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Paying top-up NI contributions

Paying top-up NI contributions

Old Oct 20th 2015, 12:39 pm
  #61  
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Default Re: Paying top-up NI contributions

Originally Posted by meinkl
Thanks.. having done some more tests with the all knowing UKgov website I now realise that I am, in fact, 4 years too young... try telling my doctor that though!!
It makes me feel a whole lot better.
But i still want to know how to pay for the missing 5 years or more so as to get a decent percentage of the full pension.
28/30ths of £151.25 is a lot more than 28/35ths of £151.25
If you are working overseas you can apply to pay 6 years of retrospective voluntary NICs.

I don't have much sympathy for UK expats who haven't taken advantage of the ability to pay Class 2 NICs while they are abroad and now find themselves short of UK contributions. However, I do sympathize with wives who have not worked and now find themselves with little to no NI record and no automatic right to get a pension based on their husband's contributions.
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Old Oct 20th 2015, 4:41 pm
  #62  
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Default Re: Paying top-up NI contributions

Really useful links, some i had found others gave me new info... many thanks


I have paid as much as I was previously asked to voluntarily whilst overaseas and whilst not taking advantage of any of the benefits, roads, NHS, etc. etc. I would now like to pay the additional years as well so that I can truthfully say that I paid my dues prior to receiving what I paid into. I hardly think that's asking for sympathy.

Last edited by meinkl; Oct 20th 2015 at 4:47 pm.
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Old Oct 20th 2015, 5:18 pm
  #63  
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Default Re: Paying top-up NI contributions

Originally Posted by meinkl
This has made me realise my true vocation... get back to UK and get into politics... now... where did i put that roast piglet?
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Old Oct 20th 2015, 6:34 pm
  #64  
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Default Re: Paying top-up NI contributions

Originally Posted by meinkl
Really useful links, some i had found others gave me new info... many thanks


I have paid as much as I was previously asked to voluntarily whilst overaseas and whilst not taking advantage of any of the benefits, roads, NHS, etc. etc. I would now like to pay the additional years as well so that I can truthfully say that I paid my dues prior to receiving what I paid into. I hardly think that's asking for sympathy.
While abroad the expat usually has a low UK tax burden which is sensible as if they have little UK source income why should they pay tax which is used to pay for things used by UK residents like the NHS, benefits, roads etc.

Voluntary NI payments give you access to a very limited series if benefits....it's mostly to keep up your NIC record for the state pension. HMRC won't ask you to pay voluntary NICs while abroad, but they do have ways for you to make some catch up payments. People should be aware that they can continue to pay NICs while abroad so they have a complete UK NIC record when they retire and can avoid having to make a limited number of retroactive contributions which might still leave them short.
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Old Oct 21st 2015, 6:58 am
  #65  
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Default Re: Paying top-up NI contributions

Originally Posted by nun
Voluntary NI payments give you access to a very limited series if benefits....it's mostly to keep up your NIC record for the state pension. HMRC won't ask you to pay voluntary NICs while abroad, but they do have ways for you to make some catch up payments. People should be aware that they can continue to pay NICs while abroad so they have a complete UK NIC record when they retire and can avoid having to make a limited number of retroactive contributions which might still leave them short.
Very true.. i knew this 20 years ago and so paid what i thought was nearly enough to earn the required 30 years, based upon my returning and then adding the remaining years later. However the 30 has changed to 35 unbeknown to me until recently, plus my health is now such that i will only get limited part time work upon return and thus want to top up as much as I can whilst I can. But it seems like chasing the proverbial carrot on a stick.. i just fear than if and when I pay tha balance to make 35 years it will get increased yet again.
I pity people who had paid the old 40 year requirement, only to have they reduce to 30 thus rendering 10 years NIC effectively redundant.
I have had a reply from the statement office saying it will take 8 weeks to calculate before they can post the statement to me.
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Old Oct 21st 2015, 7:15 am
  #66  
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Default Re: Paying top-up NI contributions

Wait for the statement. My husband is in a similar position to yourself. He reaches retirement age after the new pension comes in. He only has 30 years contributions, so we were going to buy the extra 5. But, he has been told that because his pension is also reduced by some years when he was in 'contracted out' pension schemes, he is better off not buying extra contributions. He will get what he would have got under the old scheme.
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Old Oct 21st 2015, 7:33 am
  #67  
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Default Re: Paying top-up NI contributions

I have the same contracted out years... seemed like a good idea at the time during the 80's, but then private pension funds collapsed, so the safety net developed too many holes! My QROPS is now 50% of what it was when I took it out.. would be even less if I had left it in the UK private pension scheme any longer. Bad scheme management and poor world economy. Thus my interest to ensure the state one is as high as possible.
Now sit and wait for the postman.................
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Old Oct 21st 2015, 2:54 pm
  #68  
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Default Re: Paying top-up NI contributions

reading over this thread I am unsure about something & trust someone on here can help answer it?

Disregarding any voluntary or 6 past years NIC top up's or class 3A NIC's

Take someone living in the UK who has 30 years of NIC and who is already collecting the state pension which is currently £115.95 per week.

Come 2016 as we know the requirement for the 'new state pension is 35 years NIC's' will that person who only has 30 years or 30/35th's of the new requirement - will they get 30/35th's (85.71%) of the proposed new pension rate of £151.20 per week, which works out to approx £130 per week, or be stuck with £115.95/wk with the yearly 2.5% increases going forward?
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Old Oct 21st 2015, 2:55 pm
  #69  
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Default Re: Paying top-up NI contributions

Originally Posted by not2old
reading over this thread I am unsure about something & trust someone on here can help answer it?

Disregarding any voluntary or 6 past years NIC top up's or class 3A NIC's

Take person A living in the UK who has 30 years of NIC and who is already collecting the state pension which is currently £115.95 per week.

