jmjh

Hi,

I'm moving over in a months time on a IR-1, trying to get all my paperwork in order. One thing I saw vaguely mentioned somewhere is that it is a good idea to set up voluntary NI contributions while in the States. HMRC and DWP websites aren't particularly helpful on this though, and seem to be saying that because there is a reciprocal social security agreement between the US and the US, that there is no need to do this.

What is the recieved wisdom of those of you over in the States already? Is this a waste of time or money, or is it worth it? (I'm in my early 30's with ~8 years paid in to NI - I guess the only bit that would be of benefit will be state pension in 37 years time...)

Thanks

Bob

Plenty of threads on this.

You don't need to do it, but it all depends on your age, so with 20 odd years more to put in before getting a full state pension, at about 150 squid a year, or whatever it is, might be worth it.

Quite a lot of threads that go into WEP as well and how that might affect things.

Personally, I'd say if you're in your 20's, don't bother, if you're in your 40's definitely, but in your 30's it's a toss up, but probably still worth it as it's a bargain if you're eligible to make the contributions.

Giantaxe

I pretty much agree. Contributions aren't age-related so there is no calculation of the "time value of money". Just make sure you start making voluntary contributions early enough that you will have 30 years of contributions before whatever your retirement age will be is reached. And of course this is all predicated on unknowns such as what will happen to qualification for the state pension down the road.

nun

If you think you'll earn 30 NI credits from working in the UK then voluntary NI contributions aren't worth it. But if you don't have a full NI record and will be out of the UK for a long time they are something to consider. If you qualify for Class 2 you'll only pay 130 pounds a year so the are a fantastic deal.

For example, I left the UK at age 25 with only 3 years of NI becuase I was at college. I decided to pay voluntary NI because I wanted to keep up my NI record. It turned out that I stayed in the US and for the last 27 years I've paid voluntray NI; at first it was Class 3, but then the rules changed and allowed me to pay the less expensive Class 2. I'm glad I did this as I now have a full NI contribution record, can stop paying voluntary NI, and will get a full UK state penson at age 66. Also when I retire to the UK there is no need for me to work to earn extra NI credits.

jmjh

Does it have to be 30 continuous years of contributions, or 30 years in total? I think I also saw someone saying that it could be backfilled up to 6 years, right?

nun

30 in total. You can pay in arrears for up to 6 years.

Bluegrass Lass

Can someone provide the phone number or website info on who to contact to set this up? I want my UK hubby to start doing this as every little bit of money come retirement will help.

Giantaxe

http://www.hmrc.gov.uk/ni/volcontr/abroad.htm

And here's the link for how to speak to a human (with a Geordie accent :-)):

http://search2.hmrc.gov.uk/kb5/hmrc/...rd=OLul3tPejl4

nun

Just Google "NI38". The first link will be to the booklet about overseas NI. The application form is at the back.

Bluegrass Lass

Thanks you two!

holly_1948

It is definitely worth it. Think of it as insurance against your plan for your life and career not turning out the way you had hoped it would. Far better value for money than any alternative you could find.

They say god laughs whenever men make plans.

nun

Class 2 NI is certainly a very good deal, but whether you should pay voluntary NI depends on your personal circumstances. If you are only going to be out of the UK for a few years there's really no need to pay voluntary NI now that you get full UK state pension after 30 years of contributions. If the average working life is 45 years you can afford to miss 15 years of NI and still get the full pension. If you think you'll be out of the UK for more than 10 or 15 years or that you'll have a working life less than 40 or 45 years tehn voluntary NI are a good idea.

yellowroom

But no-one can guarantee that the rules won't change and that in the future you may need more than 30 years of contributions to get a full pension?

Certainly since I started my working life, my expected retirement age for the State pension has gone from 60 to 65 to 67. Who knows when I'll actually get it.....

holly_1948

Yes, no-one can predict the future, but historically failure to pay voluntary NI has been very deeply regretted by some who did not.

It amounts to putting some eggs in two baskets (American and British) rather than one. It's all a risk but it has been a much better return than investing all in one country. On the other hand you are presently allowed (since Thatcher) to catch up on six years of arrears, so there is little point in being up to date :-)

Ozzidoc

Closer to 700 quid a year now....still worth it in my books