Adamski444

Hi all - we are just getting all out stuff ready for our move to Auckland in November, and looking at things such as claiming income tax back. This is simple as I understand it, however I have some questions about NI rebates into a personal pension.

Has anyone done this and if so are there any benefits / issues which might arise? I know I should and will speak to a professional but wanted to see if anyone has any experience of doing this? My wife and I have both worked in the UK for about 14 years, so have paid a fair proportion of NI over the years.

Thanks.

chc4me

Hi Adamski444,

If you 'contracted out' of National Insurance then those contributions will have been redirected to your own Personal Pension plan. A personal pension plan will then be able to transfer to a QROPS which you may be able to access some of the capital (or all) depending on age and time away from the UK.

If you are still paying National Insurance then you will not be able to claim it back, unless you have over paid for some reason.

When you are in NZ, you will be able to retire with either the UK State pension (which is why you have paid NI) but it will not be index linked OR you will be able to swap your UK State pension for a NZ Govt pension called National Superannuation which starts from the age of 65.

A quick call to HMRC armed with your National Insurance number will confirm this. The National Insurance line at HMRC is 0845 302 1479 (UK).

Let us know how you get on.

DC10

Isn't it also the case that you are not entitled to a full UK pension unless you have contributed NICs for something like 40 years, otherwise you only get a proportion (I think the minimum is 25% of pension after 10/11 years contribution)?

chc4me

DC10 - yes you are right, BUT they will be able to receive a full NZ govt superannution payment when they turn 65, regardless of NI contributions.

DC10

Not wishing to hijack the thread, but can I do anything about my eight years of NICs when I emigrate from the UK next Friday? I have been a member of a good public sector pension throughout that time. Just became a British citizen, if that's of relevance.

In the past I think the answer has been that it's very complicated and not worth bothering.

mickey_d

It's 30 years now for both men & women reaching retirement age after april 2010.
You can top it up to the full 30 years, if you've worked less. We've had letters sent here with top up figures to do this.

Leither

When you get to 65 (or more likely 85 by that time) you will be eleigible for 8/30 of the UK state pension. You will have to claim it from the UK government. Being a citizen is of relevance because I don't think you'd be entitled to the state pension if you weren't and were living abroad.

As for your occupational pension, you will be able to claim it at 60, or 65 or whatever the terms of the pension are. You will also be able to transfer it into a different pension if you want but obviously you'd only do that if it was a final salary pension. There may even be rules attached to your pension restricting you on what types of schemes you can transfer it to.

mickey_d

You should contact the National Insurance Contributions centre. You can also ask for a pension forecast. When you have a new address, you will need to inform them of that as well.

chc4me

I don't understand why you would want to top up your UK National Insurance contributions - when you move to NZ you will automatically qualify for the NZ State Superannuation payment from the age of 65. The maximum UK State pension gives you £5,200 per year and will not be inflation linked (I think you will need to pay NZ tax on this too.) The NZ Superannuation payment gives you at least $12,923 each, after tax ( this amount is when one partner is age 65, one is under 65) or a maximum of $13,527 per person for a couple both aged over 65.

There are two circumstances where topping up might be beneficial, 1) If you plan to return to the UK. 2) If currency increases dramatically, but that would have to be $3 to the Pound.

It appears to me that National Insurance contributions is a waste of your money.

Or am I missing something??

BEVS

Yes you are.

Think.

BEVS

Good advice Mickey_d as always.

chc4me

Hmmm, Uk state pension can be taken at 60 and the NZ state super at 65, is that what I missed Bev? While that's a big plus for topping up national insurance, are there any other advantages?

mickey_d

It's all about eggs & baskets to me.
Who's to say that 20 years down the road the NZ pension will still be at the level it is now. The concern I have is no-one is contributing towards it & if this country has more financially crippling years like this one, who knows. At least with National Insurance contributions it is sustainable.