NI contributions

Old Mar 31st 2012, 6:56 am
  #1  
Just Joined
Thread Starter
 
Joined: May 2008
Posts: 15
rachyp is an unknown quantity at this point
Default NI contributions

I have been in the ME for nearly 4 years now. Someone mentioned about paying Ni coontributions.
Can anyone help me with what i should be paying- class 2 or class 3?

And how do I go about arranging this payment?

TIA
rachyp is offline  
Old Mar 31st 2012, 3:56 pm
  #2  
womble
 
Joined: Sep 2005
Posts: 2,588
OriginalSunshine has a reputation beyond reputeOriginalSunshine has a reputation beyond reputeOriginalSunshine has a reputation beyond reputeOriginalSunshine has a reputation beyond reputeOriginalSunshine has a reputation beyond reputeOriginalSunshine has a reputation beyond reputeOriginalSunshine has a reputation beyond reputeOriginalSunshine has a reputation beyond reputeOriginalSunshine has a reputation beyond reputeOriginalSunshine has a reputation beyond reputeOriginalSunshine has a reputation beyond repute
Default Re: NI contributions

don't bother - just make sure your medical insurance is valid in the UK, you have a cash lump sum stashed away in case you get made redundant, and think if you really want to wait until you are 70+ to get 100 quid a week.....?
OriginalSunshine is offline  
Old Mar 31st 2012, 5:43 pm
  #3  
Bob
SUPER MODERATOR
 
Bob's Avatar
 
Joined: Aug 2004
Location: MA, USA
Posts: 91,480
Bob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond repute
Default Re: NI contributions

Originally Posted by OriginalSunshine View Post
don't bother - just make sure your medical insurance is valid in the UK, you have a cash lump sum stashed away in case you get made redundant, and think if you really want to wait until you are 70+ to get 100 quid a week.....?
Depends how close someone is to retirement and/or the 30 years of contributions to get a full pension.

If someone is in their 20's, it probably isn't worth it, but someone in their 40's, for the sake of a couple squid a week, it's a bit of a bargain to make the voluntary contributions.
Bob is offline  
Old Apr 1st 2012, 9:04 am
  #4  
Powered by cows
 
Autonomy's Avatar
 
Joined: Jul 2004
Location: currently Dubai, ex UK
Posts: 4,581
Autonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond repute
Default Re: NI contributions

These should help...

http://www.direct.gov.uk/en/MoneyTax...ngup/DG_190069

http://www.hmrc.gov.uk/pdfs/nico/ni38.pdf
Autonomy is offline  
Old Apr 1st 2012, 9:45 am
  #5  
Bored liberal
 
Meow's Avatar
 
Joined: Feb 2007
Location: Over there ----->
Posts: 13,704
Meow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond repute
Default Re: NI contributions

The rule of thumb is that it's probably worth continuing with NI contributions if you are likely to retire in the UK, EU, or one of the few other places where your State Pension will be indexed in payment. If this is not going to be the case, don't bother as the income will soon be devalued by the effects of inflation.
Meow is offline  
Old Apr 2nd 2012, 7:15 am
  #6  
Just Joined
 
Ross Naylor's Avatar
 
Joined: Apr 2011
Location: Warsaw, Poland
Posts: 10
Ross Naylor is an unknown quantity at this point
Default Re: NI contributions

Hi Rachyp,

Your first step should be to contact the state pension forecasting team in Newcastle and ask for a pension forecast.

This will tell you the number of qualifying years that you already have as well as the level of state pension that you can currently expect.

Their telephone number is +44 191 218 3600. If you contact them, they will then send you the completed relevant form for you to sign and return to them. (Remember, as with all communications with HMRC, to have your NI number handy when you call.)

Alternatively, if you want to speed the process up, you can download the relevant form here and send it directly to them. The address to send it to is:

State Pension Forecasting Team
The Pension Service
Tyneview Park
Whitley Road
Newcastle upon Tyne
NE98 1BA
England

Allow them a few weeks to get back to you.

The next step, if you don’t already do so, is to start making regular voluntary contributions. There are 2 types of contribution that you can make, either Class 2 or Class 3.

To qualify for Class 2 Contributions, you must have been ‘ordinarily’ employed or self-employed immediately before you went abroad. (If you are in doubt as to whether you qualify, contact National Insurance Contributions – International Caseworker Team on +44 191 225 4811).

If you don’t qualify for Class 2, then you need to make Class 3 contributions.

Class 2 contributions have the following benefits:

• they count towards your State Pension when you retire
• they entitle you to the Employment and Support Allowance (previously known as Incapacity Benefit) and bereavement benefits when you return to the UK

Class 3 contributions have fewer benefits. Namely, they don’t entitle you to the Employment and Support Allowance when you return to the UK.

