freerskier

Thanks durham_lad - love a spreadsheet Im probably going to retire - no way of really knowing - in around 8 to 10 years minimum.

tdrinker

Include tax (if applicable) in your spreadsheet, as the gross is £5 / week but it's taxable unless your income is below the tax threshold, so you get a smaller amount "in your pocket". If you retire to a country that doesn't get the annual inflation uplift, this too is relevant for the spreadsheet (not relevant for USA).

Some people who made lower NI contributions whilst "contracted out" (generally, because they were enrolled in an employer's pension scheme) may need more than 35 years contributions to get a full pension, as an adjustment is applied to reflect the lower NI paid. You can check your situation here: https://www.gov.uk/check-national-insurance-record

freerskier

Thanks all.

durham_lad

I couldn't resist working up a spreadsheet on this.

Currently 1 year of contributions costs £795 and will get you £260.30/year. (a 3 year payback)

Suppose you have 10 years of contributions and then start collecting, you will then get £2,603.
Instead of making the contributions suppose you invested £795/year and on average made 5% per year.
After 10 years you would have £9,999 to create or buy an income stream. Even if you were a brilliant investor and consistently made 10%/year that would still only give you £1,000/year.
The 10 years of voluntary contributions will get you £2,650/year, index linked for the rest of your life which is why I think it is a good investment.

You only really lose money if you die within 3 or 4 years of starting to collect. e.g. Start making contributions at age 57 with the aim of living over the age of 70. If you die before age 70 then you have lost, live longer and you have won.

austin_d_powers

FYI: for those back in the UK wanting to pay voluntary CLASS 2 payments for prior years abroad use form CF83, fill in the form as if you are still abroad, check mark your UK address as mailing/contact address, do not request direct debit payment (you will get a letter saying you can't pay by direct debit), check yes to wanting to know shortfall of contributions, you will get a letter with amounts payable per year, you will not get a bill with a reference number, you will not get clear instructions on how to pay, the letter you receive may have no contact info on it.
To make an actual payment go to www.gov.uk/pay-class-2-national-insurance then select Bank details for online or telephone banking then look under heading "overseas payment" for UK payment sort code, bank account and reference number. (It is like you are paying from overseas with a UK bank account).

durham_lad

That is great info.

brits1

Is class 2 only for the self employed? I did not contribute whilst in Aus so I had a few years "missing" when I contacted to ask about contributions when I first arrived back in the UK, the advice given was ...If I was going to work then that would make up for the years missing and by retirement age I would be on a full state pension. That might help someone who is thinking of returning back to the UK who is looking to work and live there until retirement...this is also about how many years you have already contributed to before leaving the UK and how many years you have (work wise) before retiring.

durham_lad

I don’t know but hopefully someone more knowledgeable will come along.

As a follow up question I would also like to know how far back you can pay voluntary contributions. Suppose you decided you didn’t need to pay voluntary contributions because you were going to be working but then something happens like losing your job, can you look back, say 15 years, and claim a few years as Class 2 because you were self employed those years?

tdrinker

NI eligibility is here:
http://www.gov.uk/voluntary-national...-contributions

Relevant for British expats includes:

Living AND working abroad: Class 2 - but only if you worked in the UK immediately before leaving, and you’ve previously lived in the UK for at least 3 years in a row or paid at least 3 years of contributions

Living abroad but NOT working: Class 3 - but only if at some point you’ve lived in the UK for at least 3 years in a row or paid at least 3 years of contributions

You can usually only pay for gaps in your National Insurance record from the past 6 years.

You can’t stop paying NI when you have enough years for a full pension, only when you reach retirement age. Voluntary NI contributions aren’t refundable.

Therefore, you make a decision on whether or not to pay voluntary NI contributions based on your expected circumstances. But if things change, you could regret paying them, e.g. you unexpectedly return to work in the UK, or regret not paying them, e.g. you become unemployed and have to pay class 3 not class 2.

durham_lad

Thanks for that, good to know.

I got blindsided by the change in full benefits years. I timed my voluntary contributions so I would have 30 years at age 66 but they changed the requirement to be 35 years. They did allow those close to retirement age to make up the years but I was a few months too young.

chawkins99

Not so. My online forecast states additional payments won't improve my forecast.

I have reached the 35-year max. My wife still has about 3 years left to contribute.

This year, she received a statement to pay this year's contributions. I did not.

tdrinker

If you making voluntary NI payments, you can stop when you have sufficient for a full pension.

But if you're paying NI because you're working in the UK, you keep paying until you reach retirement age.

freerskier

Anyone found a way to use the UK Government Gateway without a UK address. I've set my ID up etc but part of the profile set up asks for a UK address. Like a lot of people here I don't have one so now cant check my NI contributions/gap using the published http://www.gov.uk/voluntary-national...-contributions link. Hmm.

durham_lad

I managed back when I lived in the USA prior to 2016 but can’t remember how.

BuckinghamshireBoy

My Government Gateway works fine, just checked it a few minutes ago.

Established it in one non-UK country quite a few years back, moved it to another non-UK country two and a bit years back, no probs.

Never been asked for a UK address.

https://www.access.service.gov.uk/login/signin/creds should give you the sign in page...

Gateway ID + password should move you on to the second authentication step. From there you can choose your secondary authentication method.

Have you ever had this work for you?