Pension from UK due in 8 months. Newbie.

[Mike Teavee]

9 hours ago, pauleddy said:

I'm confused.  I have lived and worked (and rested) in Bangkok for 16 years but I did work in the NHS and teaching since the 1970s. The DWP online tells me I have 32 complete years but I may top up to 35 years. As I was working for the state for over 30 years, are these top-ups Type 3 or Type 2?

 Which is the best one to have?

I am also confused because 4 people have now told me not to top-up for the years before 2017--but The DWP shows that I have about 10 or 12 missing years (here?) and seem to be inviting me to pay 750 gbp for each of the years (total 9.000 pounds I estimate). However, the DWP says that the maximum I can ever get is 175 quid pw. So is it true that paying 9,000 is "dead money" and I should only pay the 3 years seemingly "on offer", which will be 2100 pounds. It seems that doing this will lift me from 155 pounds to 175 pounds, so I am "in profit" after 3 years or so.

 

I dont know why they say I can pay back 9,000 for many years away, but by paying 2100 gbp I can get the max pension possible.

 

Is it in case I have a social guilt complex?

 

 

Eddy

I believe the rules were changed so if you were close to retirement age you could back pay up to 10 years NI but I can't find the definitive rules around this, closest I could find is https://www.gov.uk/voluntary-national-insurance-contributions/deadlines#:~:text=You can usually pay voluntary,is 5 April each year.&text=You have until 5 April,ago%2C depending on your age.

Normally it is 6 years + the current Tax Year 

 

Speak to HMRC https://www.gov.uk/government/organisations/hm-revenue-customs/contact/national-insurance-enquiries-for-employees-and-individuals and make sure to explain to them that you were working in Thailand for the years that you want to back pay, they should let you repay this at Class 2 rates which are currently 12 - 15GBP per month (Class 3 is 15.30 GBP per week)

 

I can think of no good reason, besides being a good citizen but you've done that by years of service in the NHS ???? why you would pay more than the 35 years as you wont see any (non-karmic) rewards for it ???? 

 

Do note that government (e.g. NHS) pensions have some different rules so again, best to check with them. 

 

 

It's up to you whether you tell them that you're living here now & plan to remain here once you get to State Pension age as this would mean your pension will be frozen at the rate you 1st get it, for me it was worth becoming non-UK resident for tax purposes as soon as possible  & the tax position on private pensions (I believe it's zero tax, at most it's 20%) make it worth more to me than the annual pension increase. 

 

 

Edited September 1, 2020 by Mike Teavee

[normanx1234]

You can get a detailed pension forecast (with contribution years) by setting up a personal tax account with HMRC:

 

https://www.gov.uk/personal-tax-account

 

Pension can be applied for online:

 

https://www.gov.uk/get-state-pension

 

See here for the implications of working or living overseas:

 

https://www.gov.uk/new-state-pension/living-and-working-overseas

[Dene16]

10 hours ago, Mike Teavee said:

You don't need a job to pay AVCs, so why don't you just continue to pay for another 6 years

Congratulations on only having to pay class 2 rates (looking at the criteria it seems because you were abroad/not living in the UK) unfortunately i am stuck at having to pay class 3 which is £15 per week which is where my £800 comes back to haunt me.  

I presume you do realise your pension will be frozen if you continue to live abroad from its onset?

 

My pension is going to be £30 short of the £175 so as long as i live 3 years past my pension begin date it will be worth paying it but as i don't know what exactly i will be doing yet i am holding off on paying it

[Mike Teavee]

2 minutes ago, Dene16 said:

Congratulations on only having to pay class 2 rates (looking at the criteria it seems because you were abroad/not living in the UK) unfortunately i am stuck at having to pay class 3 which is £15 per week which is where my £800 comes back to haunt me.  

I presume you do realise your pension will be frozen if you continue to live abroad from its onset?

 

My pension is going to be £30 short of the £175 so as long as i live 3 years past my pension begin date it will be worth paying it but as i don't know what exactly i will be doing yet i am holding off on paying it

It sounds like you're only 6 years short which you can catch-up on anytime so I don't blame you seeing how it goes, my plan is to continue to pay while they say I have a shortfall as it's very possible that this is due to me being contracted out for most of my career (+ self employed for a couple of years), this will result in me having 41 years contribution but as I'm only paying about £154 a year, the extra 6 years is only a bit more than some guys are having to pay to catch-up 1.  

 

I do know my pension will be frozen BUT being non-UK resident means:-

• I don't have to pay tax on my private pension
• I don't have to pay any additional tax on any dividends if I go over the Higher Rate tax threshold
• No Capital gains tax on any shares I sell (all my non-property assets are exempt from CGT after 5 years & anything I buy since leaving the UK is exempt immediately, I've been non-resident for 12 years so that means all of my non-property assets are exempt) 

 

So it's a non-brainer for me to stay non-resident, frozen pension or not. 

 

[cleopatra2]

13 hours ago, Mike Teavee said:

It sounds like you're only 6 years short which you can catch-up on anytime so I don't blame you seeing how it goes, my plan is to continue to pay while they say I have a shortfall as it's very possible that this is due to me being contracted out for most of my career (+ self employed for a couple of years), this will result in me having 41 years contribution but as I'm only paying about £154 a year, the extra 6 years is only a bit more than some guys are having to pay to catch-up 1.  

 

I do know my pension will be frozen BUT being non-UK resident means:-

• I don't have to pay tax on my private pension
• I don't have to pay any additional tax on any dividends if I go over the Higher Rate tax threshold
• No Capital gains tax on any shares I sell (all my non-property assets are exempt from CGT after 5 years & anything I buy since leaving the UK is exempt immediately, I've been non-resident for 12 years so that means all of my non-property assets are exempt) 

 

So it's a non-brainer for me to stay non-resident, frozen pension or not. 

