Go Back  British Expats > Living & Moving Abroad > USA
Reload this Page >

Class 2 NI. What about us poor expats paying voluntary contributions?

Class 2 NI. What about us poor expats paying voluntary contributions?

Old May 6th 2024, 11:37 am
  #766  
BE Enthusiast
 
Joined: Oct 2012
Posts: 690
alfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond repute
Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by Glasgow Girl
Each additional year of NI contributions will provide an extra £6.32 per week, or £328.64 per year for every year that you collect. At a cost of £824.20 for Class 3 you would only have to collect for just over 2.5 years before you are better off doing so. So, yes it is most definitely worthwhile to contribute as many years as necessary to max out the state pension. The cost of NI contributions must have lagged behind the increase in the state pension because the payback period used to be about 3.5 years.

From the numbers on your statement you only need to backfill up to 5 additional years if you continue to contribute up to 2042 (£221.20-£191.69)/£6.21 so just one year at Class 3 rates.

Great thank you! For sure I'm going to pay the 4 years at the lower rate class 2 before anything changes. Then another one class 3- there is one year at 795.60 - time limit 2027.(although I'm going to call first as
I do not know why I don't have more years at class 2. Seems a bit odd and random.)

alfista1 is offline  
Old May 6th 2024, 12:09 pm
  #767  
BE Enthusiast
 
Joined: Oct 2012
Posts: 690
alfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond repute
Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by mrken30
Wish the HMRC person has told me this in January. I posted my application 2 months ago and still waiting for a reply.

Just applied again, hopefully this doesn't confuse HMRC
I just checked current timeframes are about 12 months!!
I posted mine last year in June - just got the letter today!
alfista1 is offline  
Old May 6th 2024, 12:18 pm
  #768  
BE Enthusiast
 
dracupg's Avatar
 
Joined: Jul 2003
Location: Westleigh, Sydney
Posts: 554
dracupg is an unknown quantity at this point
Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

My *very* basic understanding is that Class 2 would be if you were working full time (in UK or OZ), class 3 if you weren't. They will assume Class 3 if there are gaps in your Oz full time employment history maybe?
dracupg is offline  
Old May 6th 2024, 12:59 pm
  #769  
BE Enthusiast
 
Joined: Oct 2012
Posts: 690
alfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond repute
Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

[QUOTE=dracupg;13252141]My *very* basic understanding is that Class 2 would be if you were working full time (in UK or OZ), class 3 if you weren't. They will assume Class 3 if there are gaps in your Oz full time employment history maybe?[/QUOTE
If that is the case I am sure they have my years from 2018-2023 incorrectly recorded. I was in full time employment overseas but they have listed them as class 3, only the last 12 months a class 2. I did all the correct steps to inform HMRC when I left the country in 2018, paid my 12 months of NI after leaving as you have to do.

Only difference is I changed from employee to contractor but for the same company last year. This should not make any difference.
Some odd years in the past also very random - assuming it is due to a lack of information they have as I travelled.

Last edited by alfista1; May 6th 2024 at 1:21 pm.
alfista1 is offline  
Old May 6th 2024, 8:32 pm
  #770  
Lost in BE Cyberspace
 
Joined: Jul 2016
Posts: 10,096
morpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond repute
Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by Glasgow Girl
Each additional year of NI contributions will provide an extra £6.32 per week, or £328.64 per year for every year that you collect. At a cost of £824.20 for Class 3 you would only have to collect for just over 2.5 years before you are better off doing so. So, yes it is most definitely worthwhile to contribute as many years as necessary to max out the state pension. The cost of NI contributions must have lagged behind the increase in the state pension because the payback period used to be about 3.5 years.

From the numbers on your statement you only need to backfill up to 5 additional years if you continue to contribute up to 2042 (£221.20-£191.69)/£6.21 so just one year at Class 3 rates.
The rate of return one gets from paying past NIC amounts depends on how far away one is from retirement age, but as you well point out the payback is less than three years.
morpeth is offline  
Old May 6th 2024, 8:48 pm
  #771  
Lost in BE Cyberspace
 
Joined: Jul 2016
Posts: 10,096
morpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond repute
Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by alfista1
ah good to know.

What reference number did they say you need to add to indicate a specific year?

Were you overseas all those years? Why have they applied class 2 to only certain years? I was overseas and my situation never changed so confused about their calculations which took 11 months
Thanks
Originally I received a letter out of the blue some years ago which contained a reference number which I started using- assuming they would apply the payments to the oldest years, but then called and found out I had unapplied credits- but over the phone HMRC applied the payments- but told me with a proper reference number payments for past years would be applied automatically but I had to get via phone or letter in advance of making payments. I did have two years payment was misapplied, but a phone call cleared up.

