German Pension Plans and UK National Insurance Contributions

40 posts in this topic

On 7.3.2018, 16:01:35, HEM said:

It seems to be important not to contribute for to many years (37 / 35).

This was a typo - should have been 30 / 35.

 

1 hour ago, optimista said:

Please explain if poss. Is it so the pro rata in UK does not exceed the German pro rata? You obviously want more DE than UK cos the DE pension is worth more. Is that logical thinking?

Nope.  Purely UK pension condition - you don't want to pay for too many years (max was 30 years, now 35 - anything above that is waste of money).  Thanks to reading about it on TT I was able to pay voluntary class 2 contributions to raise my NI years from 15 to 26.  Raising to 30 would obviously have been better but I only learnt of the possibility about 2 years ago through TT.  Better late than never.

 

As @PandaMunich has pointed out its not worth topping up missing years in the German scheme - but it was / currently is with the UK.

0

Share this post


Link to post
Share on other sites

You have to ask HMRC as they determine it.  It depends upon "which 10 years".

 

For example, the class 2 voluntary NI contribution for the 10 years 2006 to 2016 was £1391.20.  For the single year 2016/2017 it was £145.60.
Those were the 11 years I managed to add.  I paid by cheque from my UK bank account.

0

Share this post


Link to post
Share on other sites
26 minutes ago, HEM said:

You have to ask HMRC as they determine it.  It depends upon "which 10 years".

 

For example, the class 2 voluntary NI contribution for the 10 years 2006 to 2016 was £1391.20.  For the single year 2016/2017 it was £145.60.
Those were the 11 years I managed to add.  I paid by cheque from my UK bank account.

 

Figures match what I did last year. 

 

However, HMRC take 3 or 4 months to reply with a new quote.

I paid for the past 10 years as a lump (and so am now "up to date")

but still waiting to hear how to pay (as well as how much) for this year- 2018.

 

0

Share this post


Link to post
Share on other sites
16 hours ago, HEM said:

 - maybe this is where you are getting your 70% from?

I got the 70% from the Deutsche Rentenversicherung website some time ago. It applied to non EU citizens retiring to a country which Germany doesn't have a pension agreement with (so EU/EAA, USA and a few others are ok). I suppose post EU it will depend on the Deal. Not sure where Expat pensions are though on Theresa's priority list.

 

I tried to find the reference again, but I did find this on Expatica.com. 

"You will classed as a 'German resident' if you are a EU citizen, as will non-EU citizens if they legally live in a European member state or bi-lateral agreement country, otherwise a 30 percent deduction could apply to your German pension."

0

Share this post


Link to post
Share on other sites
17 minutes ago, PCarnold said:

I got the 70% from the Deutsche Rentenversicherung website some time ago.

 

This was abolished from 1. October 2013: https://www.deutsche-rentenversicherung.de/sid_73A630DC2369D8B60D0799BC6B7039E8.cae03/Allgemein/de/Inhalt/4_Presse/infos_der_pressestelle/02_medieninformationen/01_pressemitteilungen/2013/2013_9_24_auslandszahlung.html

 

You will get your entire German public pension, no matter where you live.

0

Share this post


Link to post
Share on other sites
On 08/03/2018, 18:59:34, HEM said:

Purely UK pension condition - you don't want to pay for too many years (max was 30 years, now 35 - anything above that is waste of money). 

 

That's right in the basic case, but for anyone who was contracted out of the UK state pension due to membership of an occupational or personal pension - and I think most people were in the 1980s and 1990s - there is a deduction from the new flat rate pension. 

 

In this case, even with more than 35 years, voluntary contributions can be effective to offset the deduction. 

0

Share this post


Link to post
Share on other sites
On 3/8/2018, 8:37:02, HH_Sailor said:

but still waiting to hear how to pay (as well as how much) for this year- 2018.

 

 

Neither email nor snailmail answer from HMRC.

But logging in to the system (GOV.UK-ID)  it now shows me up to date - and thankfully an "expected pension" increase. 

So I expect a letter to my german address in October requesting a further GBP 145 or so for this year.

I'll put it on reminder in case I need to request this explicitly.

 

0

Share this post


Link to post
Share on other sites

On a slightly different note, is it (compared to Voluntary Class 2 and Voluntary Class 3 UK NIC contributions abroad) at all good value to pay Voluntary Contributions to Deutsche Rentenversicherung? I understand that the impact depends upon how much you pay, but I got the sense that the return-on-investment is poor compared to the UK NI State Pension system?

0

Share this post


Link to post
Share on other sites

So by my calculations the UK scheme is very good value to pay into whilst abroad - even though the final maximum government pension in Germany is about 4x the UK amount - obviously dependent on how much you pay in and how many years you work.

 

UK Class2 - Employed/Self-employed abroad.  Over 1 year pay in about £12.80pm for a £20.40pm pension increment, up to a maximum of £714pm pension after 35 years.  So the payback is about 8 months on retirement.

