GaryC

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About GaryC

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  • Location UK
  • Nationality British
  • Hometown Swindon
  • Gender Male
  • Year of birth 1959

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  1. Not wishing to ask your actual age but if you have years that pre-date 2016/17 when the new state pension was introduced, do you know how many more years you need to pay NIC to get the max possible pension under the new rules?    At 5 April 2016 a calculation was done to move you from the old to the new rules.  Basically it was the higher of what you would have got under the old rules at that time and what you would have got under the new rules.  After that you add 1/35 x max new state pension for each year you add/pay voluntarily.    So, if you had no pre-2016 years you would need 35 years to get the max new state pension but if your stating amount at April 2016 was calculated as, say, the max under the old rules (£119.30 at that time but risen to £134.25 for 2020/21) you would need to pay "only" 8.19, i.e. 9 years to get the most possible when you claim your pension.  If you were 15 years from state pension age at 2016 and were only considering voluntary payments as not working in the UK, my understanding is that there would be no point paying more than those 9 years.  If you paid all 15 you would gain no benefit.  I think this is one reason why HMRC requires you to speak to DWP before they allow you to pay voluntary NIC.   I am sure you have done this but if not, ask HMRC for a state pension forecast and a copy of your NI record (this will also show years that are only part-filled.  Filling such years, if beneficial in terms of your pension, can be cheaper than filling different currently empty years).  Anyway, your forecast will show you what you could get in today's terms based on your current NIC record and what you could get if you make X more years' NIC payments (the max you can get, minus what you could get now, divided by £5 for 2020/21, equals number of years that need paying voluntarily).  Despite this your NIC record and, I think the pension forecast, may suggest that you still need to pay NIC for those 15 years.  This is because you pay mandatory NIC if you are working until state pension age even if you have already amassed enough years for a max state pension and the paperwork is not "clever enough" to deal with those looking at voluntary contributions...     Below is a copy of my forecast in case it helps de-mystify the process.  The max possible for me is £174.32 - about 90p per week under the max.  I have not paid NIC since I retired in 2019/20, so have a part year for 2019/20, hence the third row in the graphic.  If I pay no further NIC I would get £149.30 per week; pay 2020/21, 22, 23 and 24, then I get £169.32. Pay also the missing part of 2019/20 then I get the max possible of £174.32.    I then have to live about 3 1/4 years after claiming my pension to recoup the investment in voluntary NIC.  Not to be too morbid about it, but delaying paying Class 3, and possibly even leaving that decision until early 2025 (shortly before I claim my pension) would ensure that if I were, by that time to be terminally ill (thankfully no signs of that at the moment!!!!), I could save the money as there is no widow's pension in the UK.  Don't you just love getting old!   Hope this helps.   
  2. I think this is where it will be published in due course   Voluntary National Insurance: Rates - GOV.UK (www.gov.uk)   The text at the bottom of that page shows there is a difference between time limits for Class 2 and Class 3 When you pay different rates If you’re paying Class 2 contributions for the previous tax year or Class 3 contributions for the previous 2 tax years, you pay the original rate for those tax years.  
  3.   I should just add that 2021/22 is my projection of the 0.5% increase, so it could be a little or a lot different once published on GOV.UK...
  4. Sad I as am, I am keeping a record for personal use as we are having to pay Cl.3.  It is of course all on GOV.UK if you want or need to check that I have picked up the right numbers...   Year   Cl. 3 Rate   2017/18   £741.00   2018/19   £761.80   2019/20   £780.00   2020/21   £795.60   2021/22   £800.80     
  5. I was about to say broadly the same as SusieT.  At the end of the day, I don't think HMRC care who physically pays the amount, only that is it paid with the right reference number to the account number they provide.  As long as that account has an IBAN number, you should be able to pay from your German account - taking the exchange rate hit there rather than wherever else you change your currency (I know that might be more expensive...).   The other thing to note is that there is no requirement to pay monthly, or even annually for that matter, well for Class 3 payments anyway - Class 2 could be different, so you should check with HMRC.  In general (again, for Class3) you can pay up to 6 years in arrears, i.e. 6 years after the end of the year in question.  However, if you pay more than 2 years after the relevant year you pay at the rate for the year in which payment is made, not the year to which the payment refers.  However, given that Class 3 payments are only increasing by 0.5% from April, you may choose to take the hit. For instance, if you wanted to pay Class 3 for 2017/18 in, say May this year, you would pay £800 rather than £741, Had you paid by the end of March 2020 it would have been £741 and by the end of March 2021, £795.   My thinking therefore is have a chat with HMRC (might also get pointed at DWP as HMRC generally asks you to confirm you have checked with DWP that making voluntary payments will advantage you) and say you would prefer to change from making payments monthly to making them annually and for current cash flow reasons (Covid, furlough etc) you wish to stop altogether and make lump sums relating to the current year and future years within the 2 and 6-year time limit windows.  You would have to make careful diary notes to make sure you don't miss the deadlines but could make payment for 2 or more years at a time, saving on agro and transaction costs.  You could also chose a time when the £/€ rate is favourable for you (within reason).    
  6. Not quite.  You need 5 qualifying years to be eligible for any pension, then 35 qualifying years for a pension for langjährig Beschäftigte.  Currently you can take the 35-year version at 63, subject to a reduction of 0.3% for each month (3.6% per year) you draw it early before normal pension age, which is increasing from 65 to 67. There is then the other form of pension with 45 qualifying years which can be taken at 63 without reduction but that is increasing to (I think) 65 or 67 along with the general increase in pension age.  For instance as a 1959er, I could take the 45-year version at 64 and 8 months if I had the qualifying years.   The time you prove for post-17 education can feed into qualifying years, separate from any calculation under the inter-country agreement on social security coordination.  The employment history would probably feed mainly into the inter-country computation (assuming the German/USA rules work similarly in this regard to the EU rules).  The rules are very complex and my knowledge is only scratching the surface but they can lead to an increased amount of pension.   For instance, we worked in Germany for about a decade but when the pre and post German years are added to the record each of us can claim the pension at 63 as we have more than the necessary 35 qualifying years.  Adding the non-German history into the record makes a difference financially for my wife but appears to have no affect on financial effect on me.  I think this is related to the fact that I have a simple "finished education, went to work, retired" history, whereas my wife has a more complex history with some periods of unemployment, raising kids and so on.  For her it made a 20% difference in the final reckoning.   All I would say is, if you provide the info and it makes no difference then you have peace of mind, but if it makes a difference, as it did with my wife, then you're singing all the way to the bank...
  7. The Germans are interested because they take post-17 education and early years employment into consideration for your qualifying years (Wartezeit) and, depending on what sort of education and early years employment you had, for Entgeldpunkte.  The Wartezeit determines whether you qualify for a pension at all (minimum 5 qualifying years) but also whether you could take a pension at 63.  The years in non-Uni education and employment before the age of, I think, 25, can also give points (Entgeldpunkte).  In simple terms, each full point is worth 34.19€ (Old German States) per month on your pension in today's terms, so "every little helps.    We tried to get letters from the various schools and provided education qualification certificates, which the DRV was happy with.  They asked questions about the nature of some of my wife's education and agreed that it was of the type which gives "extra points".  As far as employment is concerned, I think an indication of periods of employment and any salary details would be a good starting point.  We found them very accommodating and helpful because, in the end whatever you can provide which is acceptable the to officer is to your advantage as it fills holes in you German record.
  8. Moving back to UK after Brexit

