in October last year, which will see six to nine million people saving more, or saving for the first time, into an occupational pension.