Come 2016 as we know the requirement for the 'new state pension is 35 years NIC's' Person A who only has 30 years or 30/35th's of the new requirement - will they get 30/35th's (85.71%) of the proposed new pension rate of £151.20 per week, which works out to approx £130 per week, or be stuck with £115.95/wk with the yearly 2.5% increases going forward?
They will remain on the old system - receiving what they currently get, unless they take advantage of the temporarily available class 3A NICs.
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Old Oct 21st 2015, 3:23 pm
  #70  
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Default Re: Paying top-up NI contributions

Originally Posted by rebs
They will remain on the old system - receiving what they currently get, unless they take advantage of the temporarily available class 3A NICs.
Based on a single person only, even topping up the 5 extra years, it will give them only the extra £5/wk on top of their current [full state pension of]£115.95 per week taking them to £120.95 + the 2.5% yearly increase for the 2016 to £123.97 as what they will from April 2016, compared to someone that turns state pension age after April 2016 who will get the £151.20.

This is not right, so what can be done for the lower pension earner - will they get topped up with something such as pension credit is likely what will happen?

Pension credit for a single is currently £151.20
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Old Oct 21st 2015, 6:08 pm
  #71  
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Default Re: Paying top-up NI contributions

Class 3A isn't a top up to get the new pension. It's basically an annuity on offer for a limited period, offering a better rate than can be got commercially. People who buy 3A will still get the old style pension, plus whatever the payout is for their Class 3A contributions.

As I've stated ad nauseum anyone entitled to buy Class 3A is probably going to gain more by deferring their state pension, the only possible exceptions being people who have already deferred for a period and can't defer again, or people wanting the survivor benefits provided by Class 3A but not by the basic state pension.

Pension credit is a means tested benefit for pensioners on low incomes. It isn't being abolished, so it will still be available for pensioners whose income is low enough to meet the criteria.
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Old Oct 21st 2015, 7:21 pm
  #72  
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Default Re: Paying top-up NI contributions

Very few people get just the basic state pension. If they are getting the pension now they will get the earnings related second state pensions or pension credits. There has been a lot of unfortunate tampering with the pension system over the years and opting out was one of the worst because lots of people simply didn't understand what they were doing and the added risk they were taking on. Once they reach state pension age and realize they won't get full state pension there could be a lot of hardship in store. But this is where we have to balance personal responsibility against the greed and stupidity of the politicians and financial types that designed the whole scheme. It does point to the vast lack of basic financial knowledge across all sectors of society though. QROPS are are another example of pensions mis-selling. I have spend many hours explaining the probable US tax pitfalls of these to British expats in the US and pointing out the terrible fund choices and high fees, but it's often an uphill battle.

It is difficult for people with intermittent NIC records to adapt to changing requirements, but that is the cost of a state runs system that is exposed to political as well as financial pressures. I got a letter a couple if years ago from HMRc saying I could stop NICs as I had 30 years, but I chose to continue paying as the new 35 year limit was in the works. But I so have a problem with the Government moving the goal posts on people who have qualified for a full pension under the old rules. Those people should be grandfathered or at least deemed to have qualified for the new flat rate pension if they retire after April 2016 and had 30 years of contributions under the old rules. Still when I feel the BP raising at the unfairness of it all I remind myself that being able to continue to pay NICs and an expat is a great deal, especially if it's Class 2.

Last edited by nun; Oct 21st 2015 at 7:29 pm.
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Old Oct 21st 2015, 7:34 pm
  #73  
 
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Default Re: Paying top-up NI contributions

Originally Posted by nun
Very few people get just the basic state pension. If they are getting the pension now they will get the earnings related second state pensions or pension credits. There has been a lot of unfortunate tampering with the pension system over the years and opting out was one of the worst because lots of people simply didn't understand what they were doing and the added risk they were taking on. .....

..... It is difficult for people with intermittent NIC records to adapt to changing requirements, but that is the cost of a state runs system that is exposed to political as well as financial pressures. I got a letter a couple if years ago from HMRc saying I could stop NICs as I had 30 years, but I chose to continue paying as the new 35 year limit was in the works. But I so have a problem with the Government moving the goal posts on people who have qualified for a full pension under the old rules. Those people should be grandfathered or at least deemed to have qualified for the new flat rate pension if they retire after April 2016 and had 30 years of contributions under the old rules. Still when I feel the BP raising at the unfairness of it all I remind myself that being able to continue to pay NICs and an expat is a great deal, especially if it's Class 2.
Are you aware of any way to measure the impact on future retirees of having previously been opted-out? I was opted out for a number of years, twelve I think, and am still a number years short of reaching 35 years NICs, but given that I will reach 35 years of NICs a number of years before retirement, I am already wondering if it would be beneficial for me to keep contributing beyond 35 years to dilute the impact of the opted-out years?
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Old Oct 21st 2015, 8:19 pm
  #74  
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Default Re: Paying top-up NI contributions

Originally Posted by Pulaski
Are you aware of any way to measure the impact on future retirees of having previously been opted-out? I was opted out for a number of years, twelve I think, and am still a number years short of reaching 35 years NICs, but given that I will reach 35 years of NICs a number of years before retirement, I am already wondering if it would be beneficial for me to keep contributing beyond 35 years to dilute the impact of the opted-out years?
You really need to get a pension forecast from HMRC.
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Old Oct 21st 2015, 8:34 pm
  #75  
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Default Re: Paying top-up NI contributions

Originally Posted by Editha
You really need to get a pension forecast from HMRC.
Yes I agree. The DWP factors in your qualifying years, contracted out years and any pension you will get from those contracted out years in coming up with your state pension payment. Requesting a forecast is quite simple and definitely more accurate than anything people could tell you on this forum.
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