Important discussion of Uk State Pension Voluntary Contributions

[gamlangjai]

Hello

Sorry if this is not in the correct forum to ask. Does anyone know if the UK govt passed a new law which was meant to give a full pension after just 30 years contributions? Before I think you had to have at least 40 (five years credits you could miss) before recieving a full pension at 65. This would mean ex pats not having to make volluntary payments if they like me have over 30 years but fall short of the old requirement. Have not seen any news of this law since last year.

[chickenslegs]

Hello

Sorry if this is not in the correct forum to ask. Does anyone know if the UK govt passed a new law which was meant to give a full pension after just 30 years contributions? Before I think you had to have at least 40 (five years credits you could miss) before recieving a full pension at 65. This would mean ex pats not having to make volluntary payments if they like me have over 30 years but fall short of the old requirement. Have not seen any news of this law since last year.

A friend of mine recently got his pension forecast.

The letter definitely indicated that only 30 years of contributions are needed for the full pension.

Previously, 40 years were needed.

This will be annoying to those who have been paying voluntary contributions to 'make up' their full pension.

I will be requesting a pension forecast myself, just to make sure.

[chickenslegs]

Just looked at the uk pensions website.

Due to updating their systems with the new rules, you can't get a pension forecast unless your pension is due very soon.

But, for the changes - look at this link http://www.thepensionservice.gov.uk/pensions-reform/home.asp

Only 30 years contributions needed if your pension is due after 6 April 2010.

Good News.

[Penkoprod]

A friend of mine recently got his pension forecast.

The letter definitely indicated that only 30 years of contributions are needed for the full pension.

Previously, 40 years were needed.

This will be annoying to those who have been paying voluntary contributions to 'make up' their full pension.

I will be requesting a pension forecast myself, just to make sure.

Does this letter mention any figures?

Cause heres what i dont undersand:

Government after government, for year after year have been telling us that the system (in their words) is unsustainable in its present form. This "present form" was a full pension after 44 years contributions/credits

So, this crowd we have in government at present set about reforming it............by telling everyone they will be entitled to a full pension after only 30 years!!!!!

Dont seem to be "sustainable" to me, so wheres the sting in the tail, i keep asking myself

Also, the fact that there is a downward pressure on wages and therefore a shortfall in contribution levels,so..........wait for a sting in the tail somewhere in the future, perhaps

Penkoprod

[gamlangjai]

[quote Dont seem to be "sustainable" to me, so wheres the sting in the tail, i keep asking myself

Also, the fact that there is a downward pressure on wages and therefore a shortfall in contribution levels,so..........wait for a sting in the tail somewhere in the future, perhaps

Penkoprod

Interesting and it will cost. Maybe partly offset by the law Brown brought in a couple of years ago where all personal pensions are taxable (even if not over the personal allowance I think) after a lifetime amount recieved is reached. For me this will be in just a few years. What they give with one hand they will surely take away with another

[JohnC]

The sting in the tail is that retirement age for women will be raised to 65 from 2010 depending on date of birth. For both men and women the state pension age will be raised in increments until it reaches 68, this process will start in 2024. If you are aged 65 after 6th April 2010 then yes you only need 30 years contributions to receive the full state pension, any payments made under that 30 years will entitle you to a pension pro rata. If (like me) you have made more than 30 years payments there will be no refund! The other point that has been missed here and is of interest to ex pats is the extra money claimed for a spouse or civil partner (known as Adult Dependecy Increase) will no longer be available to new claiments after 6th April 2010. Those already in receipt at that date will be able to continue claiming until 2020 at the latest.

Those who reach retirement age after 6th April 2010 and have a dependent partner can apply for pensions credits which as I understand it will be means tested and its not clear how people living outside the European Union will be able to qualify.

[davejonesbkk]

I haven;t lived/worked in the UK for over 5 years now, but I am registered as unemployed and living at home with my parents and my father still pays my national insurance, if I did this for another 25 years (I'm 27 now) does this mean I would be able to claim a pension even if I had stayed in Thailand all of that time?

[JohnC]

You cannot be registered as unemployed and be out of the country for more than two weeks in addition you have to sign on every two weeks even if you are not claiming any benefit otherwise you will not be considered unemployed. In addition if you are registered unemployed your NI is paid for you so why would your father be paying additional contributions? The other factor to consider is that all government depts now share information therefore at some point you will have left the country and be noted on a PC somewhere and you are hoping your father will live for another 27 years and pay your contributions?? I think you may have a problem at some point in the future proving your residency but that is only my thoughts, time will tell.

[GuestHouse]

The MINIMUN qualifying years has been set at 30 years of contributions - This was done to help women who it is recognized were loosing out under the old 40 year rule. The CATCH is that you if you are living and working in the UK you do not get to choose not to pay after 30 years of contribution, just that after 30 years of contributions you are guaranteed a full pension.

Where it helps expats is, they 30 year rule enables an expat to build a full state pension with 30 years of contributions, and then stop paying any more.