I think their default position is to assume Class 3 payments due unless the application is made for Class 2 payments made, or it is clear to them your were in class 2 position- and any gaps in employment dates, or their records as to your status prior to leaving may affect which class of payments they show as due. Rather than get caught up in some back and forth bureaucratic morass being a bit cynical I assumed rules may change in the future, so I went ahead and paid. Something must have triggered them to assume some years Class 2 and some class 3, and UK has a different tax year than some other tax jurisdictions.
morpeth is offline  
Old May 6th 2024, 10:14 pm
  #772  
BE Enthusiast
 
Joined: Dec 2008
Posts: 673
tdrinker has a reputation beyond reputetdrinker has a reputation beyond reputetdrinker has a reputation beyond reputetdrinker has a reputation beyond reputetdrinker has a reputation beyond reputetdrinker has a reputation beyond reputetdrinker has a reputation beyond reputetdrinker has a reputation beyond reputetdrinker has a reputation beyond reputetdrinker has a reputation beyond reputetdrinker has a reputation beyond repute
Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

You can now apply online and I expect it will provide the reference number.

https://www.gov.uk/guidance/apply-to...en-abroad-cf83
tdrinker is online now  
Old May 7th 2024, 1:35 am
  #773  
 
Pulaski's Avatar
 
Joined: Dec 2001
Location: Dixie, ex UK
Posts: 52,559
Pulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond repute
Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by morpeth
... I think their default position is to assume Class 3 payments due unless the application is made for Class 2 payments made, ....
That is what they do, which is why, whenever anyone asks about making voluntary NI payments from outside the UK, I always advise that "you should apply to make Class 2 contributions".
Pulaski is online now  
Old May 7th 2024, 2:23 am
  #774  
Lost in BE Cyberspace
 
Joined: Jul 2016
Posts: 10,096
morpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond repute
Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by Pulaski
That is what they do, which is why, whenever anyone asks about making voluntary NI payments from outside the UK, I always advise that "you should apply to make Class 2 contributions".
I agree I should have done that.
morpeth is offline  
Old May 7th 2024, 2:25 am
  #775  
 
Pulaski's Avatar
 
Joined: Dec 2001
Location: Dixie, ex UK
Posts: 52,559
Pulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond repute
Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by morpeth
I agree I should have done that.
Pulaski knows best!
Pulaski is online now  
Old May 7th 2024, 2:35 am
  #776  
BE Enthusiast
 
Joined: Oct 2012
Posts: 690
alfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond repute
Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Looking at options to call HMRC (From Uruguay). Skype calls look like a decent option.
World Skype credit - 5 USD for 165 mins. (normal landlines)
Is this a normal landline for HMRC?

Outside UK:
+ 44 191 203 7010
alfista1 is offline  
Old May 7th 2024, 3:36 am
  #777  
 
Pulaski's Avatar
 
Joined: Dec 2001
Location: Dixie, ex UK
Posts: 52,559
Pulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond repute
Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by alfista1
.... Is this a normal landline for HMRC?

Outside UK:
+ 44 191 203 7010
Yes. The (0)191 area code is for phone numbers in Newcastle, where the NI admin office is located.

In the UK premium (caller pays extra) phone numbers are identifiable because of their area code, which are usually in the form 08xx, e.g. 0898. That said, 0800 numbers are free to call from within the UK, though may not be accessible from outside the UK.

Last edited by Pulaski; May 7th 2024 at 3:38 am.
Pulaski is online now  
Old May 7th 2024, 3:40 am
  #778  
BE Enthusiast
 
Joined: Oct 2012
Posts: 690
alfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond reputealfista1 has a reputation beyond repute
Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by Pulaski
Yes. The (0)191 area code is for phone numbers in Newcastle, where the NI admin office is located.

In the UK premium (caller pays extra) phone numbers are identifiable because of their area code, which are usually in the form 08xx, e.g. 0898
Perfect thanks.

Looking at localphone also. Registered an accont with them and it says 0.6¢ / min to this number.
Daft question but it this really 0.6 cents or 0.6 USD(60 cents)?
0.6 cents seems too cheap
alfista1 is offline  
Old May 7th 2024, 8:37 am
  #779  
 
Pulaski's Avatar
 
Joined: Dec 2001
Location: Dixie, ex UK
Posts: 52,559
Pulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond repute
Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by alfista1
Perfect thanks.

Looking at localphone also. Registered an accont with them and it says 0.6¢ / min to this number.
Daft question but it this really 0.6 cents or 0.6 USD(60 cents)?
0.6 cents seems too cheap
I don't know to 100% certainty, but I'd be willing to place a small bet that it is, as stated, 0.6c/ minute. I used to pay about twice that, somewhere around 1.25-1.5c/min for international calls from the US to the UK.
Pulaski is online now  
Old May 7th 2024, 8:47 am
  #780  
Lost in BE Cyberspace
 
mrken30's Avatar
 
Joined: Jul 2008
Location: Portlandia Metro
Posts: 7,427
mrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond repute
Default Re: Class 2 NI. What about us poor expats paying voluntary contributions?

Originally Posted by alfista1
Perfect thanks.

Looking at localphone also. Registered an accont with them and it says 0.6¢ / min to this number.
Daft question but it this really 0.6 cents or 0.6 USD(60 cents)?
0.6 cents seems too cheap
I have a Tello cell phone plan and calls to the UK are included. I pay less than $10 a month for the plan. It still didn't make the wait to talk to someone any easier
mrken30 is offline  

Contact Us - Manage Preferences - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Your Privacy Choices -

Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.