UK - Paying voluntary NI contributions

[partington]

52 minutes ago, simon43 said:

Again, thanks for all the advice.  Since I've forgotten my NI number, the very first thing to do is to apply by post for this - you complete the form online and print that out.

 

Once I have my NI number, I can get a pension forecast and think about voluntary payments.  Class 2 contributions are much less than class 3, and since I was self-employed for most of my working life in the UK, I assume that I will be able to top up using class 2.

 

 

You can only pay Class 2 for years abroad if you were working abroad during those years.  

 

As Class 2 are so much cheaper than Class 3 and yet produce the same pension, they can, and probably will, ask for proof that you were working abroad self-employed during those years, if that's what you claim (otherwise everyone would cheat!). 

 

 It's not based on what you were doing before you left the UK, it's based on what you were doing during the years you are trying to pay contributions for. 

[jacko45k]

36 minutes ago, Chicken George said:

It's definitely 35years.. 100%

 

To get the full basic State Pension you need a total of 30 qualifying years of National Insurance contributions or credits. This means you were either:

• working and paying National Insurance
• getting National Insurance Credits, for example for unemployment, sickness or as a parent or carer
• paying voluntary National Insurance contributions

Source

 

Maybe 99%

Edited September 26, 2017 by jacko45k

[transam]

23 minutes ago, partington said:

You can only pay Class 2 for years abroad if you were working abroad during those years.  

 

As Class 2 are so much cheaper than Class 3 and yet produce the same pension, they can, and probably will, ask for proof that you were working abroad self-employed during those years, if that's what you claim (otherwise everyone would cheat!). 

 

 It's not based on what you were doing before you left the UK, it's based on what you were doing during the years you are trying to pay contributions for. 

The pension claim form has a zillion questions about your employment, from the day you left school plus other stuff so they can calculate what they will give you...Don't know why but I got more than the basic pension and paid class 2 most of my working life with a few years missing.....

[partington]

23 minutes ago, jacko45k said:

 

To get the full basic State Pension you need a total of 30 qualifying years of National Insurance contributions or credits. This means you were either:

• working and paying National Insurance
• getting National Insurance Credits, for example for unemployment, sickness or as a parent or carer
• paying voluntary National Insurance contributions

Source

 

Maybe 99%

Look it's 35 years now. It was 30 years before. If you reached retirement age before they changed it it was 30.

 

There is no doubt about this at all. 

 

Your mistake is because you are confusing what is called "the basic state pension" (claim pre 2016) on the UK Gov websites which needed 30 years, with what they are now calling the "new state pension" (claim after 2016) which DOES NEED 35 YEARS!  You are not claiming the "basic" which is what your quote is about-any claim after 2016 is the "new"!

 

This guide doesn’t apply to you if you’re:

• a man born on or after 6 April 1951
• a woman born on or after 6 April 1953

You’ll need to read about the new State Pension instead.

This guide is also available in Welsh (Cymraeg).

You reached State Pension age before 6 April 2016

The basic State Pension is a regular payment from the government that you can get if you reached State Pension age before 6 April 2016

Edited September 26, 2017 by partington

[Pdavies99]

7 hours ago, transam said:

You are right, they altered it back to 30 years last year, l wonder why...

See below from up to date HM Revenue

 

Your State Pension will be calculated entirely under the new State Pension rules.

You’ll usually need at least 10 qualifying years on your National Insurance record to get any State Pension.

You’ll need 35 qualifying years to get the full new State Pension.

You’ll get a proportion of the new State Pension if you have between 10 and 35 qualifying years.

Example

You have 20 qualifying years on your National Insurance record after 6 April 2016.

You divide £159.55 by 35 and then multiply by 20.

Your new State Pension will be about £91.17 per week.

 

Having shown you that, simply write to them and ask for a forecast, I know you dont want to contact them but thats the only correct forecast etc.

 

Finally I have found that if you eventually know how much HM want to catch up years shortfalls, you need to live to about 80 years to get ahead of additional payments, is it worth it?