In addition, Class 3 contributions are more expensive. For Class 2 contributions, the payment is equivalent to GBP2.65 per week (2012/2013). Class 3 payments are equivalent to GBP13.25 per week (2012/2013)

As you can see, wherever possible, it makes sense to pay Class 2 Contributions.

To commence contributions (Class 2 or 3) you need to complete the form CF83, which can be found on the last 2 pages of the NI38 document. You can find a copy here.

Payments can be made monthly by Direct Debit or with an annual payment.

Finally, if you haven’t been making any contributions for some time and still do not have 30 qualifying years, then you can make up missed years going back for the last 6 years. Your State Pension Forecast (mentioned above) will tell you how much you need to pay to make up each of these years.

Instructions on how to make payments for these missed years will be on the forecast letter.

As you can see above there is some debate as to whether paying voluntary NICs is worthwhile. My tuppenceworth is that for just under 3 pound a week it makes sense, especially if as Meow mentions you are likely to retire in the UK, EU or one of the other jurisdictions where the pension increases in line with inflation.
Ross Naylor is offline  
Old Apr 2nd 2012, 8:55 am
  #7  
Account Closed
 
Joined: Mar 2012
Location: Dubai, working at Dust World Central
Posts: 3,706
mikewot has a reputation beyond reputemikewot has a reputation beyond reputemikewot has a reputation beyond reputemikewot has a reputation beyond reputemikewot has a reputation beyond reputemikewot has a reputation beyond reputemikewot has a reputation beyond reputemikewot has a reputation beyond reputemikewot has a reputation beyond reputemikewot has a reputation beyond reputemikewot has a reputation beyond repute
Default Re: NI contributions

If you've made over 30 years of Class 1 payments (like me) then you don't need to make any more contributions as you've made the maximum. However that won't stop them taking money off you if they can. Because my company is UK based, but I'm locally paid, HMRC are still taking Class 1 contributions from me for the first 52 weeks overseas.
mikewot is offline  
Old Apr 2nd 2012, 9:18 am
  #8  
Powered by cows
 
Autonomy's Avatar
 
Joined: Jul 2004
Location: currently Dubai, ex UK
Posts: 4,581
Autonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond repute
Default Re: NI contributions

What is the difference between class 2 and 3 - If class 2 gives you more and is 25% of class 3 - why would you pay class 3?
Autonomy is offline  
Old Apr 2nd 2012, 9:22 am
  #9  
Just Joined
 
Ross Naylor's Avatar
 
Joined: Apr 2011
Location: Warsaw, Poland
Posts: 10
Ross Naylor is an unknown quantity at this point
Default Re: NI contributions

Originally Posted by Autonomy View Post
What is the difference between class 2 and 3 - If class 2 gives you more and is 25% of class 3 - why would you pay class 3?
Because not everyone qualifies to make class 2 contributions. To qualify for Class 2 Contributions, you must have been ‘ordinarily’ employed or self-employed immediately before you went abroad.
Ross Naylor is offline  
Old Apr 2nd 2012, 9:25 am
  #10  
Powered by cows
 
Autonomy's Avatar
 
Joined: Jul 2004
Location: currently Dubai, ex UK
Posts: 4,581
Autonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond reputeAutonomy has a reputation beyond repute
Default Re: NI contributions

Originally Posted by Ross Naylor View Post
Because not everyone qualifies to make class 2 contributions. To qualify for Class 2 Contributions, you must have been ‘ordinarily’ employed or self-employed immediately before you went abroad.
Ok - understand now. Cheers.
Autonomy is offline  
Old Apr 2nd 2012, 9:46 am
  #11  
Millhouse is not a meme
 
Millhouse's Avatar
 
Joined: Aug 2009
Location: Disneyland, Dubai
Posts: 14,599
Millhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond repute
Default Re: NI contributions

I took the view that it's not worth it. I'll be collecting my giro in 32 years time assuming:

1) I'm not dead.
2) They have not increased the retirement age.
3) I'm not dead by the time I meet the revised mandatory retirement age.
4) There is a population boom and enough kids enter the tax system to pay for the ageing population so that they can keep the scheme running.
5) Inflation hasn't ravaged the economy to the point where the government cannot afford to keep indexing the payments.
6) I haven't moved to Thailand to become a full time sex tourist.

Personally, I'd rather pocket the two quid a week and spend it on a bag of Tangtasics
Millhouse is offline  

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Contact Us Archive Advertising Cookie Policy Privacy Statement Terms of Service

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.