National Insurance Contributions - worth topping up for German national?

[rainboat 0]

Hi All,

My partner is a German national working in the UK and she now has 3 years of HRMC Class 2 National Insurance Contributions to her name. She is considering coming back to live in Germany and would like to know if it's worth continuing to pay HMRC contributions for the next 7 years in order to qualify for a UK pension (10 years in the minimum) - or whether it would be a waste of money.

 

She will get a German pension when she eventually retires but it's not clear if a UK pension would be on top of that or whether she would end up with just a single German pension even if she has 10 or more years with HMRC.

 

Any thoughts? Thanks

[HEM 11,161]

To answer your second question, IMHO she would get both (which will be my case in just over a year).  Whether the rules change before your partner reached retirement age I certainly cannot tell!

[NUFCrichard 9]

I am also interested in this topic.  I am English and worked for 4 years in London before moving to Germany, where I have been for 6 years. I am 33 years old.

I don't have any plans to move back to the UK, but I could make voluntary contributions so that I get a UK state pension.

 

It seems like it would be worth it to me, I would pay 2.80 a week for 31 years (2.8*31= 81.8) to get a 150 pounds a week pension. I don't know if that would negatively effect my German pension though, if it does, then I wouldn't make contributions. Can you get a full pension in the UK and in Germany?

 

Brexit complicates things a bit, but I think having the UK state pension as a back up would be a nice thing to have.

[bramble 9,602]

I receive a small UK pension as well as a German pension. I lose out on the UK pension due to exchange rates, even more so since the plummenting pound due to the Brexit referendum. It would only be worth it you live in UK when your pension is due, not if you intend to stay in Germany and the value of the pound never recovers. 

[HEM 11,161]

I had written to the Newcastle Pensions Centre mid-September requesting a State Pensions statement & also asking what would be the effect of paying voluntary contributions & whether my wife would receive a widow's pension when the time comes.  I think the web site states that they respond usually within 10 days.

 

About 5 weeks later I phoned them asking about my statement - they said a letter had been posted on the 21st October.

They did verbally state what the projected pension would be.  For the other two questions "an expert" would call back which he did a few hours later.

 

That letter arrived today which means it took 3 weeks (the letter was dated 21st October).  It also ignored my supplementary questions.

Clearly when writing letters one should put only ONE question per letter.

 

So don't anyone expect a rapid response!

 

[Gambatte 928]

I am also interested in this.

I lived in the UK for 11yr, worked there for 11yr. I paid NI as well as private pension contribution. Citizen of an EU-country (neither UK nor DE).

 

Interesting: private pension adviser in the UK stated at the time: "of course if/when you move country you can move your pension pot with you". What I learnt later: "yes, you can, but unless your pension pot is <100k considering various costs etc it's not worthed". Speaking now about private pension pot, not NI/HMRC. German advisor said: "no, you can NOT move your pension pot from UK to DE, period."

[Starshollow 6,069]

22 hours ago, Gambatte said:

I am also interested in this.

I lived in the UK for 11yr, worked there for 11yr. I paid NI as well as private pension contribution. Citizen of an EU-country (neither UK nor DE).

 

Interesting: private pension adviser in the UK stated at the time: "of course if/when you move country you can move your pension pot with you". What I learnt later: "yes, you can, but unless your pension pot is <100k considering various costs etc it's not worthed". Speaking now about private pension pot, not NI/HMRC. German advisor said: "no, you can NOT move your pension pot from UK to DE, period."

 

 

the state pension you can't move from the UK to Germany. However, your UK company or private pension pots you can, of course, move a) outside the UK and b ) if you like even to Germany. There are a couple of German providers who have ROPS (formerly QROPS) compliant pension plans where you can move it to. Of course, the average German advisor will have no clue about that...little wonder.  You might need to talk to a more specialized advisor.