Edited September 26, 2017 by Pdavies99

[Pdavies99]

1 hour ago, transam said:

The pension claim form has a zillion questions about your employment, from the day you left school plus other stuff so they can calculate what they will give you...Don't know why but I got more than the basic pension and paid class 2 most of my working life with a few years missing.....

Additional contributions, CIMPS, COMPS, SP2, SERPS all sometimes top up state calculations for State pensions

[steve187]

its 35 years for the new pension, it was 44 years, then reduced in around 2006 to 30 years but for the new pension it was increased to 35 years.

 

see here- https://www.gov.uk/new-state-pension/your-national-insurance-record-and-your-state-pension

 

class 2 stamps are to be abolished next April , there is a problem with low earning self employed people missing out on qualifying years,.

 

https://www.gov.uk/government/publications/abolition-of-class-2-national-insurance-contributions/abolition-of-class-2-national-insurance-contributions

Edited September 26, 2017 by steve187

[LammyTS1]

(old) Basic state pension is 30 years.

 

New state pension is 35 years.

[amdy2206]

I have been trying to work out the difference between class 2 and class 3 contributions as there is a lot of difference in the cost.

[steve187]

class 2 = £2.80

class 3 = £14.00 ish   both weekly

 

class 2 is for a small group of people, mainly self employed or were self employed class 3 is for anyone

Edited September 26, 2017 by steve187

[naboo]

Re. making back payments, I sent them a form (C something) in July. Their reply arrived in my Thai letterbox last week.

 

I left the UK in 2008, was employed at the time and had made sufficient NI contributions between April 2008 and August 2008 to cover that financial year. I've been working full time in Thailand since. The letter stated they had accepted my claim to make voluntary contributions for the years 2009-2010 through to 2016-2017, that's 8 years of payments (website says you can pay 6, I guess I was allowed to pay more as I'm still 34 years from retirement). All these years were at class 2 rate, so total cost for 8 years was just over GBP1100. Worth just under GBP40 a week, so I will get it back in 30 weeks or so, assuming I live to see it and the rules don't change too much in the meantime.

 

Called them, they asked me a load of questions to check making the payment was the best option for me, they gave me another number who gave me the bank details for the transfer. Made the transfer online from my UK account an hour after having read the letter. Apparently they wil take 6 weeks to add this to my online record. They really are slow at doing everything.

 

For me, at class 2 rates, its a worthwhile investment. At class 3, I might not be so keen, presently that works out at over GBP700/year, I'd need to live 3 years beyond retirement to get money back, and at that point I don't trust the government enough to honour the state pension to make it a worthwhile gamble. I'll make some other investments instead.

 

One question - for two years, I was "contracted out" of the state pension - I still paid NI, but at a reduced rate, as I was contributing to another pension scheme. These two years show up as paid on my record, will this affect my pension? (I forgot to ask this to the helpful lady on the phone.)

[UKresonant]

The years contracted out do have an effect, I've just had a forecast.

 

e.g.

Last years forecast said I had 38 years,but 37 of those were contracted out.This years forecast (now on 39 years at the end of 2016/2017, although this forecast did not seem to have the number of years) says I will need 7 more years to get the full pension of £159 so my 39 years has got me to approx £131 of £159, so after this year, I still need 6 years out of 12 to make contributions, to get the full whack, ie.46 years of contributions!

[jacko45k]

14 hours ago, partington said:

Look it's 35 years now. It was 30 years before. If you reached retirement age before they changed it it was 30.

 

 

Thanks for the clarification.... as I said it also told me I needed more contributions so I didn't grasp it. Perhaps I would have got it had I read the Welsh version.

Edited September 26, 2017 by jacko45k

[steve187]

3 hours ago, johnwf1963 said:

The years contracted out do have an effect, I've just had a forecast.

 

e.g.

