Is it worth paying UK voluntary National Insurance contributions?

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Hello Toytowners,

 

I recently found out through HM Revenue & Customs NIC & EO that I (at the age of 43) have 24 years UK National insurance contributions. I'm now living and working in Germany paying German taxes etc but is it worth me paying UK voluntary class 2 contributions still? They've also informed me that I have a short fall of 3 years which I can pay voluntarily so is it in my interest to pay this?

 

Just to add, as of April 2016 a maximum of 35 years qualifying will be required to receive the new full state pension.

 

Many thanks in advance,

 

Benny

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I though that it would be the class 3 that one would have to pay:

 

Class 3 National Insurance Contributions

 

These are voluntary contributions that count towards your total contribution record. You can pay them only if:

 

you're not working

you're not liable for, or you're exempt from, Class 1 or Class 2 contributions

your contributions for a specific year aren't enough to count towards state pension entitlement, or

you live abroad.

 

http://www.which.co.uk/money/tax/guides/national-insurance-explained/national-insurance-rates/

 

Cannot find much info on the class 2 which are much cheaper.

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I 'bought' some qualifying years, but found out a few years ago that these will be considered in Germany and you have to contact the German pension people to transfer the qualifying years. I have still got to do this and therefore the information I just gave may be wrong or may have changed again. I am in a bit of a pondery on what to do, because I do not know where I'll be in 30 years time. I'd like to keep the qualifying years in the UK in case I move back, but I definitely do not want to lose them.

 

Does anyone know what the current situation is regarding this? I know that a few folks have discussed this before.

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NeilD As far as I'm aware through speaking to an on-line adviser I can pay class 2 contributions, also the shortfall information given to me shows an amount based on Class 2 rate. What the adviser couldn't answer was if it's worth paying them now I'm working in Germany.

 

There's more about the different classes of contributions by clicking on the NI38 link. On Page 12 under Paying voluntary NICs while you are abroad explains class 2.

 

I think my next step is to send a CA3916 form to HM Revenue & customs to request a statement of National Insurance contributions and then register this with the German State Pensions Head Office. I'm hoping they'll advise me further once they have this information.

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I know this is adding to an older thread but the subject is that same...

 

I had only discovered by chance (through TT) that it was possible to pay voluntary UK NI contributions.

From UK employment I had 15 years contributions.  After some to-ing & fro-ing I've been able to pay voluntary contributions for last 10 years bringing up to 25 yrs.

In April this year I can pay for the year 2016/2017 - then its finished as my UK pension is payable as of July.

 

So that will be 26 years contributions - wish I'd found out about this earlier but 26 yrs is better than 15.

HMRC decided that I needed to pay Class II contributions  & the whole thing seems to be a good deal - I only need to live just less than a year after starting to draw pension to "win".  Thats a bet worth taking.

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Isn't there something like a pension deferral that could make it worth your while making additional contributions?

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It can definitely worth paying voluntary contributions. I left the UK with 29 of contributions.  At that time, only 30 were necessary for a full pension so I was in no hurry to pay the extra year. Since then, it has changed to 35 years for a full state pension approx. £155.75 per week. 

 

Before HMRC will discuss voluntary contribution options, you need to obtain an up to date State Pension Statement. Here are a couple of phone numbers...

 

0044 191 203 7010 deals with residents abroad.

0044 191 218 3600 general pension line.

 

Just state your national insurance number.  It takes about 4-6 weeks for the statement to arrive.

 

My current weekly state pension is £122. They also calculate what your contracted out pension should be if you were at any time contracted out.  

 

Check this link https://www.gov.uk/national-insurance-if-you-go-abroad and read the link to the form NI38.  It's important to clarify your residency status before making contact after you receive the pension statement. Paying voluntary class 2 NI is considerably less at £2.80 per week than it is to pay class 3 NI at £14.10 per week.  The advisor told me that for each extra qualifying year, £4.45 is added to weekly pension. 

 

I believe 10 years is the minimum to qualify for state pension. It's a shame to lose anything even if it's under.  Might as well top up.  

 

 

 

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I got a letter some years back asking me to make up NI payments, as I had left the UK at the age of 32.

 

Like a young idiot I ignored it all, and now I am kicking myself in the foot.  I worked from 16 to 32 and paid NI all the time and now I have lost it.

 

 

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I looked at this web page.

 

https://www.gov.uk/new-state-pension/living-and-working-overseas

 

Example

You have 7 qualifying years from the UK on your National Insurance record when you reach State Pension age.

You worked in an EEA country for 16 years and paid contributions to that country’s state pension.

You will meet the minimum qualifying years to get the new State Pension because of the time you worked overseas. Your new State Pension amount will only be based on the 7 years of National Insurance contributions you made in the UK.

 

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41 minutes ago, More tea, Vicar? said:

I got a letter some years back asking me to make up NI payments, as I had left the UK at the age of 32.

 

Like a young idiot I ignored it all, and now I am kicking myself in the foot.  I worked from 16 to 32 and paid NI all the time and now I have lost it.

