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Do you lose all the money paid in NI (from UK)

Do you lose all the money paid in NI (from UK)

Old Jan 23rd 2018, 4:28 pm
  #31  
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Default Re: Do you lose all the money paid in NI (from UK)

Originally Posted by Cyan View Post
I had a quick scan of the PDF. Looks like they prefer a UK bank account to do direct debits of any top-up payments. Did not explicitly say anything about one-off credit card payments, but they do talk about "paying direct".

Instructions for paying via a non-UK bank:
https://www.gov.uk/pay-class-2-natio...e/bank-details
Scroll down to "overseas payments"
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Old Jan 23rd 2018, 5:32 pm
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Default Re: Do you lose all the money paid in NI (from UK)

Anyway why I cannot work out is how to start paying the extra. I rang someone from HMRC (I think as directed by DWP) but they couldn't give me the right info. So I gave up and it just stayed on my "to do" list. How do I go about registering to pay the contributions I need?

Thank you![/QUOTE]
Actually since the HMRC Pensions office is in Longbenton, Newcastle you have to be able to speak and understand Geordie. Whatever they ask you just say "Whey aye man".
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Old Jan 25th 2018, 1:48 pm
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Default Re: Do you lose all the money paid in NI (from UK)

Originally Posted by Paul_Shepherd View Post
[QUOTË=Pulaski;12424729]Once you retire. Up to then you can make additional contributions.

Under certain circumstances payments can be made than go back more than the usual six years of arrears. This happened when they bumped up the requirement from 30 to 35 years to get a full pension. If you had been already contributing in recent years, but we're short of years people were allowed to buy additional years going further back than six years.


OK, so I contributed for around 21 years before I left the UK, and the last time I contributed is coming up to 9 years ago (would that be an issue now its gone past the 6 year mark)

So.... if I understand this correctly I would need to contribute 14 more years to bump it up the a full pension? and I would have up until the age of 67 (I think that is UK state retirement for men now) to contribute those 14 years worth of contributions? (Im 47 now)
Originally Posted by Kentonmag View Post
Anyway why I cannot work out is how to start paying the extra. I rang someone from HMRC (I think as directed by DWP) but they couldn't give me the right info. So I gave up and it just stayed on my "to do" list. How do I go about registering to pay the contributions I need?

Thank you![/QUOTË]
Actually since the HMRC Pensions office is in Longbenton, Newcastle you have to be able to speak and understand Geordie. Whatever they ask you just say "Whey aye man".
The quotes, people, the quotes!

When you quote someone please ensure that you retain the quote tags, the [quotë=AcmeMan] and [/quotë] (without the umlauts) that wrap the quoted text, otherwise your post ends up a jumbled mess!

Last edited by Pulaski; Jan 25th 2018 at 1:51 pm.
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Old Jan 25th 2018, 4:25 pm
  #34  
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Default Re: Do you lose all the money paid in NI (from UK)

so.. what happens if you dont pay extra. I paid in for 19 years. I dont want to pay in any more. Can I just draw on it when I hit whatever the age is meant to be now (67?)
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Old Jan 25th 2018, 4:30 pm
  #35  
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Default Re: Do you lose all the money paid in NI (from UK)

Originally Posted by Howefamily View Post
so.. what happens if you dont pay extra. I paid in for 19 years. I dont want to pay in any more. Can I just draw on it when I hit whatever the age is meant to be now (67?)
Yes.
Get a pension forecast to see what you'll likely get when the time comes.
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Old Jan 25th 2018, 5:12 pm
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Default Re: Do you lose all the money paid in NI (from UK)

Originally Posted by Howefamily View Post
so.. what happens if you dont pay extra. I paid in for 19 years. I dont want to pay in any more. Can I just draw on it when I hit whatever the age is meant to be now (67?)
When you may be eligible (Class 2)* to pay in extra years for about £145, why wouldn't you want to pay in more? You only have to draw your pension for 6 months to get back all the extra money you paid in.

* If you're not eligible for Class 2, then the payback period for Class 3 contributions is three years, which is still a "great deal".
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Old Jan 25th 2018, 5:54 pm
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Default Re: Do you lose all the money paid in NI (from UK)

Originally Posted by Pulaski View Post
When you may be eligible (Class 2)* to pay in extra years for about £145, why wouldn't you want to pay in more? You only have to draw your pension for 6 months to get back all the extra money you paid in.