Last years forecast said I had 38 years,but 37 of those were contracted out.This years forecast (now on 39 years at the end of 2016/2017, although this forecast did not seem to have the number of years) says I will need 7 more years to get the full pension of £159 so my 39 years has got me to approx £131 of £159, so after this year, I still need 6 years out of 12 to make contributions, to get the full whack, ie.46 years of contributions!

you will/should get a reduced pension due to the ' contacted ' out years. but the private/work pension that you 'contacted' out to will pay the difference.

you do not need to pay any more as you have the required 35 years, but if you do the extra non 'contacted ' out years you will pay will replace that amount of 'contacted' out years, and should give you an increased state pension.

 

its not as straight forward as getting the new amount, as you have made contributions under the old and new schemes, so some sort of calculation will need to take place.

[12DrinkMore]

17 hours ago, steve187 said:

class 2 stamps are to be abolished next April , there is a problem with low earning self employed people missing out on qualifying years,.

 

https://www.gov.uk/government/publications/abolition-of-class-2-national-insurance-contributions/abolition-of-class-2-national-insurance-contributions

 

Thanks for the warning.

 

More goalpost shifting, making it all more complicated and leaving people unsure and more insecure about how the thing functions.

 

 

 

 

 

 

[sometimewoodworker]

22 hours ago, GarryP said:

I have lived in Thailand since 1982 and never paid NI contributions since I left (I think my mum paid a couple of years for me). I have no idea what my NI number is but assume my number will have remained unchanged. Would it be worth while to pay the missing 30 odd years? I highly doubt it, even if it were possible, but would be interested in hearing what you think.  

Get a pension forecast first, you may well have more years than you think.

 

you can not pay 30 years.

 

the old rule was that you could only pay the last 6 years. However with the change in system this has now been changed to permit people to pay more than the last 6 years.

 

each year of contributions  you pay in (up to the maximum) is fully recovered within  4 years of increased pension paid to you

 

1 year costs about £700

it gets you about £237 per year extra

 

conclusion if you are not rich, and will live more than 4 years collecting your pension, pay as much as you can.

 

IT IS AN INCREDIBLY GOOD DEAL. 

[partington]

1 hour ago, sometimewoodworker said:

Get a pension forecast first, you may well have more years than you think.

 

you can not pay 30 years.

 

the old rule was that you could only pay the last 6 years. However with the change in system this has now been changed to permit people to pay more than the last 6 years.

 

each year of contributions  you pay in (up to the maximum) is fully recovered within  4 years of increased pension paid to you

 

1 year costs about £700

it gets you about £237 per year extra

 

conclusion if you are not rich, and will live more than 4 years collecting your pension, pay as much as you can.

 

IT IS AN INCREDIBLY GOOD DEAL. 

I agree. If you don't live in Thailand (as I won't be) this is an investment guaranteed to keep up with inflation, and with a four year turnaround to be pure profit beats almost any investment you could make elsewhere, as it's almost zero risk.

[sometimewoodworker]

1 hour ago, partington said:

I agree. If you don't live in Thailand (as I won't be) this is an investment guaranteed to keep up with inflation, and with a four year turnaround to be pure profit beats almost any investment you could make elsewhere, as it's almost zero risk.

It makes no difference where you live, it's a great deal.

if you live where you get increasing pension it's a fantastic deal.

[LammyTS1]

12 hours ago, johnwf1963 said:

The years contracted out do have an effect, I've just had a forecast.

 

e.g.

Last years forecast said I had 38 years,but 37 of those were contracted out.This years forecast (now on 39 years at the end of 2016/2017, although this forecast did not seem to have the number of years) says I will need 7 more years to get the full pension of £159 so my 39 years has got me to approx £131 of £159, so after this year, I still need 6 years out of 12 to make contributions, to get the full whack, ie.46 years of contributions!

Checked out mine yesterday.

 

I have 24 years, which has got me to £110. I need 11 more years out of 22 to get the £159.

 

5 years I have been short but as this was in the 90's, I am too late now to pay the shortfall.