 

UK Class3 - Non-employed abroad.  Over 1 year pay in about £63.60pm for a £20.40pm pension increment, up to a maximum of £714pm pension after 35 years.  So the payback is about 3 years & 2 months.

 

German - This is pro-rated on the amount you pay in, but over 1 year paying in a maximum of €604.50pm (employees contribution only) for a €66 pension increment, up to a maximum of about €3390pm pension after 52 years.  So a payback of about 9 years.  Note if self employed and you have to pay the employers contribution too, this would double the payments and the payback I think to about 18 years!!

 

After several telephone calls and letters to HMRC I've finally managed to catch up with Class2 and 3 payment contributions where applicable - lots of errors in their calculations and allocating payments against the wrong years etc.  They also tell me the Class2 option for employees abroad stops in April next year - likely although not confirmed is that we would have to pay from then on at the more expensive Class3 rate.

 

0

Share this post


Link to post
Share on other sites
1 hour ago, PCarnold said:

UK Class2 - Employed/Self-employed abroad.  Over 1 year pay in about £12.80pm for a £20.40pm pension increment, up to a maximum of £714pm pension after 35 years.  So the payback is about 8 months on retirement.

I can confirm that - I managed to increase my UK NI contribution years from 15 to 26 - and have lived 12 months past my UK retirement date.

 

Its all thanks to TT - otherwise I would have not known about this possibility at all (only wished I had known about this a few years earlier as I could have increased to at least 30 years).

0

Share this post


Link to post
Share on other sites

Hi,

I don’t seem to be able to create a new post but my question is related to this thread.

I am currently going through the Einbürgerung process, which has been a last minute decision & only been made possible by the short Brexit delay 😅 I’m self employed & have lived here for 8 years (just!, although was here 2001-2003 also) as self employed I haven’t paid into the state Pension scheme & I was originally planning to pay the voluntarily NI uk back payments of which I have a statement for. Obviously now going for citizenship they want to see Pension provision & the advisor seemed little interested in any UK pension scheme without an added German pension pot. I had previously looked at a German Rurüp Pension scheme but had not proceeded due to being unsure if I will be in Germany for my retirement. I’m now wondering if it is advisable to back pay NI & open a Rürup & if on opening I can pay a lump sum into Rurüp , am I better to pay into both or not back pay NI & invest all into Rurüp? & what happens if I do return to the UK? Is there then any complication in paying into Rurüp from UK? If anyone has any further ideas or words of wisdom it would be gratefully recieved.

Many Thanks

0

Share this post


Link to post
Share on other sites

Hello there,

During Einbürgerung the initial Beamtin was the same, as my German pension wasn't worth much she asked for proof of UK pension, savings, property etc. all translated - cost me a lot of time and money.  Anyway after I did this my second allocated Beamtin wasn‘t interested in any of this, just wanted to see a payslip which showed I‘m actively paying into the German scheme, and my wife who is self employed and not paying any pension provision didn‘t have to proove a thing.

I‘ve done my homework and for the UK state pension, as employed or self employed abroad, you get a very good deal on class 2 contributions, only a few pounds a week, so a good payback.  This class 2 option was due to stop soon, but I hear it will be extended.  Plus backdating, although a lot of ringing up the DWP is well worth it.

I also have a Riester, I guess similar to a Rürup - I‘ve no idea if you can or it's worth paying in from the UK as I think the tax advantages come from your German tax bill, but I was assured by the Kundenberater that post brexit no problem claiming the pension.

0

Share this post


Link to post
Share on other sites

Hi,

Thanks for your reply.

yes, I came to the same conclusion with NI back payments & you are right in that option stops April 5th this year but my papers were submitted prior so I am safe on that front. Just my Einbürgerung advisor was very keen to see payments into a German fund as well & being self employed Rurüp is really the only option available ( which would also satisfy them for Einbürgerung). I suspect your wife was not required to show, because if married you can declare your combined/spouses pension savings on the Einbürgerung form.

0

Share this post


Link to post
Share on other sites

Ah yes, but I think the abolishment of Class 2 was either put back again or scrapped in the last budget. So maybe we’re ok for a while yet to get further towards the 35 years.

For the pensions, yes, they were ok that I alone was paying into the german scheme, but the total numbers at the time were negligible and she didn’t care about the details of any combined uk pensions or savings.  Guess it depends on the policy of your local Amt and Beamte you see...

0

Share this post


Link to post
Share on other sites

It always depends very much on where you apply for a permanent residence permit or citizenship. The different Ausländeramts have very different approaches and rules about this.
When in doubt whether your UK pension is accepted to be counted in (which, legally, it should) and in order to avoid any delays etc., you can ALWAYs substitute the public pension with a private pension. It then just depends on what kind of private pension you can use as a substitute...that is, where the local regulations do differ a lot. Some will accept any form of pension schemes (like Munich KVR, for instance), others have very specific rules about the total amount the policy shows it would accrue guaranteed by the time you'll be turning 67 and will allow, for instance, only a RÜRUP pension plan for it, because a RÜRUP pension is technically mirroring the German public pension in so far as you can't cash in on the invested capital anymore (and thus squander it instead of receiving a pension ).

