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Should I make voluntary contributions to national insurance?

Should I make voluntary contributions to national insurance?

Old Jun 22nd 2022, 9:38 pm
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Default Should I make voluntary contributions to national insurance?

Hi all, I grew up in England and went to university there, worked a few minor jobs over the summers. Immediately after uni I left for the US. I'm 42 now and wondering if I should be making voluntary contributions to national insurance? I did get a call from a government entity in 2009 asking if I wanted to make voluntary contributions but seeing as I was a struggling grad student at the time, I didn't have a dime to spare. Any thoughts on this from this insightful group? My wife mentioned a British expat friend of ours who has been dutifully making voluntary contributions and posed the question of whether I should be doing it too.
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Old Jun 22nd 2022, 10:05 pm
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Default Re: Should I make voluntary contributions to national insurance?

Originally Posted by ArizonaTrail View Post
Hi all, I grew up in England and went to university there, worked a few minor jobs over the summers. Immediately after uni I left for the US. I'm 42 now and wondering if I should be making voluntary contributions to national insurance? I did get a call from a government entity in 2009 asking if I wanted to make voluntary contributions but seeing as I was a struggling grad student at the time, I didn't have a dime to spare. Any thoughts on this from this insightful group? My wife mentioned a British expat friend of ours who has been dutifully making voluntary contributions and posed the question of whether I should be doing it too.
Unless you have made three years of actual contributions (not deemed years) then you can't make voluntary contributions, so unless your "few minor jobs" are sufficient to accrue three years of contributions, then paying voluntary contributions isn't even an option for you.

It is probably worth giving the DWP pensions international desk a call just to make sure though, because if you are eligible for the Class 2 contribution rate it is the most insanely good "zero risk investment" ever imagined. Each year of Class 2 contributions is paid back after you retire in only about 7½ months of increased retirement pension.

Last edited by Pulaski; Jun 22nd 2022 at 10:35 pm.
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Old Jun 22nd 2022, 10:24 pm
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Default Re: Should I make voluntary contributions to national insurance?

Or if you don’t want to hold on the phone and you have the details needed create a login here you can look at your record.

https://www.gov.uk/check-national-insurance-record

Open up a “Full year” if it has a GBP amount it from earnings.. it it has “Credits 52 or 53 weeks” it’s not from earnings.

As noted below if you qualify to make voluntary contributions it can be a great ROI… but even then you are limited to 6 years or so of back payments so you wound need to see if you will be able to make enough years and also look at US SS and see if you will get hit by WEP etc.

I was lucky to stumble on a thread here years ago and was able to get myself filled in on all but 3 years since I was 16.

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Old Jun 23rd 2022, 10:42 am
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Default Re: Should I make voluntary contributions to national insurance?

Thanks for all this info. I agree it seems unlikely but worth checking into. I'll get the account and take a look. Congrats on your contribution history, tht. Sometimes all this putzing around in online forums actually pays off!
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Old Jun 23rd 2022, 11:03 am
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Default Re: Should I make voluntary contributions to national insurance?

Originally Posted by tht View Post
As noted below if you qualify to make voluntary contributions it can be a great ROI… but even then you are limited to 6 years or so of back payments
It can be longer than that, depending on age….but only until next year, and then that option goes away. https://www.gov.uk/voluntary-nationa...ions/deadlines

OP, I agree with the above, if you can make voluntary contributions it's an amazing investment and a bit of a no brainer tbh.

Last edited by christmasoompa; Jun 23rd 2022 at 12:46 pm. Reason: Typo - can, not can’t!
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Old Jun 23rd 2022, 12:28 pm
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Default Re: Should I make voluntary contributions to national insurance?

Originally Posted by Pulaski View Post

It is probably worth giving the DWP pensions international desk a call just to make sure though, because if you are eligible for the Class 2 contribution rate it is the most insanely good "zero risk investment" ever imagined. Each year of Class 2 contributions is paid back after you retire in only about 7½ months of increased retirement pension.
I agree. I paid voluntary contributions for a several years, after not considering it for decades. (As OP indicates, when you’re younger or struggling financially, it’s often not an option.) Then, I delayed taking my British pension till I was 68. Now, my state pension is really a significant contribution to my income. And, it comes every four weeks - 13 payments every year! Much better than monthly!!
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Old Jun 23rd 2022, 9:01 pm
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Default Re: Should I make voluntary contributions to national insurance?

Originally Posted by ArizonaTrail View Post
Thanks for all this info. I agree it seems unlikely but worth checking into. I'll get the account and take a look. Congrats on your contribution history, tht. Sometimes all this putzing around in online forums actually pays off!
Check both the NI contributions and “Your State Pension Summary” page

Looking at mine now I need 10 more years voluntary contributions . That will increase mine by about GBP 53 a week… that’s GBP 2750 a year for what is going to be about GBP 1600 total or so assuming the annual amount does not increase to much from the GBP 153 now… that means those extra 10 years of payments will be paid back in 7 or 8 months…

My own situation is probably a corner case but I have a handful of years that are full/max from paid employment in the UK for NI and SS in the US because I was commuting and paid the max NI and SS on the same income. I still don’t know how that will be viewed from a WEP perspective…
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Old Jun 24th 2022, 4:12 am
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Default Re: Should I make voluntary contributions to national insurance?

Originally Posted by ArizonaTrail View Post
Hi all, I grew up in England and went to university there, worked a few minor jobs over the summers. Immediately after uni I left for the US. I'm 42 now and wondering if I should be making voluntary contributions to national insurance? I did get a call from a government entity in 2009 asking if I wanted to make voluntary contributions but seeing as I was a struggling grad student at the time, I didn't have a dime to spare. Any thoughts on this from this insightful group? My wife mentioned a British expat friend of ours who has been dutifully making voluntary contributions and posed the question of whether I should be doing it too.
You may not meet the criteria to make contributions if you haven't paid in for three years (if memory serves) so you'll need to check with them first what your status is, which can be done over the phone or on the website.

Keep in mind UK State pensions do not keep up with the real rate of inflation (I have written about this) - it might be a useful top up to existing retirement plans at best these days, but I wouldn't view the State pension as something to rely on if you're able to make your own plans - which at 42 you would still have two decades to grow your hard earned money assuming you retire post 60 like most people do.

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