Re: NI contributions and catch up
 

You are credited with years but the money is not being set aside for you specifically - it is paying for current pensioners.

It's probably well worth paying the voluntary contributions, I agree. They seem incredibly cheap.

Re: NI contributions and catch up
 

No, what the government will say is that the "small percentage of fat cats" on over double the State pension should not continue to hoover it up whilst other pensioners have so little - they will sell it as "giving more to needy pensioners and not paying state pensions to millionaires".

I think if someone has done little in the way of private pensions, then paying voluntary NI contributions is probably quite sensible, it might not be sensible however for those who have invested in private pensions as there could be future means-testing.

Re: NI contributions and catch up
 

I doubt it could be applied legally to the proportion of one's pension derived from past contributions. I guess it's possible that a government could make such an edict for future contributions. So I disagree with your advice.

Re: NI contributions and catch up
 

For those discussing means testing of pension income, it is worth pointing out that for tax purposes, HMRC has been means testing pension income for years. It is about to end, since the pensioners additional tax free allowance for those over 65 is being discontinued.

For those earning, or who have been earning, more than (est., depending on year) £28,000 a year in pension income, the discontinuation of the pensioners additional tax free allowance will make no difference since they were not entitled to it in the past.

Re: NI contributions and catch up
 

At the risk of flogging a dead horse ....
It still seems to me that paying voluntary NICs would be sensible for such a person, because they are such an unbelievably good investment! And, if there is a risk, all investments (including all retirement savings) have significant risk.

Re: NI contributions and catch up
 

Actually, the new increased one-size-fits-all tax allowance isn't that different than the current tax allowance for over-65's so there isn't really much change there.

Re: NI contributions and catch up
 

I know what you mean, no matter how dead it looks or how hard you flog it, it still keeps getting up again.

But to use another horse metaphor, you can lead a horse to water ... if people don't want to pay Class II's, I don't know why we keep trying to persuade them. It's their funeral.

Re: NI contributions and catch up
 

Ahhhhh,.....yessss,......correct,.....:(

From the way your comment is worded, could I assume you are the PR person for the current government on pension reform?

Re: NI contributions and catch up
 

Agreed. I'm not going to say another word on the subject.

Re: NI contributions and catch up
 

You could, but you know what happens when you assume ...

Re: NI contributions and catch up
 

Hi everyone,

I am reviving this thread in the hope that somebody may be able to answer a question.

Set-up: I started my working life in the UK as an employee and paid NI contributions for eight years before moving to Germany. I have since been working continuously in Germany for over twenty years (also as an employee). For the first four years in Germany I paid voluntary class 2 NI contributions to protect my UK pension until I was advised that this was unnecessary because I was paying contributions in another EU-country system and that the contributions from both countries would be taken into account when it comes to calculating my state pension. Ergo, overlapping years (i.e. contributions to both systems simultaneously) are a waste of time (so I was told).

However, I have recently been informed that this is not the case and that both countries will calculate separate pensions.

I have spoken to the pensions people in Newcastle and scoured the internet but cannot find the information I seek.

My question is this: is there anything to be gained (state pension-wise) from paying voluntary class 2 NI contributions while I am an employee in another EU country?

Any clear advice or links with clear information will be appreciated. Thanks in advance!

Re: NI contributions and catch up
 

I'm not sure about Germany, but if you contribute to both US and UK systems you will get pensions from both countries (as you mention in your post). The US does have a law that reduces the value of the US pension if you have a pension from earnings in another country, but that doesn't apply for voluntary contributions.

Re: NI contributions and catch up
 

This page on the HMRC site seems to indicate that although you pay social security contributions in Germany, they do not entitle you to a UK state pension; also (scroll down the page) that you are entitled to make voluntary contributions to improve your UK state pension.

The first thing for you to do is get a national insurance statement. I think it will indicate how much you can pay to catch up. Then you should arrange to pay voluntary contributions for the remainder of your working years or until you have the 35 years for a full pension.

Re: NI contributions and catch up
 

Thanks Nun and Editha for your replies. I appreciate your trouble and rapid replies.

The pensions agency told me that the UK pensions forecast only takes UK contributions into consideration and would not really answer my question.

There are special calculating rules which apply to pension contributions paid in more than one EU country (based on one of the pillars of the EU: free movement of workers and all that jazz). For example: contributions from one EU-country can be used to make up a shortfall in another EU-country.

Here is a link which details how all this works.

EU - Pension claims and calculation of EU pensions-Your Europe

I have been continuously employed in the EU since beginning my working life. Technically, I do not have a gap in my EU-NI record. Hence my specific question remains. Is there anything to be gained by voluntary top-up contributions within the EU?

Re: NI contributions and catch up
 

My understanding is that you'll get pensions from Germany and the UK on the basis of your contributions. There isn't a specific bilateral social security agreement like with the USA and anyway that only allows you to use contributions made in one country to qualify for benefits in the other, it's not used to calculate the amount of those benefits. Reading the examples in the link you sent it looks like the situation is similar between the various EU countries. So if you qualify for Class 2 voluntary NI I would pay it to add to your UK NI record. I think you got some bad advice in the past.

You should get a pension from Germany when you reach their qualifying age based on your employment there. Then you can apply to the UK for a pension too. If you don't have an NI record sufficient to qualify for a UK pension your German employment will be considered to make you eligible and the UK pension calculated on you low UK work record. So if you can get more NI credits that would be a good thing.