Paul_Shepherd

Ive heard various stories about this, and have looked at various search results but i am still not clear.

So....I hear that you can continue to contribute to your UK state pension whilst living overseas to keep it "current" for want of a better word.

If you haven't done this and have been living outside the UK for some time is there a time limit that you can still do this?

I have lived in Canada for 7 and half years and have had no contact with the UK governmental affairs like the state pension or NI contributions. The only thing i have done is an annual tax return to the HMRC on a property rental which i owe nothing on anyway.

Sorry for the vaugeness, im not sure of the questions to ask, i dont really understand the system and have probably not done myself any favours by burying my head in the sand whilst living here in Canada.

I never intended to return to the UK, but certain circumstances have changed where unfortunately i cant rule that out now, just trying to get a better understanding of the system when you have lived overseas for some time.

Thanks,

Paul.

christmasoompa

You can pay for up to the last 6 years I believe.

For most it's worth doing anyway, even if you don't intend to return to the UK (as you can claim it from Canada too), and it's a fairly small amount to contribute, £2.80 per week at the moment.

https://www.gov.uk/voluntary-nationa...-contributions

You can find out how many years you've got towards a full pension, to work out how many more you'd need to get it, and if it's worth it. I'm assuming you can apply online for that from Canada, but hopefully others that have done it can advise. https://www.gov.uk/check-national-insurance-record

HTH.

Pulaski

Yes you can, it's very easy. Just call the DWP international unit in Newcastle and they'll walk you through it - you need to apply, which means being sent a paper form to complete. Be sure to try to qualify for Class 2 contributions - if you haven't paid anything in 7+ years you should be eligible to pay the current year, plus six years in arrears, or just about £1,000 at the Class 2 rate. Be sure to get a move on well ahead of the end of March 2017, or the calendar will roll forward and you'll lose a year of cheapo Class 2 contributions.

Class 2 goes away in 2018, with Class 3 likely to cost around £715/yr, which is still a very good deal.

You need to accumulate 35 years of actual, deemed, or voluntary contributions for a "full" pension.

BristolUK

It crops up a bit on MBTTUK. I think there's a recent thread there with your answers.

Davita

Everyone has given good advice and the information available from UK Pensions is fairly easy to navigate.
Three thing to consider.....
1. How many years you contributed before moving from UK and how much more you will contribute to age 65.
2. How much you may get in return after 65 (or even later) if still living in Canada and the UK Gov't insists on not indexing for inflation.
3. If contemplating a return to UK, at any time, it is a good investment.

Those sums will determine if you should continue with the UK OAP or forget those past contributions and use future funds to create another private pension plan or some other investment with better benefits.

For example...I had already contributed for some 20 years before working overseas and, like you are thinking of doing, I subsequently bought back the 10 years then permitted. I immigrated to Canada, as a retiree, when age 55 and continued volunteer contributions to UK NI till age 65.
I now receive a reduced pension of around 95% and it has been frozen from inflation because I live in Canada.
I'm now almost 80 and probably only just getting back more than what I paid.

Fortunately I have other investments so not claiming poverty but, to get your best bang for your buck (or £), you need to do your sums..... 'as my teacher used to say whilst whacking my hands with her leather strap'...

Pulaski

If you're comparing the total of around 40 years of contributions then you might be looking at the numbers from the wrong perspective. The question should be asked in two parts: what can you expect if you don't make any further contributions? and how much can that be increased if you make further contributions?

The first question is "interesting", but can't be changed, it is what it is. The answer to the second question will help you decide whether to make additional contributions. Certainly making Class 3 contributions at £715/yr is a lot less advantageous than making Class 2 contributions at less than £145/yr, and lack of indexation is a further negative, though less so in the very low inflation environment we are currently in.

Another consideration is the importance of having another independent source of income, not tied to an investment manager or the stock market - that has a positive value too, though not one that it is easy to put a number on.

BristolUK

Succinct.

It's hard to imagine the lack of indexing has much relevance when it comes to missing years though. I mean, what you've already paid in you can't do anything about so we're only talking top up rather than the bulk of it.

I suppose it varies as to how much is missing but according to the information I've received I have 32 years so I'm 3 short of the 35 years and my pension forecast is £30 less than the full RP.

So you can pretty much say that each year I buy will get an extra £10 a week or £520 a year.

I don't think £520 for each year I live beyond pension age in return for a single payment of £145 will ever lose value due to it not being uprated.

Even £700 will be recovered after 18 months of the extra £520 pa.

The gains will more than cancel out a lack of index linking.

NB...this is based on my shortfall of £30 for three years. I'm sure it's not as simple as £10 a week difference for each missing year for everyone.

Pulaski

That's a nice example, but I suspect the conclusion is fairly typical, that buying extra years, even at £715, is such a good deal that it is hard to ignore, and that the payback period (number of years you need to claim to recoup your investment) for most people is very few.

BristolUK

If at all.

Especially when the DWP sends its death squads out with the claim packs.

Tangram

If you have say 20 years contributions and haven't added in since emigrating :
1. When (if) can you start claiming ?
2. Is it pro rated downwards ( in this example 50% ) or is it all or nothing ?

JonboyE

When you are age 66.

Assuming you were born after 6 April 1951 you will get 20/35ths of whatever the full state pension is when you claim it. The full state pension is currently around £155 per week.

Tangram

Thanks Jon

Tangram

For the Class 3, is there a way of telling how much the minimum per year is to grab an each extra year ?

Paul_Shepherd

Thankyou all for you replies and information, as i said my intention was never to return to the UK, but sometimes curve balls are thrown your way, and they may not give you a choice.

Im not too worried about getting back what ive paid in - ie if i live until 90, i dont think ill be around then anyway, however i would like to get the maximum amount possible when i hit 65, i think ill still be working anyway, as i know i am not contributing what i should to a private pension now, but every little helps, and if I can pay a little extra now that will effect me favourably when im 65, ie getting 95% of a full pension instead of say 50% then i want to do it. Im just concerned i may have let this laspse for too long.

I have contributed from the age of 17 up until 38 so thats 21 years, then i left to live in Canada, i have been here 7 and half years now, and i read somewhere that the magic number where you can still contribute is either 6 or 8 year after your last contribution.

Im going to contact this DWP place in Newcastle that Pulaski has suggested and take it from there.

Thanks again for everyone's input.

Paul.

morpeth

I wonder is it easy to switch from Class 2 to Class 3 or vice versa, or does it matter if in 2018 Class 2 goes away?

So the $716 buys you one year ? I did the calculation of paying that for 7 years, adding the years I already have- and the investment return is very good when I take years/35 times the 155 per week.