meinkl

I know that I dont quite have enough years of NI cntributions to fulfil the required 30 years, so am trying to top up the remaining few years.
I have heard that it is better to pay any top-up whilst living abroad, rather than wait until returning to UK.
Is this true? Are the voluntary payments made whilst overseas cheaper?

Editha

I remember you saying you are 60. Is that right? If so, you will get your pension under the new system and will need 35 years contributions to get the full pension.

Editha

For example, a man born on 1st October 1955 will reach his pension age on 1st Oct 2021, when he is 66, and he will get the 'new pension' requiring 35 years contributions.

There is a calculator here.

meinkl

Thanks. I previously used the calculator to find out that i was born 10 days too late and reach "pension age" on 17 April 2021 at 66.
However I assumed that my required NI contributions were 30 years and thus aimed to top up to that requirement voluntarily.

However the gov site states:
You’ll usually need to have 10 qualifying years on your National Insurance record to get any new State Pension.
= this i have already

You may get less than the new full State Pension if you were contracted out before 6 April 2016.
= i was contrated out during some of my years of contributing whilst working in the UK

You may get more than the new full State Pension if you have over a certain amount of Additional State Pension.
= cant work this one out!?

You’ll need 35 qualifying years to get the new full State Pension if you don’t have a National Insurance record before 6 April 2016. = I DO have NI record from 1973 to 1995, so assume this doesnt count.

Therefore i cant calculate how many years i will need to get full pension.. it has to be more than 10, but doesnt state whether it should be 30 as before or 35 as it states for those WITHOUT NI history.
But my main question was; where to pay these additional years?? i was told that it is cheaper to pay then whilst overseas as they are cheaper class C.
Obviously i want to pay up the right amount at the cheaper rate.

Editha

You need to get a State Pension Statement (also known as a pension forecast).

I think (I'm not sure) that the forecast will also indicate how you can make further contributions and how many.

While overseas you can pay voluntary class 3 NI contributions which are the lowest rate. But you can also pay them in the UK depending on your status. See this page.

Generally, you can only pay 6 years arrears. But the transitional arrangements for the new pension system are horrendously complicated and you really need the pension forecast to know where you stand.

meinkl

Just sent off for it - can only do it by post... let's see what the computer in Newcastle says... ... will let you know in about 4++ weeks cos it takes that long for a 1st class stamped letter to get here.

Am stuffed if it IS now 35 years, as i only paid based on getting near to 30 in the kitty, assuming i would top up by work or voluntary, nearer to pension day.
If 35 then i will need more than i can pay.

When you start playing a game you really dont expect the goal posts to be moved, let alone picked up and taken out of the ground and into the car park!!
Pity state pension contributions are not a "contract to supply", otherwise some bright (rich) spark might take then to court.

Pythagoras

It was 2011 when I last obtained a pension statement, from HMRC. Then, I was told I had the required 30 years contributions - entitling me to a full state pension.

Like Meinkl, I haven’t got 35 years of contribution either – and have now retired.

There was a 2014 article in the Guardian which looked at the government’s offer for people to buy extra state pension. Not saying it may not have been 'overtaken by events', but the advice there that an ISA might be a better option seems worth thinking about. (Although that presupposes you can supply a 'permanent' UK address I guess)

Who can say that in 2018 or 2019, government may not change the rules again and say you must now have 40 years contributions?

Editha

The 'new' pension is higher than the old, and you will get what you would have got under the old, so you don't lose.

Editha

But, if you have now retired, you were never entitled to the 'new' pension anyway.

On the pension top-up, which you may be entitled to (aka Class 3A), deferring your state pension will almost certainly produce a better return than buying Class 3A.

Pythagoras

Nowhere in my post did I maintain what I might have been entitled to, but the link for the state pension statement is useful - so I will see what info that gives me.

Pulaski

You mean "Class 2" is the lowest (approx £144/yr) and can be paid subject to application and approval while you're overseas.

Or at least that has been possible, but is supposedly being discontinued, presumably in favour of the much more expensive Class 3 (approx £730/yr). Class 2 contributions are still possible this year (2015), but I haven't heard when the last year for Class 2 will be.
That is absolutely possible, and my own pension planning allows for that possibility. ..... That said I doubt it is possible to increase the number of required years faster than the calendar moves. In other words, I don't think they can increase the number of paid up years from 35 to 40 any sooner than five years after it went from 30 to 35, so I don't think it is possible until 2020.

Editha

Yes, sorry, Class 2.

Editha

Pythagoras, it is not clear to me whether you have reached state pension age or not. If you are going to ask for a pension statement, then presumably you are not already claiming, and have not reached state pension age.

Whatever your situation is, I'm sure you will find the pension statement useful.

Pythagoras

You are correct.

I haven’t reached state retirement age – probably not so many UK organisations now allow retirement at 50+, but mine did.

I was simply trying to suggest another dimension to ‘pension planning’ –apart from (perhaps) topping up NI contributions: some might find an ISA more beneficial from a tax point of view.

scot47

Retirement at 50 ? Cop ? Fireman ? Spook ?