Early retirement in Germany based on EU contribution history

[murphaph]

Hi all,
According to the current rules, it appears it is possible to take your German pension early (usually forfeiting a percentage for each month early the pension is taken) as long as you have worked at least 35 years (or made voluntary contributions covering missing work years). If one starts their working life in another EU country, are these years counted towards the 35? What about voluntary contributions in another EU country? Do they count towards the 35 years?

[GaryC]

Yes. That is exactly what I did - 8 years in Germany and the rest in the UK, then pension at 63, reduced by 0.3% for each month it was taken before normal pension age. All part of how the EU rules on the coordination of social security systems work.

[murphaph]

Cheers Gary, nice one. Did you pay voluntary NI in the UK at any stage?

[GaryC]

Voluntary NI are just treated as Beiträge, albeit Freiwillige,not Pflicht.

I paid some recently and am waiting for a recalculation of my pension (not expecting anything to change as the aggregation/pro-rata calculation, or zwischenstaatliche Berechnung, didn't increase my pension amount, just gave me Wartezeit). My wife also paid voluntary NI and her pension was recalculated, adding a massive 30 Cents per month as she gained a fraction of an Entgeltpunkt through the zwischenstaatliche Berechnung given her work/non-work history in both countries.

[Franklan]

[..] Beiträge, [..] Freiwillige [..] Pflicht.

zwischenstaatliche Berechnung, [..] just gave me Wartezeit [..] My wife [..] a fraction [..] Entgeltpunkt [..] zwischenstaatliche Berechnung

[GaryC]

I have been fluent in Denglish for many years now.

[murphaph]

Yes. That is exactly what I did - 8 years in Germany and the rest in the UK, then pension at 63, reduced by 0.3% for each month it was taken before normal pension age. All part of how the EU rules on the coordination of social security systems work.

So I'm assuming you only got your German (reduced) pension at 63 and had to wait (or are still waiting) until you reach(ed) UK retirement age to start receiving your UK state pension?

[GaryC]

Exactly so. Waiting for my letter to claim UK pension and will be calling DWP if it not here in another week or so.

[Kerfuffle]

Exactly so. Waiting for my letter to claim UK pension and will be calling DWP if it not here in another week or so.

Does that mean you can apply directly with DWP? I think I read somewehere that you need to apply via DRV in Germany who will then liaise with DWP. I really would prefer to my UK state pension paid in GBP into a UK bank account; MIL lives in France and her UK pesion is paid into a French bank account, apparently she is losing quite a bit of money that way.

[GaryC]

I live in the UK, hence applying for my pensions via DWP. If you are in Germany then you would apply via DRV. All that happens when you apply via your local pension authority is that they pull your contribution records together, from all relevant countries, and send that aggregated record to each country. Each country then finalises your pension directly with you. You can have your UK pension paid into any account, whether in the UK on £, or in Germany in €.

AS I understand it, the exchange rate you get when DWP pays you in a different currency is actually very good.

[Kerfuffle]

I live in the UK, hence applying for my pensions via DWP. If you are in Germany then you would apply via DRV. All that happens when you apply via your local pension authority is that they pull your contribution records together, from all relevant countries, and send that aggregated record to each country. Each country then finalises your pension directly with you. You can have your UK pension paid into any account, whether in the UK on £, or in Germany in €.

AS I understand it, the exchange rate you get when DWP pays you in a different currency is actually very good.

Thanks Gary, that it is useful to know. I am still a few years off pension age, so it is good to know what to do when the time comes.

[GaryC]

Have you looked into paying UK voluntary NI? Increase your UK pension, get a D tax deduction for the cost and have a potentially positive impact on your DRV pension.

[alma.freya]

get a D tax deduction for the cost

Oh I wasn't aware of this. I made some Class 2 contributions this year. I can deduct those on my tax return?

Would this be the correct place on a tax return to include it?

Capture.JPG (41.85 KiB) Viewed 7519 times

[GaryC]

I'll let PandaMunich confirm where, as I do not have the "pleasure" of doing returns in D and have not seen the online tax return programmes...

Edit: I think this answers your question viewtopic.php?p=4188&hilit=vorsorgeaufwand#p4188

[Kerfuffle]

Have you looked into paying UK voluntary NI? Increase your UK pension, get a D tax deduction for the cost and have a potentially positive impact on your DRV pension.

According to DWP I am fully paid up, I had some correspondence with them after they stopped taking money from the direct debit set up for voluntary class 2 contributions. I am holding on to the letter they sent as I was contracted out of SERPS for a few yars and would like to make sure I am entitled to the full state pension when I hit 67. My bigger concern is a pension with Standard Life wihcih started out as a groupn personal pension and then I made voluntary payments as and when my financial circumstances allowed. I was hoping to draw down for bigger expenses in retirmement but leaned since that drawdawn is no longer an option for non residents since Brexit.

[GaryC]

Happy to double-check your state pension position is you like, just to give you peace of mind.

[PandaMunich]

get a D tax deduction for the cost

Oh I wasn't aware of this. I made some Class 2 contributions this year. I can deduct those on my tax return?

Would this be the correct place on a tax return to include it?

Capture.JPG

Yes.
Remember to send the Finanzamt proof of your NI contributions and then to check your Bescheid whether they have really been included.

[alma.freya]

get a D tax deduction for the cost

Oh I wasn't aware of this. I made some Class 2 contributions this year. I can deduct those on my tax return?

Would this be the correct place on a tax return to include it?

Capture.JPG

Yes.
Remember to send the Finanzamt proof of your NI contributions and then to check your Bescheid whether they have really been included.

Thank you. Would transaction receipts downloaded from my bank be sufficient?

[Kerfuffle]

edited

[Kerfuffle]

Happy to double-check your state pension position is you like, just to give you peace of mind.

Thanks Gary, I have sent you a PM.