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A point that the doom mungers miss when predicting that the government will not pay is, while they pick up the point there will be more pensioners in the future, they miss the point that these pensioners will also be 'VOTORS', and as the US Democrats found out, it doesn't pay to ignore the Grey Vote.

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From a personal point of view, I've been an expat for around 20 years and I pay Voluntary NI Contributions, this dispite having a final salary pension scheme and other pension savings. I take the view that the UK State Pension available through paying around 300 pounds a year is a bargain - I've yet to see anyone come up with a savings scheme that provides an equivelant pension for life based on such low premiums.

Also, for those predicting that the UK State Pension will not be available, they neglect to say how else they would fund retirement - Whatever your pension saving plan is, bolting on a UK pension at such low premiums makes very good economic sense.

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Can the UK afford to Pay Pensions?

Well the quicker we get rid of scrounging scum claiming unemployment and welfare benefits from overseas the sooner we'll be able to fund pensions for people who have CONTRIBUTED.

[Maigo6]

This site may prove useful to many here.

http://www.fool.co.uk/pensions/pensions.aspx

[boiledegg]

Can the UK afford to Pay Pensions?

Well the quicker we get rid of scrounging scum claiming unemployment and welfare benefits from overseas the sooner we'll be able to fund pensions for people who have CONTRIBUTED.

Overall Im taxed about 50% inc council tax, fuel duty, VAT on goods etc...., so i should fcuken hope they can afford to pay me a pension.

As for people being scroungers you mentioned paying 300GBP a year is a great deal, well so is living a life on benefits.

[davejonesbkk]

Johnc - I am not claiming benefits or anything and I am not registered with the unemployment agency what I meant was my current address is my parents and I haven't worked in the UK for years and I am not registered with the UK embassy here. My father said he my NI was being paid and I haven't questioned him any further on that. What I want to know is, if I (or someone else on my behalf) pays my NI for the next 'x' amount of years can I legitimately collect a pension when I'm 65?

Edited June 19, 2008 by davejonesbkk

[Prakanong]

Johnc - I am not claiming benefits or anything and I am not registered with the unemployment agency what I meant was my current address is my parents and I haven't worked in the UK for years and I am not registered with the UK embassy here. My father said he my NI was being paid and I haven't questioned him any further on that. What I want to know is, if I (or someone else on my behalf) pays my NI for the next 'x' amount of years can I legitimately collect a pension when I'm 65?

Yes but like other expats you register you are oversea's and not paying tax in the UK and then its the 300 odd quid Guesthouse mentions per year

[distortedlink]

Just looked at the uk pensions website.

Due to updating their systems with the new rules, you can't get a pension forecast unless your pension is due very soon.

But, for the changes - look at this link http://www.thepensionservice.gov.uk/pensions-reform/home.asp

Only 30 years contributions needed if your pension is due after 6 April 2010.

Good News.

Absolutely correct.

[Neeranam]

I haven;t lived/worked in the UK for over 5 years now, but I am registered as unemployed and living at home with my parents and my father still pays my national insurance, if I did this for another 25 years (I'm 27 now) does this mean I would be able to claim a pension even if I had stayed in Thailand all of that time?

[Neeranam]

I've paid about 5 years of NI. I haven't paid any for over 15 years. If I were to start paying, how much would it be approximately per month?

Is there any chance that they'll lower it to 20 year in 20 years time?

Edited June 19, 2008 by Neeranam

[boiledegg]

I've paid about 5 years of NI. I haven't paid any for over 15 years. If I were to start paying, how much would it be approximately per month?

Is there any chance that they'll lower it to 20 year in 20 years time?

You can make back dated payments.

Give them a call theyre pretty good at answering questions and theyre native English speakers.

Im sure if you turn up at Heathrow when youre 65 theyve give you something.

[cmsally]

I believe the deadline for making a chunk of backdated payments is April 2009.

Sorry I can't remember details, so check their website to see if this is correct and what the details are.

If anyone finds the link please post.

I was reading about back payments a few months ago and have got that stuck in my mind but can't remember exactly where I read it.

[GuestHouse]

I've paid about 5 years of NI. I haven't paid any for over 15 years. If I were to start paying, how much would it be approximately per month?

Is there any chance that they'll lower it to 20 year in 20 years time?

Neerham, you'd need to check the exact rule with the Pension Service, but when I made back payments the rule was that you can back pay for seven years from the date you make payment and that the payments you make are at the rate you would have paid had you paid on time.

So from memory, you now can pay back as far as 2001 and you would make payments for 2001 at the rate payments where in 2001 - 2002 payments at 2002 rate etc.

That may have changed since the 30 year rule came into effect so do check.

[dbrenn]

I've paid about 5 years of NI. I haven't paid any for over 15 years. If I were to start paying, how much would it be approximately per month?

Is there any chance that they'll lower it to 20 year in 20 years time?