 

UK non resident does not mean no UK tax liability.

Non residents are still liable for tax on UK sourced income. 

There maybe cases where UK income is exempt .However no general rule about being UK non resident and no UK tax exist.

[Andrew Dwyer]

9 minutes ago, cleopatra2 said:

UK non resident does not mean no UK tax liability.

Non residents are still liable for tax on UK sourced income. 

There maybe cases where UK income is exempt .However no general rule about being UK non resident and no UK tax exist.

Indeed I was non-resident for 20 years and still paid my tax ( U.K. based company ), luckily I was able to claim that back yearly.

[johnray]

Ask for a personal records request ''Subject Access Request'' then mail it back to them.  The scum already know everything you have done, and they still ask.  There's literally offices just to know what people are doing, and they still ask stupid questions.

[Mike Teavee]

1 hour ago, Andrew Dwyer said:

Indeed I was non-resident for 20 years and still paid my tax ( U.K. based company ), luckily I was able to claim that back yearly.

I was working for a UK Bank so the 1st year of working overseas I was being paid an income from the UK paid  taxes in Singapore & the UK so was able to claim the UK taxes back (Income Tax in SG is around 11-15% depending on how much you earn, better than 40% & no NI to pay... I eventually caught up at Class 2) I then moved over to the Singapore company so just paid tax there but after the 1st year was able to get Non-UK Resident status for Tax purposes which meant things like there is no withholding tax on the rental income from my house (NR1 form https://www.gov.uk/tax-uk-income-live-abroad/rent which you can get if you live outside of the UK for 6 months without being non-resident for tax purposes) but I would still be taxed on this if it took me over the lower basic rate tax threshold

 

I complete a tax return every year anyway as I had a limited company for a few years & just give the details to my old accountant to process for me.   

 

Edit: For those that don't know how Tax is paid in Singapore, you're paid your gross salary each month & pay the previous year's tax the following May as either a lump sum or 10 interest free monthly instalments, the company paid the Singapore Tax bill & I paid them back when I got the refund from the UK, IIRC I was approx £21,000 better off net ???? ) 

  

 

1 hour ago, cleopatra2 said:

UK non resident does not mean no UK tax liability.

Non residents are still liable for tax on UK sourced income. 

There maybe cases where UK income is exempt .However no general rule about being UK non resident and no UK tax exist.

I'm not saying UK tax doesn't exist (indeed I'm saying I would need to pay tax on rental income if I went over the thresholds) but Dividends are taxed at source & if you are non-resident for tax purposes, that is all you pay irrespective if they take you into a higher tax bracket so no (additional) tax to be paid there.  

 

I was surprised to learn that unless you were an ex-civil servant you don't need to pay tax on your Pension, but straight from the horses mouth (or website ???? )... 

Tax when you live abroad

If you live abroad but are classed as a UK resident for tax purposes, you may have to pay UK tax on your pension. The amount you pay depends on your income.

 

If you’re not a UK resident, you don’t usually pay UK tax on your pension. But you might have to pay tax in the country you live in. There are a few exceptions - for example, UK civil service pensions will always be taxed in the UK.

 

https://www.gov.uk/tax-on-pension/tax-when-you-live-abroad#:~:text=If you live abroad but,UK tax on your pension.

 

Apparently you get a certificate from HMRC to say you're non-resident for Tax Purposes and your private pension provider pays you the gross amount - I'm yet to do this as I'm "Only" 54 & my private pensions kick in at 60 but is something that I will be confirming with a financial adviser when I have the discussion about whether to take my pension at 55.

 

Though not the point here, you're only liable for Tax in Thailand if the money transferred over was earned that year, which in my case won't be so no Tax liability here either.... 

 

 

I'm assuming we're agreed on the Capital Gains Tax (None on any non-property assets purchased since becoming NRfTP or any that were purchased at least 5 complete tax years before becoming NRfTP).

 

Edited September 2, 2020 by Mike Teavee

[treetops]

On 9/1/2020 at 2:31 AM, normanx1234 said:

You can get a detailed pension forecast (with contribution years) by setting up a personal tax account with HMRC:

 

https://www.gov.uk/personal-tax-account

Every working age Brit should do this if they haven't already.  It lets you see at a glance your state pension forecast, your complete National Insurance records year by year, apply for a tax rebate if applicable, access Self Assessment, and also some benefits services and more.

 

My gripes with it would be it takes too long to update (mine is only showing NI record until April 2019) and the figure they tell you to expect from being Contracted Out is a nonsense.

[pauleddy]

6 hours ago, treetops said:

Every working age Brit should do this if they haven't already.  It lets you see at a glance your state pension forecast, your complete National Insurance records year by year, apply for a tax rebate if applicable, access Self Assessment, and also some benefits services and more.

 

My gripes with it would be it takes too long to update (mine is only showing NI record until April 2019) and the figure they tell you to expect from being Contracted Out is a nonsense.

I worked for the NHS for nearly 20 years which means (I just called the DWP one hour ago) that I was partially contracted out. The DWP man told me that my normal state pension is not affected in any way.  despite working and living here and in other places he checked me very efficiently and advised that, despite having 13 years of gaps in some form or other, I can hit the max OAP by paying back just 4 years. The cost will be 3,000 pounds. Im sending it tonight. It will take about 3 years to be "in profit" but I think it's a very good deal. If I had worked for a Hong Kong bank for 20 years then I would be contracted out, so the amounts could be affected. Not sure.

[Nout]

You do not have to provide a list of all your jobs. They have list of all your NI contributions. The sum of 144 pounds a month suggests you missed a few years so will not get the full pension. But you need to do nothing. You might want to ask DWP if you can pay off a back log of missed contributions and how much it would cost.