Whether that is going to make sense at all or not, financially speaking, is a different issue entirely. Nowadays you'll need first advice from a UK based certified advisor, otherwise, the UK pension insurance/institution will not release the capital. That UK advisor will need to charge a fee and let you know the pros and cons from a British point of view about transferring your capital out of the existing pension pot. I..e what kind of inherent pension guarantees and other rights you might be losing/giving up. On the other hand, you might evade the "death tax" or simply want to get your capital out of UK for any kind of reasons. This has to be balanced.

Once that is achieved, you can choose either an "offshore" (Q)ROPS-plan...but beware of the many snake-oil-salesmen out there who'll try to sell you some overpriced and risky investment vehicles based on the Channel islands or Gibraltar or whatever where only the "advisor" makes a profit from your transfer. There are a few (but really only very few) decent offshore plans available, even fewer that do not cause taxation issues on the German side as long as you are a tax resident here.  Therefore it can make sense to move the capital into a German plan which then you also continue to pay in in order to beef up your overall final pension claims.

 

As I said, it is a matter for experts who have the right network in the UK for the relevant bit of advisory process there as well as the knowledge and connections to the few German providers to get you into a German plan that is compliant with the relevant rules and regulations in UK in order to avoid penalty taxes later.

 

Cheerio

 

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[john g. 37,775]

Great post, Starshollow! I just posted the link to it from an enquirer who was asking a semi-related question!

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[RedMidge 6,638]

Not to forget that your  UK state pension,  will not get  COL increases in  some countries outside the EU!  So, if you move to Australia or Canada- it will stay at the same level. (Unless laws change)

[Gambatte 928]

9 hours ago, RedMidge said:

Not to forget that your  UK state pension,  will not get  COL increases in  some countries outside the EU!  So, if you move to Australia or Canada- it will stay at the same level. (Unless laws change)

 

I remember in 2010 before the general election in the UK one prominent politician campaigning hard to change this.

Guess what? He then became member of the government. First thing he said was "sorry guys, there just isn't enough money for this". 

[Tim Hortons Man 542]

Are not EU pensions linked? if you worked in the UK and Germany and retire here Germany will pay you the combined penion?

 

edit: re read Starshollow's post and he was referring to transfering a private pension not a state pension.

[HEM 11,161]

So here is the deal concerning DE & UK State Pensions (as I'm in that situation & am finding my way around).

 

In my case the DE State pension pays from age 65.5; the UK State Pension from 65.

 

The UK State pension is not "simply added onto" the DE one.

 

According to our local Rentenberatung you would normally apply for your DE Rente about 3 months before retirement.

They say (& UK confirmed) that I apply for the UK Rente via the DE Rentenberatung - did not say so far whether this is mandatory or "we can do all for you".

They said that given that there is another EU (i.e. UK) Rente involved I should apply 6 months in advance.  When I pointed out the

fact that my UK pension is payable 6 months earlier than the DE one they claimed that the UK pension would be paid in arrears.

Not so sure about that one - I must visit them again.  Also to find out whether they handle the transfer & payment of the UK pension or I have to.

 

One thing I did find out - with the DE Rente a certain percentage (gets reduced each year by 2%!) is "tax free" & rest is taxable.

Retiring in 2018 means that 24% is "tax free".  This 24% also applies to the UK State pension.

[lamontia 71]

Found some information from the European Union that might help.

[NUFCrichard 9]

Sorry guys, but I am still none the wiser.  I have 9 years of contributions in the UK.  I have been here for 6 years, so can back pay my voluntary contributions to get to 15 years.

I have worked in Germany, so have 6 years of pension here too. I plan to stay in Germany.

 

When I retire (I am only 34, so it is a long way off) will I get a UK pension AND a German pension? If I make voluntary contributions up to 30 years in the UK and work in Germany until retirement, I would qualify for a full pension in the UK and Germany. Would I get both? If not then are voluntary contributions pointless? 

 

The kicker question is: if the UK leaves the EU (I'm not convinced it will) then does that change anything??

[Allershausen 6,414]

1 hour ago, NUFCrichard said:

 The kicker question is: if the UK leaves the EU (I'm not convinced it will) then does that change anything??

Nobody knows. I recently asked the pension people in the UK what will happen and they eventually wrote back and said they don't know.