* If you're not eligible for Class 2, then the payback period for Class 3 contributions is three years, which is still a "great deal".
A good summing up.

Of course, one needs to have the money to do it or not have something that the money is better spent on - although taking a cash advance on a credit card and paying at minimum rate might even be worth it for the lower rate.

I'm still amazed that I can pay the lower rate. Nothing I have read suggests it but they have officially confirmed it. So far I have paid one year of three short.

Couple of other things to consider - does one have a health condition that might make it less likely to get the money back? Depending how old you are, that three years to get it back might not happen until you're 70.

Another factor is your likely income in retirement. Will you have much of a Canadian sourced pension? I have my UK civil service pension which is not the gold plated sum people think. It was also reduced from an already low amount because I retired early.

I won't get CPP but I will get OAS (based on Canadian residency) and potentially GIS too. I've not done a full projection yet but my understanding is there's a 50c in the $ clawback of anything my income increases by.

So any missing years I pay for, I would only gain half, thus taking longer for the payback.
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Old Jan 25th 2018, 7:15 pm
  #38  
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Default Re: Do you lose all the money paid in NI (from UK)

So will I get a stat pension from what I have paid in already? Or is paying extra going to have to happen to get anything back?
Heres my issue - I dont trust what may or may not happen over the next 20 years, I do know however that I will be savage if I pay in more now to get nothing back from it, or to put it another way no real difference in the stat pension.
Also, we are paying substantial amounts into RRPs here.
I dont really want to send any cash to the UK
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Old Jan 25th 2018, 7:27 pm
  #39  
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Default Re: Do you lose all the money paid in NI (from UK)

Fair enough. That's your choice.

But the consensus is that Class 2 contributions are a steal in terms of the payback on investment (even if you only live long enough to get a year's worth out of it).

Also keep in mind that any further moving the goalposts wrt NICs and pensions ages will be something that'd impact the entire UK population, and not just us expats that can make the most of a nice little loophole that's about to end... the potential political fallout of any more tinkering around could be significant. While none of us have a crystal ball, I'd guess any further tweaking would be further up the demographic, so to speak.

BTW, Class 2 NICs are gone come next tax year - but you've got a couple of years to do something about it (IIRC). Nothing to be lost from getting a pension forecast and running the numbers and see what it gets you (at today's figures - remember index-linking will occur until you start to draw your pension, assuming you're still in Canada - if you end up somewhere else as you reach retirement age, index-linking may well still continue - Canada's something of an anomaly in that regard, and annoyingly there seems to be little prospect of this being rectified).
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Old Jan 25th 2018, 8:58 pm
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Default Re: Do you lose all the money paid in NI (from UK)

Originally Posted by Howefamily View Post
So will I get a stat pension from what I have paid in already? Or is paying extra going to have to happen to get anything back?
Heres my issue - I dont trust what may or may not happen over the next 20 years, I do know however that I will be savage if I pay in more now to get nothing back from it, or to put it another way no real difference in the stat pension.
Also, we are paying substantial amounts into RRPs here.
I dont really want to send any cash to the UK
You paid in 19 years, so you'll get 19/35 of the full rate as it will be then.

When I left in 2004 I had 32 years in and 40 were needed for full retirement pension (RP) so I'd have got 32/40. Then it changed to 30 so I'd have got the full whack.
But then it changed again to 35 so for me it became 32/35 (albeit the amount increased so 32/35 was likely to be more than the full lower amount if you see what I mean.

So that was two changes announced in a little over 10 years. So maybe another change in a few years is possible. But whatever that change is, you'd get 19 out of how many were then needed as a result of a change. Plus any extra you pay. It would have to be a pretty radical change - the sort of thing that's never happened - for you to lose anything you pay extra.

Anyway, just to give an example, my pension forecast identified three missing years, equivalent to £30 a week on current figures.

As they said I qualified for the class 2 rate that meant for about £450 I could make up those three years and my RP would increase by £30 a week. So £450 qualifies me an extra £1560 per year from age 67. So get it back within 4 months and it's all gain thereafter.
As I say, I don't understand why they said I could pay the lower rate which appears to be linked in to self employment, but even at the higher rate I'd have started "making a profit" in the second year.

