z1565124

Sorry if these have been covered before but the search function is down and so wanted to get this up before I forget.

I'd like to make NI contributions and requested a statement a few months ago and have that in hand, I have a couple of issues though:

1. Class 2 vs Class 3 - was told on the phone that working overseas meant I had to make additional contributions at C3 as opposed to the cheaper C2. I've read and re-read the NI website and I can't see that noted anywhere. Anyone had the same experience and any chance of contesting it?
   
2. Catch up contributions - understand I can make 6 years of catch up contributions (at C3 per the call I had) but am I able to put this off, whilst still making annual contributions, and still have the ability to do this in a few years time when I return back to the UK?
   
3. Paying the NI contributions - what is the best way to actually pay the NI contributions? I don't have a UK or an international account at this time only a regular US checking/savings account.

Thanks in advance for all your help.

Richard

holly_1948

Don't know about class 2 versus class three.

But you are now very close to the end of the UK tax year. You can catch up gradually but you must make payment (they must receive the payment) before that magic date in early April and make it clear that you are paying for the oldest year of arrears - in order not to lose a whole year of entitlement to pay arrears.

You must never be more than six years in arrears or lose the chance to pay in arrears, but you can pay two years each year until caught up for example.

durham_lad

When I started paying contributions after a very long absence I thought I paid for 7 back years, but your post has just explained what happened. I applied in March so in fact paid for the whole of the year ending in April, plus 6 back years and then started paying the current year month by month.

rebs

My understanding is if you are employed whilst living abroad, you can pay for Class 2 contributions.

If you are not working, then Class 3 applies.

ETA - here's the gov webpage which talks about what conts you make while living abroad. http://www.hmrc.gov.uk/ni/volcontr/abroad.htm

OdysseusLite

Hi Richard,
To pay voluntary NICs, you have to have paid a certain number of years (3, I think) in the UK before leaving. Also you have to have a “complete NI record” immediately prior to leaving. I was turned down for class 2s because I didn’t have a complete record, which presumably means I didn’t pay enough contributions to qualify for a full year in the year before I permanently moved abroad. I worked 9 years in the UK, then came to the US for a few years, then worked in the UK again for a couple of months. I sent a letter pointing out that the earlier date was my permanent move and the 2 month period was just temporary employment while I sorted immigration issues. They accepted this and gave me permission to pay class 2.

You need to write to Newcastle and get permission before paying class 2s. In the meantime, I think it’s not a good idea to pay class 3s because you may not be able to switch after that. I can post the address & phone no. if you like.

You can pay up to six years prior to any year in which you apply. In other words, you can pay for any of the years 2008 through 2014 or all of them in one shot if you like. In 2015, you will only be able to pay back as far as 2009, and so on. You have to say which years you are paying for, so it makes sense to pay the oldest ones first. I think you can actually pay even further back if you also pay a penalty.

I’ve been looking into this myself but haven’t done it yet. XE Trade at www.xe.com lets you send funds in pounds to the UK via electronic funds transfer (EFT) which they say is free. You could probably do the same through your own bank although I couldn’t say if it is free or not. Haven’t got this far yet myself, so I can’t vouch for anything.

The HM Revenue website seems to say you can pay this way:
http://www.hmrc.gov.uk/tools/bankacc...ss2nics-os.htm

Also, be aware that UK pension laws are being revised, so paying voluntary NICs may or may not be a good idea.

Good luck!

alfista1

Excellent info!

I was just about to start paying class 2 from overseas before we were just made redundant!
Now trying to get back to the uk.
I will pay some previous years. I have seven clocked up so quite a few to go but I am 38 so still time.

Hope Britain doesn't make a hash of this like they have done for non-eu spouses!

