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UK National Insurance contributions: what happens after you move?

UK National Insurance contributions: what happens after you move?

Old Jan 10th 2011, 1:27 pm
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Default UK National Insurance contributions: what happens after you move?

As my husband and I are getting closer to the finishing line of our CR-1 visa journey, we've started thinking about some of the more practical matters of moving to the US.

Both of us have been living in the UK for the past 3.5 years and are nowhere close to retirement. By the time we move to the US, I'll have almost 3 years' worth of NI contributions in the UK and he'll have close to 2 years' worth, both from full time employment.
None of us has taken any additional pension schemes with our employers a)because we preferred the extra cash at that stage, b)because we knew we'd be looking to move to the US relatively soon, and c)because none of our HR departments were able to reliably answer the question of what happens to the funds if you move country.
So the only contributions we both have are to NI through our employment.

My question is: are these contributions somehow transerrable to the States or have we pretty much "wasted" 2-3 years' worth of NI contributions that will never count toward our retirement (in the very distant future)?
If they are transferrable, how can we go about arranging this?

Many thanks in advance for your help.
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Old Jan 10th 2011, 3:07 pm
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Default Re: UK National Insurance contributions: what happens after you move?

I think they just stay in limbo and then when you reach retirement age you can start receiving them. But I'm no expert.
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Old Jan 10th 2011, 4:04 pm
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Default Re: UK National Insurance contributions: what happens after you move?

You cant transfer NI. You also need to understand that NI is not a pension contribution it is a social contribution that covers unemployment, NHS as well as pension. If you had taken out a private pension scheme you could have opted out of the pension contribution part if NI and these would have been added to whatever your private pension would have been worth. After 2 years the real amount of money assigned to NI for pension would have been nothing more than a couple of hundred quid.

What happens when you reach state pension age they check to see if you have paid the minimum number of years of contributions and if you have you receive the state pension. if you have not then you get a reduced pension that scales down. If you are entitled to nothing and are below the social line you are then switched to income support.

Don't think of it as having wasted anything, think of it as having contributed to the social state........
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Old Jan 10th 2011, 4:24 pm
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Default Re: UK National Insurance contributions: what happens after you move?

Originally Posted by airways
You cant transfer NI. You also need to understand that NI is not a pension contribution it is a social contribution that covers unemployment, NHS as well as pension. If you had taken out a private pension scheme you could have opted out of the pension contribution part if NI and these would have been added to whatever your private pension would have been worth. After 2 years the real amount of money assigned to NI for pension would have been nothing more than a couple of hundred quid.

What happens when you reach state pension age they check to see if you have paid the minimum number of years of contributions and if you have you receive the state pension. if you have not then you get a reduced pension that scales down. If you are entitled to nothing and are below the social line you are then switched to income support.

Don't think of it as having wasted anything, think of it as having contributed to the social state........
Some of what you have said is incorrect.

You CAN transfer NI towards SS pension in the US - Google "Totalization Agreement". Right now, it's not worth the OP bothering - at such a young age, you never know whether you'll end up going back to the UK.

Also, NI DOES contribute towards pension, and DOES NOT (at least, hardly) contributes towards NHS - the NHS is funded by taxes, mostly.

My recommendation to the OP is do nothing for now, and when you get within maybe 15-20 years of retirement, consider what to do then. You might decide to buy extra years of UK NI contributions, in order to qualify for a US and UK state pension, or you might decide to count your UK NI contributions towards your US SS pension under the Totalization Agreement.

All of this is moot, anyway, because almost undoubtedly, US and UK state pensions rules and reg's are going to change drastically over the next 10-30 years ...
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Old Jan 10th 2011, 4:34 pm
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Default Re: UK National Insurance contributions: what happens after you move?

Originally Posted by dunroving
Some of what you have said is incorrect.

You CAN transfer NI towards SS pension in the US - Google "Totalization Agreement". Right now, it's not worth the OP bothering - at such a young age, you never know whether you'll end up going back to the UK.

Also, NI DOES contribute towards pension, and DOES NOT (at least, hardly) contributes towards NHS - the NHS is funded by taxes, mostly.

My recommendation to the OP is do nothing for now, and when you get within maybe 15-20 years of retirement, consider what to do then. You might decide to buy extra years of UK NI contributions, in order to qualify for a US and UK state pension, or you might decide to count your UK NI contributions towards your US SS pension under the Totalization Agreement.

All of this is moot, anyway, because almost undoubtedly, US and UK state pensions rules and reg's are going to change drastically over the next 10-30 years ...
How things are funded in reality is different from the legislation. The NI contribution is a social charge and covers pension, NHS and social security. This means that despite the fact that we pay 11% of our salary towards it, that does not equate to 11% going into a pension pot. The state pension is a flat rate regardless of the amount of money you have paid in NI over the years.

You don't transfer money under the totalisation agreement, you transfer credits.

I have had the discussion around this with tax advisors in the last couple of days.
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Old Jan 10th 2011, 4:49 pm
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Default Re: UK National Insurance contributions: what happens after you move?

Originally Posted by airways
............ The state pension is a flat rate regardless of the amount of money you have paid in NI over the years.

You don't transfer money under the totalisation agreement, you transfer credits.

I have had the discussion around this with tax advisors in the last couple of days.
This is not the case. Depending on how many qualifying years a person has when they retire, they will get a higher or lower weekly amount. Additionally, when you reach retirement age, you have the option of delaying receiving the pension. This will increase the weekly amount you eventually receive.

