Thank you for all of these. I will surely be referring back to this post in the future.I think legally a company has to offer a Defined Contribution pension to UK employees. And I think they have to match at least the first 3% of salary (not sure)? So anyone in the UK should participate in that.I am in same situation as you and made the move late last year. Your plan sounds good. There are a few other things I had to deal with:
- Private Pension - I am investing in my company plan since my contributions are matched.
- ISAs - Not bothering since they don't make much sense for US citizens (based on my reading of this forum).
- Remittance or Arising Basis for UK taxes: I am going to do the math and figure out which works best
Some other personal finance things:
- Switch to HMRC reporting funds within Vanguard: We switched from VTSAX to VTI as the latter is HMRC reporting. This will matter if we end up staying here longer than expected and end up selling some units.
- We tried HSBC and Monzo for banking. Monzo is much better and we recently closed our HSBC account
- To send money back to the US, Revolut or Wise are good options
- Get a Amex credit card here in the UK so you can spend your pounds
If they use "Salary Surrender" then your contribution comes off your gross income *and* your National Insurance (13.8% of contribution) goes in as well. So if you are in the 40% tax bracket, what costs you 40p of takehome pay goes into the pension at £1.138 of contribution. You can't touch that until you are 55 (soon to be 57) and you will pay tax on withdrawal, but that's a more than 100% return on Day 1 - Other People's Money. With Salary Surrender, if you can make the US tax work, it can be a very attractive way of saving.
I doubt you would have a DB scheme unless you work in the UK government, police, health care etc. Suffice it to say, if you can join one, then join it -- pensions are by law inflation indexed up to a certain level, and are required to have a spousal survivor benefit. You may never have been a union member, but in the UK union membership usually provides you with help for legal representation if you are in dispute with your employer, or made redundant. I highly recommend it if your employer has a recognised union.
There is an equalization treaty with the US regarding Social Security. In essence I think your National Insurance contributions (our payroll tax) can count towards your US SS years? This is really important - our Basic State Pension is very small compared to SS benefits. (I am not US-ian so I don't really know, just what I skim read here). Basically once you get a National Insurance Number (you have to have that) then you keep hold of that, and you can always look up your state pension rights online. If you are going to be in receipt of any benefit, then they do need to know where you live, so don't forget to update that.
(My aunt, who never lived in England, receives a widow's State pension - she is in her 1990s. Every so often we have to get an attorney sign the paperwork that she's still alive, send it off to Newcastle, and the pension duly keeps arriving every month).
(That and your NHS number. The 2 numbers on which your entire life will hang. To be fair, I don't think they asked for mine when I was out cold in Accident & Emergency).
Unfortunately the NHS is in a total meltdown at the moment due to underfunding and aftershocks of Covid crisis. People who would never have considered going private are doing so. If your employer offers supplemental private health insurance (eg through BUPA - largest provider) then I would take it.* Private dental insurance is rarer. And in London, at least, it's practically impossible for an adult to get NHS (ie public) dentistry. So also something to think about.
Revolut and Wise are great to move money. *However* as I understand the position they are not covered by the FSCS? (ie FDIC equivalent up to £85k per person *per institution* not per account). Don't keep large balances with them. I don't know about Monzo (also a "challenger" banking brand).
(Revolut had its banking licence through one of the Baltic states. So your backstop was a country on the fringe of the Russian Empire, with a population of 2 millions. I don't know if that situation has changed).
* to be clear, if you have an accident or an emergency, you will wind up in the Casualty department of the local hospital. You can wait *hours* for an ambulance right now, so if you can go privately to A&E you should do so (but you will be seen faster if you come in an ambulance). Private really only works for elective procedures. When a friend's wife had a difficult labour, they moved her straight from the private hospital to the local hospital, a few blocks away -- the head of gyn-ob, a professor at the associated medical school, strode into the ward, grabbed her hand and said "Madame, we are going to deliver this baby". We are born in the NHS, and we die there.**
** EDIT: I know a bit too much about palliative care and the NHS these days. Another time.
Statistics: Posted by Xyz214 — Fri Jun 21, 2024 8:00 pm