 

 

 

Why do you think you've lost it? 

 

I recently helped a relative in the same situation.  He'd worked in the U.K. many moons ago for about 15 years and moved to Germany about 30 years ago.  He'd forgotten about these years in terms of state pension.  When I called the pension department, they said that there's basically no way you'd ever lose contributions nor pension eligibility. As he was already over state pension age, even 1 year qualifies for something. Doesn't matter if you are under state pension age either.  

 

He's now in the process of claiming back dated pension.  In these circumstances, you would  just need to contact the International pension department on 0044 191 218 7777 to clarify options. 

 

Similarly, the same applied to another relative.  He'd worked in Germany for about 10 years and had forgotten about pension eligibility after he moved to the U.K.  He's just gotten a few thousand euros back payment (I was surprised how much)  and will continue to receive German pension. 

 

 

 

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4 hours ago, emkay said:

 

Isn't there something like a pension deferral that could make it worth your while making additional contributions?

 

My understanding is these are two separate things:

 

1) You can defer the UK state pension - for each 9 weeks the pension goes up by 1%  (not dissimilar to DE state pension where its 0.5% per month)

 

2) You cannot make additional contributions once you have reached your normal pension age (normal for UK that is).

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12 minutes ago, HEM said:

 

My understanding is these are two separate things:

 

1) You can defer the UK state pension - for each 9 weeks the pension goes up by 1%  (not dissimilar to DE state pension where its 0.5% per month)

 

2) You cannot make additional contributions once you have reached your normal pension age (normal for UK that is).

 

I'm sure I'd recently read that voluntary contributions can be made as a lump sum as well as monthly/quarterly/annually.  As you aren't yet there, perhaps there's a chance to pay a lump sum if it's financially viable. More likely so as you were paying class 2. 

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Yes - I did pay a lump sum - for the 10 years starting 2006/2007 up to 2015/2016 thus making 25 years in total.

Once April comes I can ask HMRC much I would pay to get year 2016/2017 & that will be 26.

Which is better than 15 at least.

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2 minutes ago, HEM said:

Yes - I did pay a lump sum - for the 10 years starting 2006/2007 up to 2015/2016 thus making 25 years in total.

Once April comes I can ask home much I would pay to get years 2016/2017 & that will be 26.

 

I wonder if you can pay for the missing years prior to 2006/2007. I believe that many women do this to add qualifying years they missed during childcare.

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5 hours ago, emkay said:

 

Why do you think you've lost it? 

 

I recently helped a relative in the same situation.  He'd worked in the U.K. many moons ago for about 15 years and moved to Germany about 30 years ago.  He'd forgotten about these years in terms of state pension.  When I called the pension department, they said that there's basically no way you'd ever lose contributions nor pension eligibility. As he was already over state pension age, even 1 year qualifies for something. Doesn't matter if you are under state pension age either.  

 

He's now in the process of claiming back dated pension.  In these circumstances, you would  just need to contact the International pension department on 0044 191 218 7777 to clarify options. 

 

Similarly, the same applied to another relative.  He'd worked in Germany for about 10 years and had forgotten about pension eligibility after he moved to the U.K.  He's just gotten a few thousand euros back payment (I was surprised how much)  and will continue to receive German pension. 

 

 

 

 

Thanks a lot, emkay.  Excellent advice.

 

There's a "UK-Pensions-Panda" in you!

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To get a statement of how much you have paid in  contributions- go to Gov.UK website- International, and Contact/Email section- request this info. They will mail it  to you.

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3 minutes ago, RedMidge said:

To get a statement of how much you have paid in  contributions- go to Gov.UK website- International, and Contact/Email section- request this info. They will mail it  to you.

 

I have tried this 3 times to no avail.  They did once send me a form asking for all my employment dates (exact day starting, finishing).  But just supplying them with the NI number got nothing.  I gave up in the end which was stupid but I was busy with babies/small children and it slipped in priority.

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It has worked for us- to Canada and Germany. But then I had already started the application process a couple of years before, so had  provided dates then.

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@snowingagain, I've been here in Germany nearly 6 years and have so far obtained 3 pension statements without any hassle.  It might be easiest to contact the pensions department by phone.  I just gave them my NI number and gave them a German address, no problem.  They didn't ask for any proof of address.  They even accepted by new marital status without any proof necessary - not that it's relevant to my U.K. pension. I was never asked to provide employment information.  Your NI record should be generally accurate unless you suspect that an employer might not have correctly made the relevant contributions.  As is with much officialdom, if you are not confident about the advice that you get over the phone, just phone again with a few more relevant questions. Some advisors are better than others.  These are the phone numbers I've used recently. 

 

0044 191 203 7010 deals with residents abroad.

0044 191 218 3600 general pension line.

0044 191 218 7777 international residents

 

I know what you mean about letting these things slip down the list of priorities.  I've got several 'get roundtoit' things.  Next is tackling U.K. and DE will, testament.  Every time I make enquiries, the whole process seems horrendously complicated not to mention expensive. 

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