On Your Side: When leaving, make allowance for no allowances

Questions about calculating end-of-service fees, making the job transition with your bank and retiring as an expatriate, answered by The National's consumer advocate.

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What would be the gratuity payment for an employee who has completed four years and 11 months of service and has a basic salary of Dh2,000 per month? They also have allowances - housing, transport, air ticket - that total Dh7,000. SB Dubai

If the employee has completed less than five years' service, including their notice period, then they are entitled to 21 days of pay per year of service. This, however, is based on their final basic salary and the allowances mentioned are not taken into consideration for the purposes of this calculation. In this instance, the employee is entitled to a payment based on 103.25 days of their current basic salary.

Personal Finance On Your Side

The National's consumer advocate, Keren Bobker, answers your questions on legal and financial matters in the UAE and beyond.

I recently left my job and have a new one that I will be starting in a few days in Dubai. My current visa is being cancelled and should be finalised in a week or so. My new employer will apply for a visa because the company is not in a free zone, like my last company. I have a credit card and a car loan with my bank, although the amounts owing are not very high. I hope to have my new residency visa within the next few weeks. My current employer has told me that they have not informed my bank that I have left. My new employer will be paying my first salary in a couple of weeks and I have enough money to tide me over in between. Should I inform my bank that I am changing jobs? If so, should this be now, or once I have my new visa? JC Dubai

If you have received your final salary payment, your bank may already be aware that you are leaving your current job. It is standard practice for employers to mark this as "final salary", which should include the end-of-service gratuity. When a final salary comes in, this usually means that a bank will freeze your current account. But in most cases, it can be quickly unfrozen once you demonstrate that you have a new job, usually by providing a copy of the offer letter. You need to check the terms of your loan agreement because it may say that you have to inform the bank of a change in circumstances. If not, provided you have regular salary payments made to the bank where you have the loan and credit card, and no payments are missed, there should not be an issue. Some banks, however, require confirmation of your employment and residency, so you may want to provide copies of your new contract and residency visa to the bank to prevent any future issues. To avoid any problems, if your bank is not yet aware of your plans, it may be sensible to make a cash withdrawal to tide you over in case your current account is frozen for a few days.

My husband and I are British citizens and are in our early sixties. Because we own both a business and a property in Ras Al Khaimah, we intend to remain here for the rest of our lives and believe that we will be able to do this under current visa rules. My questions are about UK state pensions. Although we left the UK nearly 14 years ago, before we left we were both employed in the UK and paid National Insurance contributions as part of our salary deductions. While we haven't thought about this matter for years, we believe we are entitled to receive a UK pension. We are concerned because we do not have any records and would like your advice on how to find out what we are owed and when and how we can claim it. EF Ras Al Khaimah

Your first step is to contact the International Pension Centre, which deals with state pension issues and other benefit entitlements for Britons living abroad, to notify them of your current address and contact details. The telephone number is +44 191 218 7777 and you will need to provide your National Insurance numbers. You can request a forecast of your state pension entitlement by contacting the pension centre. Alternatively, you can apply for a state pension forecast online via The Pensions Service website (www.dwp.gov.uk). For men born before December 6, 1953, the UK state pension age is currently 65 years. For women, the age at which the pension is payable varies depending on the date of birth. In this case, EF will be entitled to receive her state pension in May 2012, at the age of 61. Although non-UK residents may claim their state pensions, how they are paid may vary. The pension increases in payment each year for UK residents and also for those who are residents in the European Economic Area, Switzerland, or one of the countries with which the UK has a reciprocal social-security arrangement, such as Canada, the US, New Zealand and the Philippines, as well as some others. The UAE does not have this arrangement, so once a UK state pension starts being paid, the income payable will not increase annually. In real terms, this reduces in value each year because it is affected by inflation.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai. Contact her at keren@holbornassets.com.