Southy_SWFC

I am pretty useless with this kind of thing so bare with me.

I was talking to another English person over here recently who advised that I should keep paying something in the UK so that when I retire (a long way away) I still get a UK pension. She said that it's way better than my 401k would be so I should look into it.

I've looked through the pages on here, like the Wiki's, and haven't got any closer to know what I should be doing, if anything.

Could someone point me in the right direction, or explain it as simply as possible to me, please?

Sally Redux

They probably mean voluntary National Insurance contributions. Quite a few threads on it. There's a link in this one:

http://britishexpats.com/forum/usa-5...utions-844095/

MsElui

i think sally is right. its a two stage process. first find out how many years you have already paid for of national insurance by filling out and sending in the form.

Then you can decide is the deficit is worth catching up on. ie you pay some money to top up - in exchange for better payments later. you can only top up a certain amount at any time i believe - so may not be able to do it all now- may have to sperad over a few years?

Pulaski

I just sent in my (paper, by mail) request to make AVCs, including arrears (maximum is six years), this week. Once I hear back I will be able to pay six years of arrears, and then annually thereafter. I will be able to easily reach the 35 years for a "full" UK pension, though likely adjusted downwards by a few pounds because I was contracted out of SERPs for a few years. I will be eligible to get the British state pension without it impinging on my US social security, so making the AVCs is definitely worth doing, at least for me/ in my situation.

Yorkieabroad

Is the 35 confirmed now? I called earlier in the year, and was advised not to pay any more (I'm at the current/old max, whatever that was) until the increase to 35 had received final approval. Must admit, I've not kept up to speed with it as the year has gone on...it's one of my "April jobs".

durham_lad

Yes, it is now official, 35 is the new 30

https://www.gov.uk/new-state-pension/how-its-calculated

Yorkieabroad

Thanks for that....its now back on the calendar for next April!

Sheepdip

Damn, just before we left I checked and had the 30 years needed then. Guess I'll have to start making some AVCs to catch up again

Pulaski

You can usually pay up to 6 years in arrears. I am also planning ahead for the possibility that the "35" could rise further. By the time I reach retirement age, even the age stated today for me when I get there, there will give a theoretical maximum of 51 years of employment, so a further move to 40 weeks or even more can't be ruled out.

unique_boy

Hijacking this...in UK NICs is a fixed percentage of your wage through the PAYE tax system. How do they quantify what you owe in terms of AVC to match what you paid in the UK?

Example you earnt a high salary in the UK paid high NICs...do they base your AVCs on what you were paying when you left the UK and extrapolate that out?

So you could earn the same or higher in the US but pay a lower AVC than you would if you were based in the UK in NICs.

Pulaski

No, you pay Class 2, or occasionally Class 3, fixed rate contributions.

unique_boy

A form of arbitrage....move abroad pay cheaper NIC than you would have when living there...move back and get the same pension.

Pulaski

Er, yes. ..... And if you stay in the US long enough you can accrue enough credits to the US Social Security system to potentially get "full" social security and simultaneously get a "full" state pension in the UK!

unique_boy

Very interesting

Uncle_Bob

both my wife and i would have to pay 6 years of arrears totaling around £1400 a year between us.

I notice once you start claiming then you do not get any annual increase as a resident would.