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Money, money, money (the retirement and financial issues thread)

Money, money, money (the retirement and financial issues thread)

Old Mar 3rd 2013, 11:54 am
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Default Money, money, money (the retirement and financial issues thread)

Several times recently, financial issues associated with moving back to the UK (or even just living in the UK) have come up and they sometimes get lost in the middle of unrelated threads.

I thought I'd start this thread, being someone who has experienced the financial positives and negatives of being an expat and moving back to the UK. I'm also trying to put together a strategic plan to either retire early or semi-retire or change career until retirement and have learned a lot from people on BE about taxes, WEP (it's a US thing to do with social security), national insurance, etc.

Other questions that come up have to do with cost of living in various areas, how to get by on little money, what the changes in UK state pension mean, etc.

So, as a little experiment I thought I'd start a thread on the topic and see how it goes. It may end up focussing on older members (because a lot of the questions seem to be about retiring, or returning at an older age with limited funds) but I don't see that it has to be limited to over 50's ... we'll see what happens.

I know I wish that someone had told me 20 years ago to pay my Class II NICs, so I'd get a full UK state pension for peanuts, for example - this is the kind of thing that I think would help people as they plan the financial side of their new lives iin the UK.

Feel free to jump in with questions - or maybe post what is the #1 piece of financial advice you would give, or the #1 most helpful piece of financial information you have learned.
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Old Mar 3rd 2013, 12:20 pm
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Default Re: Money, money, money (the retirement and financial issues thread)

Originally Posted by dunroving
Several times recently, financial issues associated with moving back to the UK (or even just living in the UK) have come up and they sometimes get lost in the middle of unrelated threads.

I thought I'd start this thread, being someone who has experienced the financial positives and negatives of being an expat and moving back to the UK. I'm also trying to put together a strategic plan to either retire early or semi-retire or change career until retirement and have learned a lot from people on BE about taxes, WEP (it's a US thing to do with social security), national insurance, etc.

Other questions that come up have to do with cost of living in various areas, how to get by on little money, what the changes in UK state pension mean, etc.

So, as a little experiment I thought I'd start a thread on the topic and see how it goes. It may end up focussing on older members (because a lot of the questions seem to be about retiring, or returning at an older age with limited funds) but I don't see that it has to be limited to over 50's ... we'll see what happens.

I know I wish that someone had told me 20 years ago to pay my Class II NICs, so I'd get a full UK state pension for peanuts, for example - this is the kind of thing that I think would help people as they plan the financial side of their new lives iin the UK.

Feel free to jump in with questions - or maybe post what is the #1 piece of financial advice you would give, or the #1 most helpful piece of financial information you have learned.
The line I've highlighted got me thinking about my own kids. They are both on green cards and married to USC's. Eventually they will apply for US citizenship and I believe they will then have dual citizenship. Could they pay into Class 2 NICs even though they have never worked and may never work in the UK? I believe that if they have 30 years US SS contributions they would avoid WEP. I know floating this idea sounds a bit mercenary, but if it's an option why not go for it?
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Old Mar 3rd 2013, 12:47 pm
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Default Re: Money, money, money (the retirement and financial issues thread)

I am sure you will be aware but it is very likely that UK pensions will change significantly after April 2017 you will then require at least 35 years of NICs to get an increased payment

Just in case you are not here is a link which explains it in reasonable detail

http://www.bbc.co.uk/news/business-11619379
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Old Mar 3rd 2013, 1:02 pm
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Default Re: Money, money, money (the retirement and financial issues thread)

Originally Posted by Bud the Wiser
The line I've highlighted got me thinking about my own kids. They are both on green cards and married to USC's. Eventually they will apply for US citizenship and I believe they will then have dual citizenship. Could they pay into Class 2 NICs even though they have never worked and may never work in the UK? I believe that if they have 30 years US SS contributions they would avoid WEP. I know floating this idea sounds a bit mercenary, but if it's an option why not go for it?
I think so, as they will be eligible for an NI number - and the Class II NICs are cheap as chips so even if the pension regulations change (to 35 years, or 40 years, or whatever), it's better to pay them just in case.
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Old Mar 3rd 2013, 2:03 pm
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Default Re: Money, money, money (the retirement and financial issues thread)

Originally Posted by dunroving
I think so, as they will be eligible for an NI number - and the Class II NICs are cheap as chips so even if the pension regulations change (to 35 years, or 40 years, or whatever), it's better to pay them just in case.
That is very good to know Dunroving, thanks for pointing that out. You mention it being quite reasonable also which is helpful to know. I worked only as a student before moving to the states and I've been here twenty years, planning to go back within the next five. Does anyone happen to know who you'd contact about starting contributions?
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Old Mar 3rd 2013, 2:57 pm
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Default Re: Money, money, money (the retirement and financial issues thread)

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Old Mar 3rd 2013, 3:02 pm
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Default Re: Money, money, money (the retirement and financial issues thread)

Originally Posted by Montfan72
That is very good to know Dunroving, thanks for pointing that out. You mention it being quite reasonable also which is helpful to know. I worked only as a student before moving to the states and I've been here twenty years, planning to go back within the next five. Does anyone happen to know who you'd contact about starting contributions?
I think you contact HMRC directly - they have specialists working with international cases.

