Engineer_abroad

Hi all,

Can I apply to pay Class 2 NI contributions whilst in Canada (to ensure I am meeting the requirement for state pension).

The government website seems to suggest yes, but the N138 booklet suggest if you are living in a country with a reciprocal agreement on social security the rules don't apply to you. Is this just for compulsory Class 1 contributions.

Cheers

AlliF

Hubby has been paying class 2 NI contributions whilst in Australia and since we got to Canada with no issues.

JonboyE

Yes.

Aviator

Is it worth doing this?

JonboyE

There is a clause in the Canada / UK social security treaty that says any year you are covered by UK NI does not count as a year towards OAS in Canada. Everyone I have spoken to about this says it is ignored in practice but the idea of paying for a pension that does not increase with inflation, and giving up a free one that does, concerns me.

If it is true that this clause is ignored, and continues to be ignored, then I think paying voluntary class 2 contributions make sense if you do not have a complete NI record (I think this is 35 years now). Especially so if you are likely to go back to the UK before accumulating the 20 years residence needed to draw OAS overseas.

Even if you do not, Class 2 NI contributions costs £145.60 a year and in return you get 1/35 of the UK state pension. With the new State Pension set to be £155 per week 1/35 is £4.45 or £231.40 a year. There is the time factor of money to consider but if your NI record is less than 35 years it makes sense to buy back up to six years shortly before you reach retirement age. You will recover your investment within the first year.

Snowy560

Hi just to add to this: I think you can top up beyond 35 years up to a maximum amount of pension.

I asked for a pension forecast a few months and posted on another thread (not in the Canada section) about my subsequent conversation with the pensions department. Some of this may be relevant to you or may not be but I repeat it anyway:

As you know, the UK is transitioning over to a new pension system
Transitional people (of which I am one) are calculated as per both old style and new pension and are always given the higher of the two calculations.
I asked if I could pay "top up" contributions
I was told to contact them post April 2016 when the new pension will be in play and they will better know the amounts of the top up contributions. They will also put me through to an advisor at that point who can assist with whether or not to do this (or if I can do this).
There is a max pension amount under the new rules
You can top up up to that amount but not beyond it.

Then I wrote:
Apparently I have 34 years of contributions
But also (apparently) the max number of years I can have under the new rules is another 7 qualifying years
Once again (apparently) I only need to make voluntary contributions for an additional 4 years (out of a possible 7) to get to the max pension I can.
(the advisor I spoke to was very good: the call centre assistant put me through to her and she patiently tried to explain it all to me. You can probably guess I still don't completely understand).

I realise some of what I've written above may not apply if you are in a different age group etc. to me. It's a bit of a cut and paste job from the other thread, but I hope it helps a bit, rather than confuses! Essentially, I'd suggest requesting a pension forecast, then when you get it, calling them to discuss, asking to be put through to one of the advisors.

S

PS: Jonboy: I just checked and the advisor told me the max pension would be GBP151 (I know it's only GBP4 different from what you wrote, but ... who knows ?!).

JonboyE

I took it from here ...https://www.gov.uk/new-state-pension/overview

Snowy560

Thank you, JB.

I do think it's worth requesting a pension forecast to start with, then after you've read it, you will probably need clarification on some aspects, so then you should call them up. However, from what I could gather, because of the new pension system that's coming in, they will be better able to advise on top ups/extra contributions from April (when I suspect everyone will be calling them so I'd request the forecast sooner rather than later).

S

BristolUK

I just made a couple of discoveries. It may not be important for everybody but as things stand right now, I'll qualify for my UK pension at age 66 but OAS would kick in at 65.

In the event my reduced civil service pension meant I would get GIS as well I wondered how that might change GIS a year later when RP was due.

Apparently 50% of other income comes off GIS, so it would be worth gaining my UK RP.

But what I discovered while checking is that OAS is payable (subject to income and being in Canada 10 years minimum) at age 60 to a widower (or survivor as it's called in Canada) without having to wait until 65.

That was a surprise.

Useful for some to know perhaps?

Engineer_abroad

Thanks everyone for the info, seems a little bit more of an issue than I thought. I'm only 31 so no where near retirement (the depressing thing is I have longer to work till I retire than I have been alive).

may not even be a state pension by the time I retire but for the 2.80 a week it seems worth keeping up with.