    That rings a bell.  I read some PDF from the Bundesbank and recall some exemption in that space but deleted it from my downloads and cannot find it on the Interweb again...  
  9. Moving back to UK after Brexit

    Technically that would seem to be a gift from her to you with whatever consequences that has for the German tax position, unless, I suppose, it is from a joint account but that would be for the German tax experts on here to opine on... 
  10. Moving back to UK after Brexit

    Indeed.  We bought a kitchen in Germany and transported back to the UK (long story but saved us about 60% overall).  I should perhaps have bought a forward contract for EUR but didn't and then the looming Brexit reality began to take hold and the pound became somewhat volatile.  For the 10 days running up to the deadline for paying the deposit and then the balance I was watching the rate very closely.  It dropped by a massive 10 cents and then recovered both times, so it was sweaty palm times but I got away with it - just!!!  For those transactions every cent was about £100...  
  11. Moving back to UK after Brexit

    The only consequence of moving the money is the exchange cost (0.4% Starling; 0.35% Transferwise etc).  The transfer of taxed income (earnings etc) from one place to another is not income for tax purposes.  Also, whereas transfers to Germany from a foreign of more that 12,500 € must be reported to the Bundesbank, there is no such requirement int he UK for transfers from the EU.   Just move the money when the €/£ rate is favourable for that direction, i.e. when the £ costs maybe 1.10 or less, if you can wait...  Just keep an eye on the rates.  On 20k € ever Euro cent on the exchange rate is worth about £140...  
  12. Moving back to UK after Brexit

    What qualifies as free in this context is interesting.  If you don't break the "rules" by exceeding overdraft limits or missing payments then if there are no monthly charges or transactional charges it feels pretty free to me.  And if you are not borrowing money then similarly no charges, hidden or otherwise hit your  account.  Thirdly, I guess that interest rates paid are effectively suppressed but they are immaterial anyway at the moment.  So for me, my banking feels pretty free...  And that compares to potentially moving to something like 80€ + to keep the comdirect set-up I was given when I applied for an account (Girokonto, pre-paid Visa etc).  Now that feels anything but free.
  13. Moving back to UK after Brexit

    That's the polite way to describe it, lol.  I think I'll stick with my Starling Account as a UK resident as it is free, has a Euro IBAN structured account and of offers good rates.  I guess for those in Germany, N26 may be a similar option, though seems a little more restricted as you have to pay for the physical debit card and only get three free virtual card cash withdrawals per month.  I guess that reflects that German banks have always been less keen on free banking.  Way back when, when I lived there, you got three free transactions per month - salary in, rent out and the rest in cash (no debit or credit cards in the time of the Ark). 
  14. Moving back to UK after Brexit

    Looks like Consorsbank is going to he charging 4€ per month from March!
  15. Moving back to UK after Brexit

    Banks are required to provide a variety of information to the FA these days...