Voluntary contributions:

http://www.hmrc.gov.uk/ni/volcontr/basics.htm

Ditto for people living overseas:

http://www.hmrc.gov.uk/ni/volcontr/abroad.htm

Information on topping up missed years (can only go back 6 years):

http://www.hmrc.gov.uk/ni/volcontr/toppingup.htm
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Old Mar 3rd 2013, 3:07 pm
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Default Re: Money, money, money (the retirement and financial issues thread)

I'd be particularly interested in hearing from people coming back from overseas who have "defined contribution" pension schemes (not final salary, but schemes in which you choose which funds you invest in).

In the US this would be schemes such as a 401k and an IRA. I have a 401k and have no idea what I should be thinking about or preparing for before I start "using" the pension (buying an annuity, taking a cash lump sum).

I have read advice about "rolling over" a 401k into an IRA (or Roth IRA), but have no clue whether this is something I should do, what the advantages would be, etc. If anyone has done this (especially from the US), I'd be grateful for any experience or advice.
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Old Mar 3rd 2013, 3:28 pm
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Default Re: Money, money, money (the retirement and financial issues thread)

Originally Posted by Bud the Wiser
The line I've highlighted got me thinking about my own kids. They are both on green cards and married to USC's. Eventually they will apply for US citizenship and I believe they will then have dual citizenship. Could they pay into Class 2 NICs even though they have never worked and may never work in the UK? I believe that if they have 30 years US SS contributions they would avoid WEP. I know floating this idea sounds a bit mercenary, but if it's an option why not go for it?
If they aren't working I think they would pay class 3, bit more expensive but cheap for a retirement plan and they'll need 35 years.
I'm back paying as much as possible right now, and will pay till retirement at 67 I'll still only have 30 years paid, very disappointing.
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Old Mar 3rd 2013, 3:34 pm
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Default Re: Money, money, money (the retirement and financial issues thread)

Originally Posted by Mummy in the foothills
If they aren't working I think they would pay class 3, bit more expensive but cheap for a retirement plan and they'll need 35 years.
I'm back paying as much as possible right now, and will pay till retirement at 67 I'll still only have 30 years paid, very disappointing.
I will have 33 years paid by my retirement age of 67 - when I first returned I would have paid my 30 years by the age of 64 but then they changed the goal posts!!! I agree with dunroving - I wish I had known I could have paid Class II NIC's in all my years in the US - I would be fully paid up by now and cheaply -
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Old Mar 3rd 2013, 4:06 pm
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Default Re: Money, money, money (the retirement and financial issues thread)

I can't remember, are you 16 or 18 when you get a nic? You have to have made contributions for at least three years before you can't make voluntary contributions while abroad. I'm not sure if I qualify as I was nineteen when I left and only did piddling little summer jobs between 16-19.
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Old Mar 3rd 2013, 4:40 pm
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Default Re: Money, money, money (the retirement and financial issues thread)

Originally Posted by Montfan72
I can't remember, are you 16 or 18 when you get a nic? You have to have made contributions for at least three years before you can't make voluntary contributions while abroad. I'm not sure if I qualify as I was nineteen when I left and only did piddling little summer jobs between 16-19.
Ah, yes, I had forgotten that aspect of the rules - either 3 years contributions, or three years' residence in the UK, or something like that. Also, I am not sure if NI credits would count (at one time, you would get credits for being between 16 and 18 even if you weren't working), or if you have to have a fully paid-up year to count (as you say, if it was a temporary or part-time job record). The lower earning threshold for paying NI contributions is pretty low, though.

Expats' kids seem to get penalised in several ways (student home status for example).

I thought you could get a NI number as soon as you were eligible to work ...? So could even be before 16, I am guessing.
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Old Mar 3rd 2013, 5:37 pm
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Default Re: Money, money, money (the retirement and financial issues thread)

so Dunroving out of the 3 links you posted which one do I first? Who do I contact first? i wish I'd known about it long time ago. After 29 years in US would nearly be paid up but better late than never..
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Old Mar 3rd 2013, 5:41 pm
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Default Re: Money, money, money (the retirement and financial issues thread)

Originally Posted by Montfan72
I can't remember, are you 16 or 18 when you get a nic? You have to have made contributions for at least three years before you can't make voluntary contributions while abroad. I'm not sure if I qualify as I was nineteen when I left and only did piddling little summer jobs between 16-19.

I don't know if you qualify or not, but I would request a pension forecast from HMRC. That way you will know where you stand
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Old Mar 3rd 2013, 5:53 pm
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Default Re: Money, money, money (the retirement and financial issues thread)

Originally Posted by fulwood
so Dunroving out of the 3 links you posted which one do I first? Who do I contact first? i wish I'd known about it long time ago. After 29 years in US would nearly be paid up but better late than never..
fulwood, the first step is to get a UK pension forecast, here is a link http://www.hmrc.gov.uk/nonresidents/...e_abroad.shtml

Even if you don't have you NI number, HMRC will be able to track down your records and NI No. and they will tell you how much you can pay in arrears and also going forward.

I am assuming you are based outside of the UK, so apologies if I have that wrong.
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