Originally Posted by rallybug

I pay Class 2 at the moment as I'm self-employed in the UK working for the company I was previously employed by - if I stay working for them after moving to the US, then I presume I'd be paying the normal contributions (Class 2 + the extra at tax return time).

Originally Posted by rallybug

I used to work as a normal employee for a company on the Isle of Man, with the Manx version of PAYE.

I left the island to move back to the UK, but continued to be employed by the same company, but as a self-employed contractor, I suppose.

Hence, I send a time sheet to the company for my work, they pay me gross, and at the end of each tax year I do my online tax return - Class 2 NICs go out each month on the HMRC schedule, and there's a further NIC bill for the Class 4 contributions at tax return time.

Originally Posted by nun

I've done the calculations about whether the Class2 NI payments are worth it. If I'd put them instead into a ROTH and compounded the 2.50 a week at 5% interest over 30 years I'd have around 9k. Then let that grow for another 11 years (until I'm 66) at 5% with no additions and I'd end up with 15k. The currently proposed UK flat rate pension will be about 7k a year. If that rises by 3% (inflation) a year for 16 years, when I'll be 66 it will be 11k a year inflation linked for as long as I live. At 5% interest the 15k in a ROTH would last 2 years with 11k annual withdrawals.

Originally Posted by Giantaxe

So Class 2 contributions (if you're eligible) are clearly a bargain even if you're WEP'd. The other interesting thing is that there is no "time value" applied to these contributions, i.e. you don't get charged more for a particular year based on how close you are to retirement. Thus the contributions become an increasingly good thing the closer one is to retirement. So as long as you can get to the 30 years, it actually pays you to "backload" these voluntary contributions.