I refer to the current situation; as Dunroving says in an earlier post, there are suggestions for radical change to the pension in the future.
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Old Jan 10th 2011, 4:56 pm
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Default Re: UK National Insurance contributions: what happens after you move?

Originally Posted by robin1234
This is not the case. Depending on how many qualifying years a person has when they retire, they will get a higher or lower weekly amount. Additionally, when you reach retirement age, you have the option of delaying receiving the pension. This will increase the weekly amount you eventually receive.

I refer to the current situation; as Dunroving says in an earlier post, there are suggestions for radical change to the pension in the future.
Yes, I know that but the point I was making is that if I earn a million a year and pay in 11% of that I am not going to get an uber pension like I would with a private scheme. I am going to get a pension within a very tight sliding scale that is pretty miniscule compared to the contribution. The UK pension is paid in a very narrow band despite the input made over the years as NI is a multifunction social tax not just a pension contribution.

The contribution the original poster has made to the pension part is does not equate to the money they have paid in.

Any other discussion is an exercise in pedantry.
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Old Jan 10th 2011, 5:08 pm
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Default Re: UK National Insurance contributions: what happens after you move?

I really don't think anyone is being pedantic here, just sharing information. I understand your point about the flat rate now -- it is a flat rate per qualifying year.
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Old Jan 10th 2011, 6:36 pm
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Default Re: UK National Insurance contributions: what happens after you move?

Thanks everyone! Yes, I was mainly wondering about the qualifying years and whether we could count them towards the respective US qualifying years. Sorry I didn't word it clearly. The actual NI contributions are probably just a few hundred quid, indeed...

I googled "totalization agreement" and some very helpful websites came up. Thanks for suggesting that - I wasn't even aware of the name of this agreement

And yes, we don't even know where we'll be living when we are at retirement age, let alone whether a state pension system will still exist then
But it's good food for thought and we should definitely plan for a private pension scheme too once in the US!
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Old Jan 10th 2011, 6:43 pm
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Default Re: UK National Insurance contributions: what happens after you move?

Originally Posted by airways
Yes, I know that but the point I was making is that if I earn a million a year and pay in 11% of that I am not going to get an uber pension like I would with a private scheme. I am going to get a pension within a very tight sliding scale that is pretty miniscule compared to the contribution. The UK pension is paid in a very narrow band despite the input made over the years as NI is a multifunction social tax not just a pension contribution.

The contribution the original poster has made to the pension part is does not equate to the money they have paid in.
Any other discussion is an exercise in pedantry.
Who said it was? And who said the OP earned a million a year? And who said you transfer money, not credits? Not me ...

I don't see the pedantry in saying the following statement is incorrect (quote): "NI is not a pension contribution " .... ? That sounds like a pretty unambiguously incorrect statement to me.

My advice to the OP is unchanged, you can continue engaging in pedantic discussion of the semantics if you want.

Last edited by dunroving; Jan 10th 2011 at 6:46 pm.
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Old Jan 10th 2011, 6:46 pm
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Default Re: UK National Insurance contributions: what happens after you move?

Originally Posted by dunroving
Who said it was? And who said the OP earned a million a year?

I don't see the pedantry in saying the following statement is incorrect (quote): "NI is not a pension contribution " .... ? That sounds like a pretty unambiguously incorrect statement to me.

My advice to the OP is unchanged, you can continue engaging in pedantic discussion of the semantics if you want.
That sort of behaviour is uncalled for. Don't partial post to prove your point.

Here is what I actually wrote.

You also need to understand that NI is not a pension contribution it is a social contribution that covers unemployment, NHS as well as pension.
I used a million as a year to demonstrate that despite putting in a £110k a year in a NI you will still only get the same state pension as someone who puts in £10k a year.
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Old Jan 10th 2011, 6:47 pm
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Default Re: UK National Insurance contributions: what happens after you move?

Originally Posted by airways
That sort of behaviour is uncalled for. Don't partial post to prove your point.

Here is what I actually wrote.



I used a million as a year to demonstrate that despite putting in a £110k a year in a NI you will still only get the same state pension as someone who puts in £10k a year.
Get off your high horse. I didn't partial post, I quoted the relevant part of your original post (to which I was responding originally) in its entirety.

I think someone got out of the wrong side of the bed this morning.
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Old Jan 10th 2011, 6:51 pm
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Default Re: UK National Insurance contributions: what happens after you move?

Originally Posted by dunroving
Get off your high horse. I didn't partial post, I quoted the relevant part of your original post (to which I was responding originally) in its entirety.

I think someone got out of the wrong side of the bed this morning.
No you quoted a part of my post to make your point by using it of context. NI is not solely a pension contribution. It is a social contribution.

Are you going to extract that 'NI is not a pension contribution' from that to make your point?

Lets leave it at that before we fall out.
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Old Jan 10th 2011, 6:52 pm
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Default Re: UK National Insurance contributions: what happens after you move?

Originally Posted by airways
No you quoted a part of my post to make your point by using it of context. NI is not solely a pension contribution. It is a social contribution.

Are you going to extract that 'NI is not a pension contribution' from that to make your point?

Lets leave it at that before we fall out.
I think you need to get over yourself - and to be quite honest I couldn't care less if we fall out.
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Old Jan 10th 2011, 6:52 pm
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Default Re: UK National Insurance contributions: what happens after you move?

Originally Posted by dunroving
I think you need to get over yourself - and to be quite honest I couldn't care less if we fall out.
Suit yourself.
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