British Expats

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-   -   Topping up NI Contributions (https://britishexpats.com/forum/moving-back-uk-61/topping-up-ni-contributions-932554/)

freerskier May 5th 2020 1:20 am

Topping up NI Contributions
 
I'm a Green Card holding Brit and been in the USA since 2014 and have been looking at retirement stuff recently.

Realized, I haven't made the full 35 years NI contributions necessary for the full state pension. Has anyone completed NI38 and gone through the process of "back filling" their Class 3 contributions and can give some advice - especially as the form seems to assume you are completing it before you leave the UK, asks for your UK address, etc.


Thanks.

ianandhelena May 5th 2020 7:37 am

Re: Topping up NI Contributions
 
Yes I did it from Australia.

I just filled in the form at the back of the NI38 and applied to pay Class 2 contributions (only costs about GBP156 p.a. rather than 780).

In the box asking for my UK address, I just wrote "none".

When you are in a position to pay, ensure you phone Future Pensions (+44 (0)191 218 3600) to clarify which years it is worth contributing for, as it's possible to pay for some years that don't provide any uplift in the value of the pension. From memory in my case, it wasn't worth paying for more than 30 years prior to 2016 when the pension changed.

Twitcher1958 May 5th 2020 9:19 am

Re: Topping up NI Contributions
 

Originally Posted by ianandhelena (Post 12848529)
Yes I did it from Australia.

I just filled in the form at the back of the NI38 and applied to pay Class 2 contributions (only costs about GBP156 p.a. rather than 780).

In the box asking for my UK address, I just wrote "none".

When you are in a position to pay, ensure you phone Future Pensions (+44 (0)191 218 3600) to clarify which years it is worth contributing for, as it's possible to pay for some years that don't provide any uplift in the value of the pension. From memory in my case, it wasn't worth paying for more than 30 years prior to 2016 when the pension changed.

I think we did exactly this in early March - we’d already done the online forecast then called to confirm - we were extremely impressed by the person we spoke to who also stressed the point about not making payments for years prior to 2016 when the scheme changed. I don’t think we gave a UK address either.

durham_lad May 5th 2020 10:32 am

Re: Topping up NI Contributions
 

Originally Posted by freerskier (Post 12848453)
I'm a Green Card holding Brit and been in the USA since 2014 and have been looking at retirement stuff recently.

Realized, I haven't made the full 35 years NI contributions necessary for the full state pension. Has anyone completed NI38 and gone through the process of "back filling" their Class 3 contributions and can give some advice - especially as the form seems to assume you are completing it before you leave the UK, asks for your UK address, etc.


Thanks.

I did it from the USA, all by regular mail.

freerskier May 5th 2020 3:51 pm

Re: Topping up NI Contributions
 
Thanks Ian and Helena and the other folks for the good advice - interesting on the Class 2 vs 3 - I assumed class3 after I read that CF83 leaflet as I was employed not self-employed - was that your situation? Also, Wonder if UK.Gov cares I got divorced after marrying in the US, again seems to assume you were married at the time of completing the form, which i wasn't. Did you put TBA for the question "How long do you intend to stay abroad?"

Twitcher1958 May 5th 2020 5:03 pm

Re: Topping up NI Contributions
 
I think NI38 gives 3 conditions which, if satisfied, mean you contribute at the lower rate. And think we put TBA or like for the question re how long we’ll be abroad.

scot47 May 5th 2020 6:18 pm

Re: Topping up NI Contributions
 
A cautionary tale
My brother left it too late and as a result he has long gaps in his record and is now "out of time"

He should have taken my advice years ago.

To all of you out there. Checkout your NI Contribution Record. Be like me and not like my brother !

freerskier May 5th 2020 9:25 pm

Re: Topping up NI Contributions
 
Thanks again and for scot47's handy addition - I checked my NI online and at 33 years I have 2 years to "back fill" to get to the 35, with April 2021 being the end date for the "oldest year". Ill be getting on with it shortly as the difference in state pension just for being 2 years behind is around 35 quid a week. Well worth the top up. Cheers all.

ianandhelena May 6th 2020 3:39 am

Re: Topping up NI Contributions
 

Originally Posted by freerskier (Post 12848743)
Thanks Ian and Helena and the other folks for the good advice - interesting on the Class 2 vs 3 - I assumed class3 after I read that CF83 leaflet as I was employed not self-employed - was that your situation? Also, Wonder if UK.Gov cares I got divorced after marrying in the US, again seems to assume you were married at the time of completing the form, which i wasn't. Did you put TBA for the question "How long do you intend to stay abroad?"

We put permanently for the "how long" question.
Here's a guide to which contributions to apply to pay: https://www.gov.uk/voluntary-nationa...-contributions

ianandhelena May 6th 2020 3:44 am

Re: Topping up NI Contributions
 

Originally Posted by freerskier (Post 12848880)
as the difference in state pension just for being 2 years behind is around 35 quid a week.

Each year you contribute entitles you to £175 ÷ 35 = £5 p.w. at current pension rates.

freerskier Jan 21st 2021 5:56 pm

Re: Topping up NI Contributions
 
Thanks ianandhelena. So really - by that calculation just doing the 2 years would only add a fiver a week ...may not be that worth it. Unless I've misunderstood the calculation of course.

scot47 Jan 21st 2021 5:58 pm

Re: Topping up NI Contributions
 
If you qualify at the lower rate of contributions this is a very good buy. Just make sutre you live to collect. I have been getting my pension now for 9 years and I hope will get it for many years to come !

durham_lad Jan 21st 2021 6:02 pm

Re: Topping up NI Contributions
 

Originally Posted by ianandhelena (Post 12848977)
Each year you contribute entitles you to £175 ÷ 35 = £5 p.w. at current pension rates.


Originally Posted by freerskier (Post 12962410)
Thanks ianandhelena. So really - by that calculation just doing the 2 years would only add a fiver a week ...may not be that worth it. Unless I've misunderstood the calculation of course.

2 years of contributions = £10 p.w. and at Class 2 rates that is a great deal.

freerskier Jan 21st 2021 6:26 pm

Re: Topping up NI Contributions
 
Ah, I see. If I pay class 3's though - which I suspect - not so much of a dealio I guess.

durham_lad Jan 21st 2021 6:36 pm

Re: Topping up NI Contributions
 

Originally Posted by freerskier (Post 12962425)
Ah, I see. If I pay class 3's though - which I suspect - not so much of a dealio I guess.


Depends on when you start collecting. For example if you contribute at Class 3 one year before you start collecting it will take 2.5 years to get your money back, and the OAP goes up each year, so the contribution continues to grow throughout your lifetime. If you start contributing 10 years out then you have to calculate how much interest you will be losing each year on that ~£700 contribution.

Spreadsheet heaven :)


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