BobNorth1951

When I was in the U.K. last year (2013), the number of years needed to obtain a full old age pension was 30 years of contributions, with the minimum needed to get a "part" pension was only 7 years.
After 5th April 2016 however, this all changes to needing 35 years of contributions to get a full pension, with 10 years at least to get a "part" pension.
So . . . . if you happen to turn 65 by 4th April 2016 and put in for an old age pension on the day, you'll get in on the old qualification.
Otherwise, you'll need to do your sums regarding the new amounts needed if you are claiming after that date.
I'd thought of paying an amount into the U.K. pension scheme myself, as I'd worked 4 years before migrating to Australia in the early 70s, but didn't think it viable with the new amounts of years I'd need to put in to get anything worthwhile back, so now am just relying on the Australian pension system and my work pension.

dunroving

Of course, under the new regulations, even with 30 years you will get a higher pension than under the old regulations.

holly_1948

Does that mean that those of use already retired and with 30 years contributions will be getting a healthy increase?

rebs

Not if you are already in receipt of your state pension - there won't be any changes to existing payments. The new rules will only apply to those people claiming their pension after April 2016.

dunroving

So much about the recent changes in the UK state pension is just messed up.

There are some things you should just not change, or change only slightly, and state pension is one of them.

How you can go from needing 45 years (or whatever it was) to 30 years to 35 years in less than a decade (?) and from a full pension of about £100 to about £150 is beyond me.

I can see why some people are pretty mad - a birth date varying by just a few months or years can have a huge impact on your state pension situation.

holly_1948

Tell me about in. Roughly 25 years ago my sister lost 20 years of State Widow's pension because her husband lived three days "too long".

formula

It always use to be 39 years for a woman and 44 years for a male. It was then made too low at just 30 years and even stranger, that people could now have a part pension even if they only paid in for 1 year. So they quickly amended it to 39 years for all and people must pay in for 10 years before you qualify for any level of pension.

That's to stop people getting benefits. They are cutting back on what they pay out on the welfare state bill and removing some benefits. This new pension rate will cut the ever growing welfare bill that the country can't afford, even though State Pensions come from the welfare purse.

Those women who thought they would get a state pension at age 60 and now have to wait until they are 66 (soon to be 68) will lose a lot more money than those who retired at 60. The same for men who were to retire at 65 and now find it is 68. It works out to an average loss of just under 6k per year for each year their pension is put back and becomes a saving to the state.

Plus someone on just the basic state pension of £110.15pw now receives hundreds each month extra in benefits and other passported benefits, taking their weekly income to much higher than the basic state pension of £110 pw even if they have 100s in savings! While someone on at least £145 per week income now does not get given these extra benefits even if that person has no savings. That difference is all down to the hastely brought in Pension Credit benefit with it's £145pw cut off, that was also brought in as "a vote winner" and like Tax Credits, was not very well thought out.

Not everyone will get the £145pw under the new system.

If you opted out of serps and put into another pension, then you won't get the full amount of £145 state pension but the total of all your pensions will be at least £145pw.

Those who didn't opt out of serps and would have more than £145pw state pension (including their serps) will now only get £145 it seems.

Those who were hoping to get a 60% state pension based on their partner's contributions as they themselves didn't contibute or contribute for enough years, will now get nothing.

Under the present system, those who worked for years and and paid into a pension can find themselves worse off than those who didn't. The new system is being focused on what you contributed is what you are paid out (as long as it is more than 10 years) with no extra benefits and passported benefits.

They seem to be looking at the same type of system for the NHS, which will benefit those who contributed for years and then worked or retired abroad only to find they can't use the NHS when they need it.

rebs

Just to correct a couple of inaccuracies...


If you are referring to the introduction of the single tier pension in 2016, the amount of qualifying years required is 35, not 39.


You might, if you are able to make up your qualifying years to 35, either by working or paying voluntary contributions.

Not according the government factsheet - https://www.gov.uk/government/upload...fact-sheet.pdf - check out the 'Myth Busting' section ....

dunroving

... in other words, they have taken one complicated system and replaced it with another complicated system.