That's the kind of deal you can get and helps make up for the freezing that happens to the RP in Canada. It really is worth getting the Pension Forecast.
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Old Jan 25th 2018, 10:38 pm
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Default Re: Do you lose all the money paid in NI (from UK)

Just in case there are any women born in the 1950s who are expecting to get their state pension at age 62, you won't. The government moved the goalposts and omitted to tell many and those that did know didn't have time to make any other provision. I've oected to get mine at 62 but am now going to have to wait until I'm almost 66. Plus previous forecasts said I would get a full pension but the new state pension payment is reduced if you had previously opted out of some payments. This affects government employees.
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Old Jan 25th 2018, 10:47 pm
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Default Re: Do you lose all the money paid in NI (from UK)

Originally Posted by Howefamily View Post
So will I get a stat pension from what I have paid in already? Or is paying extra going to have to happen to get anything back?
Heres my issue - I dont trust what may or may not happen over the next 20 years, I do know however that I will be savage if I pay in more now to get nothing back from it, or to put it another way no real difference in the stat pension.
Also, we are paying substantial amounts into RRPs here.
I dont really want to send any cash to the UK
A few years ago I used to think the same way, and I was sceptical that I would be eligible for a status pension (and unfortunately therefore missed out on a few years of Class 2 contributions ) but there has been a renewed commitment to the state pension, and so under the current terms I will be eligible for it.

So my thought process is as follows:

● If my career goes belly up, and I end up in poverty I am pretty certain I would get a state pension, and if life was that bad I would likely return to the UK, if only because of the cost of healthcare in the US, and in the UK I would definitely get paid my pension. So I would be very glad to have made the modest additional contributions.

● But if life continues to be good for me, and I retire with good savings and investments, enough to fund a comfortable retirement, and, in the worst case scenario, the British government makes the state pension means tested and I get nothing, then all it has cost me is around £143-£145/ year, which is less than we spend on an occasional treat or birthday meal at a posh restaurant. The decision was pretty much a no-brainer at that point.

So for you, I ask, why wouldn't you make a one-off investment of very slightly over £1,000 (current plus six years arrears of Class 2 contributions) to buy a pension increase of £2,000/yr for life? At average life expectancy you're looking at a return of well over £20,000 for a £1,000 investment! .... But if you know about any other pension or investment opportunities that are even half that good, I would very much like to hear about them!

Originally Posted by bats View Post
.... the new state pension payment is reduced if you had previously opted out of some payments. ......
But the opt-out was to fund a private pension. I was opted out for a few years, but part of my private pension funds reflect the debated money from the time when I was opted out, so it's not like the pension reduction was stolen from us!

Last edited by Pulaski; Jan 25th 2018 at 11:08 pm.
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Old Jan 25th 2018, 10:59 pm
  #43  
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Default Re: Do you lose all the money paid in NI (from UK)

Pulaski is right you can do it the old school way by calling Newcastle. In my experience they are very helpful. Also you can check contributions etc by registering here:

Government Gateway - Home

You will need NIN and passport details. to confirm.

The following link explains how to pay online via International or UK bank:

https://www.gov.uk/pay-class-2-natio...e/bank-details

Last edited by vikingsail; Jan 25th 2018 at 11:01 pm.
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Old Jan 25th 2018, 11:13 pm
  #44  
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Default Re: Do you lose all the money paid in NI (from UK)

Originally Posted by vikingsail View Post
...Also you can check contributions etc by registering here:

Government Gateway - Home

You will need NIN and passport details. to confirm....
Oh yes...forgot that.
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Old Jan 26th 2018, 12:25 am
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Default Re: Do you lose all the money paid in NI (from UK)

Originally Posted by Pulaski View Post

But the opt-out was to fund a private pension. I was opted out for a few years, but part of my private pension funds reflect the debated money from the time when I was opted out, so it's not like the pension reduction was stolen from us!
Yep, but in every NHS job I had we were advised to opt out. Previously this hadn't made a difference to your state pension so the sudden introduction is unfair especially when those previous pension estimates are way out.
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