holmes5668

I have been paying CPC in Canada for five years (since I got here). I have not paid national insurance in the UK since 1999 (I paid from 1984 to 1999). I am thinking of playing catch up and paying as many years back NI as I can and then start paying it yearly again from now.

Is it ok to pay pension contributions in Canada and UK at the same time? Will I end up with both pensions when I retire? Is it worthwhile doing this?

I don't really have any intention of returning to the UK. I am 40, my wife is Canadian. We'll probably end up living in South East Asia eventually.

Thanks in advance.

iaink

There is nothing prohibiting it, but...

Any UK state pension wont be index linked once they start to pay it out if you remain in Canada. As you dont know where you will end up, I think (but dont know) you would be better off putting the money in a more flexible private investment scheme.

Are you maxing out you canadian RRSP contributions at present? That would be the first thing to do I guess.

Almost Canadian

What he said.

I can't understand why anyone would want to "make up" their contributions in the UK unless they were very close to retirement. Who's to say the UK State Pension will even be around when the vast majority of us are eligible to claim it ? Aged 65, 70, 75 .....

Novocastrian

Thirded! The CPP and/or the UK pension plan won't pay for pocket money. Why bother? If you don't have a decent professional pension, you're screwed either way.

Steve_P

Fourthed, if that's a word.

Maximim CPP monthly payment at aged 65 for this current year (2008) $884.58 or $10,614.96 per year. I don't know too many people who can live on this nowadays.

Although to me at least it's a bit better than pocket money and I don't get the full amount as I took my CPP when I turned 60.

Novocastrian

It's just as much a word as thirded.

shaku07

Please check all information I write here.
You can pay 5 years back towards your NI
In 2012 you'll only need 30 and not the current 44 years to claim a full pension.
The current UK pension is 89 pounds a week (?)
ccp numbers have been stated in another post.

shaku07

Check all this.
CCP $10614
UK pension (not indexed linked) $8586
OAP canada $5820
And there is a Income suppliment if your numbers don't add up to ? . There is a chart on line. Hopefully you won't need GIS.

holmes5668

Thanks. Not sure what to think now.

Shaku has mirrored the information I got on another forum. All the posts there say it is a good idea to keep paying NI, which is counter to what I am getting here.

I think I have paid in 15 years of NI contributions and if I pay in the backdated years I'll only have 10 years to pay (assuming it is now 30 years) and it doesn't sound like the payments are much.

I also paid into a good company pension from 84 to 96. Since 96 savings and pensions have been sadly lacking. I am in the middle of a career change which should get me going in the right financial direction again, but I guess I am, in part, trying to make up for the last few years (even if it is only in a small way). I am 39 right now.

I will probably only pay into the CPP for a max of eight years as we are planning on moving to Asia in three or four years time.

More comments appeciated for or against.

I am currently in the middle of exams, so will endevour to look into this further in the coming weeks.

Thanks

MrsDV

I'm currently considering doing the same thing. I haven't paid NI for 5 years but thinking of playing catch up the paying yearly contibutions thereafter (class D / 3 ?), even though I am very unlikely to live or work on the UK in the foreseable future. I recently read an article in an expat magazine (Nexus) in which a financial analyst suggested it was a good thing to do. Not suggesting you rely on it as your sole earnings for retirement, but as part of an investment portfolio it gives reasonable return for low risk.

Hubby mentioned it to a financial advisor (in the UK) while discussing some other invesments and he's going to get back to us with his thoughts - Individual circumstances are different but I'll let you know what he says.

holmes5668

Thanks. Yes I would be interested to know what he says.

No, obviously I wouldn't want that to be my only pension (god forbid), but from where I'm sitting now, with 15 years of payments already in it seems like a good idea to continue.

More comments encouraged.

Thanks

JonboyE

I agree. If you assume you are going to live to a ripe old age it is a reasonable to good investment. Even Gordon Brown can't bankrupt the UK!

Corky

My OH did this for many years, it started out that it was $700.00 he was paying then went up gradually until it was close to $1500. He is recieving it now, it isn't indexed, and with the exchange rate we are now losing about $50. a month sometimes less. It was great a few years ago when the exchange rate was better. We think now that if we had done something else with the money we may of had a better return on it by now. Who knows...In applying for the Brit pension, they discovered that he had a small pension coming from Germany for the 12 years he worked there. It is so small they only pay it 4 times a year, but every year they give him a raise!

shaku07

Hi, not much new to add.
The state UK pension is 90.70 pounds.
You need 30 years for a full pension as of 2010 (not 2012)

Every year now counts. If you have paid in 1 year that is 1/30th pension. So 15 years is already 50%.
I had about the same number of years when I left the UK. Glad I paid in. I only would have recieved 73% if the old rule of 44 years had applied.
One think to add to the mix here. Between 2012 and 2015 UK pensions will be linked to avarage earnings and not inflation. So not only will you get a 100% pension if you pay the 5 years back + 10 the pension you recieve may take a huge leap before you retire.

shaku07

One more point.
When you retire, if you visit the UK you'll get the full indexed pension as long as you are there. This includes holiday stays. I'm guessing that this may include indexed linked countries too.