So, check with your local Ausländeramt and get this information. Then have a qualified/specialized advisor work out a fitting quote for such a pension plan for you so that you'll know about your costs for better planning.

 

Cheerio

 

I am a professional independent insurance broker, financial adviser, and authorised advertiser. Contact me.
1

Share this post


Link to post
Share on other sites

it should also be noted

If you plan or want or it can be achieved to retire early.

 

Get a statement of how many years you have payed into the UK state pension system, either voluntary or when you forced to by working in the uk ( probably works with other country's as well ) . Also if you were in full time education after you left school ( college / university etc ) get a statement from the UK ( probably works with other country's as well ) showing you did this.

 

Register this with the German pension system.

 

If you do this, you will be allowed to retire early ( normally ) from 63 years and get a state pension,  to allow this you have to prove that you have worked or been in further education for a minimum of 35 years. if you are a regular employee, you can also use this to trigger early retirement under the alters tiel zeit rules.

 

Of course, you will get a lower pension, because you will be drawing it from an earlier age, some that's up to  you to decide on the work / life balance, if you do not register your work years and education years, and therefore show 35 years, then you cannot trigger  the early retirement.

 

 

0

Share this post


Link to post
Share on other sites

Hi,

Thanks for your replies.

 When I inquired about how much of a pension provision would be required to be shown, monthly on retirement, they couldn’t/wouldn’t give me a fixed sum, rather stated it’s on a case by case basis ( I’m LKr. München) but she said whilst UK pension would be taken into some account, her main interest would be on what German pension provision I have. My plan was to set up a Rurüp with perhaps a lower monthly payment, of 150-200€ per month & then at the end of each year look to pay a lump sum in. It’s just difficult to know if this is the right way to proceed or at what level to set monthly contributions at for the Rurüp plan; i.e what to they deem as acceptable.

0

Share this post


Link to post
Share on other sites

Hi Yesterday...

Regarding your post - one of my colleagues also mentioned this but we were unsure of the rules. 

 

Are you saying you can get your UK state pension at 63 if you retire early (I thought it was always 65-67) or the German state pension at with or without Altersteilzeit at 63 only if you have the 35 years qualification?

 

I guess by the time I'm 63 I will have 35 years+ of UK state mention contributions through working and voluntary contributions, so a full pension there and about 20 years on the German State pension so I would think about 50% of what I could achieve if I would have been here long term.

 

So if I'm lucky enough for Altersteilzeit or able to retire at 63 what do I need to do - What do I tell the German Rentenamt?

 

I also don't want either my UK or German pensions being reduced (other than age related) because one or the other discount years I have paid into both schemes or something like that - I spoke with the HMRC and they say this won't happen for the UK state pension but I'm not sure on the rules on the German scheme.

 

thanks for the advice!!

 

0

Share this post


Link to post
Share on other sites
1 hour ago, PCarnold said:

Hi Yesterday...

Regarding your post - one of my colleagues also mentioned this but we were unsure of the rules. 

 

Are you saying you can get your UK state pension at 63 if you retire early (I thought it was always 65-67) or the German state pension at with or without Altersteilzeit at 63 only if you have the 35 years qualification?

 

No, you have to wait until 65+ to get your UK pension, you cannot get it out at an earlier point with a loss on your pension.

 

But you can draw your German state pension from 63 - if you can how 35 years contributions and a lower amount.

 

if you are still in Germany when/if you get to 65+ and you want your UK pension, then you apply through the German system, to get the extra payments from the UK.  The payment for both the GERMAN and UK pensions will be delivered to your German bank account.

 

This could change in a no-deal BREXIT situation

 

1 hour ago, PCarnold said:

I guess by the time I'm 63 I will have 35 years+ of UK state mention contributions through working and voluntary contributions, so a full pension there and about 20 years on the German State pension so I would think about 50% of what I could achieve if I would have been here long term.

 

So if I'm lucky enough for Altersteilzeit or able to retire at 63 what do I need to do - What do I tell the German Rentenamt?

 

Depending on your age, you can start altersteilzeit when you are 59, on 80% of your net salary, working as normal, after 2 years you stop working @61 - after that you do not goto work, but will still be paid until you are 63 - then you get your German state pension - at 65+ you get your UK pension.

 

Again, not to repeat what others have said,

 

 The UK pension for what you put in to what you get out is an excellent investment. Try to get 35 years of payments 

Ensure you register your years working and education with the Germans, to allow early retirement.

1 hour ago, PCarnold said:

I also don't want either my UK or German pensions being reduced (other than age related) because one or the other discount years I have paid into both schemes or something like that - I spoke with the HMRC and they say this won't happen for the UK state pension but I'm not sure on the rules on the German scheme.

 

thanks for the advice!!

 

 

1

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now