Neerham, you'd need to check the exact rule with the Pension Service, but when I made back payments the rule was that you can back pay for seven years from the date you make payment and that the payments you make are at the rate you would have paid had you paid on time.

So from memory, you now can pay back as far as 2001 and you would make payments for 2001 at the rate payments where in 2001 - 2002 payments at 2002 rate etc.

That may have changed since the 30 year rule came into effect so do check.

Interesting topic, and as a non-resident UK national I have often thought of making these NI back payments / payments, just in case my life does not go according to plan and (God forbid) I end up, broke and old, back in the UK. Does anyone have the contact details on how to register and pay the contributions? WIth this new 30 year rule, I could sqeeze in the full pension even now.

[astral]

Hello

Sorry if this is not in the correct forum to ask. Does anyone know if the UK govt passed a new law which was meant to give a full pension after just 30 years contributions? Before I think you had to have at least 40 (five years credits you could miss) before recieving a full pension at 65. This would mean ex pats not having to make volluntary payments if they like me have over 30 years but fall short of the old requirement. Have not seen any news of this law since last year.

This is correct.

I recommend that you contact HM Revenue and Customs,

BP 1301, Benton Park View, Newcastle upon Tyne, NE98 1ZZ

and they will advise you about your pension.

I found that I am fully paid up and no more voluntary payments are necessary.

[GuestHouse]

Important - If you hold UK State Pension Rights - This Could Cost You Money.

In response to a question asked by Neerham on the thread discussing UK National Insurance Payments, I did a bit of digging around and turned up something that impacts all Expats below the age of retirement who hold UK Pension Rights.

As is being discussed elsewhere the Law has changed with respect to the number of 'Contribution Years' required to get a full UK state Pension - People Holding UK State Pension Rights need now only make 30 years of contributions to receive a full UK State Pension.

As in the past you are able to make 'back payments' for years you did not contribute. Perhaps the years you have been in Thailand.

But there is now a time limit at the bottom of page 3 in this UK National Insurance - Voluntary Payments Guide there is a statement that Voluntary Payments must be made before 6th April 2009

You need to be aware of this and consider if you want to make payments - Time is running out on this so give it some urgent thought.

My personal view is that this is a bargain that one ought not to miss.

Edited June 20, 2008 by GuestHouse

[JohnC]

If people read my op thye could have found the answers to their questions by following the link! However, NI is dealt with by http://www.hmrc.gov.uk/nic/background-nic.htm. so follow that and you should get some answers.

Is there any chance that they'll lower it to 20 year in 20 years time?

Next to zero! this is the first change since the welfare state was introduced in 1948! so dont hold your breath!

Johnc - I am not claiming benefits or anything and I am not registered with the unemployment agency what I meant was my current address is my parents and I haven't worked in the UK for years and I am not registered with the UK embassy here. My father said he my NI was being paid and I haven't questioned him any further on that. What I want to know is, if I (or someone else on my behalf) pays my NI for the next 'x' amount of years can I legitimately collect a pension when I'm 65?

This is more complex than it looks, you want to apy contributions for the next xxx years! on the face of it that would appear reasonable, my concerns were (are) if you reenter the country at any point then leave again you can guarentee that it will be logged on a government database which could be shared across depts. Now I know its a bit orwellian to think they would check on your movements but as we see daily things do change within government depts especially when it comes to paying out money so before committing yourself to 20 years of payments be sure you can claim when the day finally comes. Take the case of people that retire here, like me, worked for 44 years, paid NI & tax, still pay tax on UK pension but when I reach 65 I get my state pension fixed at the rate applicable when I claim it, no annual increases because I live here! But it will still be taxed at the rate set each year in the budget!! Oh and if you live abroad you are only entitled to emergency treatment on the NHS if you fall ill whilst visiting the UK!!! end of rant

[gamlangjai]

I haven;t lived/worked in the UK for over 5 years now, but I am registered as unemployed and living at home with my parents and my father still pays my national insurance, if I did this for another 25 years (I'm 27 now) does this mean I would be able to claim a pension even if I had stayed in Thailand all of that time?

I read in the international express yesterday of a guy who had made only a few years contributions as he enmmigrated years ago. However he was told he was entitled to something and to fill in the forms on reaching 65. He was then told he would get nothing as he had not worked in the UK for the past 11 years. I wonder how this might affect some here as I never heard of this one before, assuming the story is correct. Surely many self employed will just stop paying contributions when the 30 years is reached?

[JohnC]

Surely many self employed will just stop paying contributions when the 30 years is reached?

Not an option, if you work you pay even past the thirty year mark as was always the case when you reached 60 with maximum contributions, if you continued working you continued paying with no increase in pension benefits.

[bratpack]

There are certain ways that he will get caught doing this.Cannot say no more but thailand is number 2 that the government are looking at.Number 1 is south wales where it is the worst in uk.

[scotwumman]

I would consider this excellent advice as it and it contains invaluable links. It might be a consideration certainly money-wise for some but in lots of cases some future security could be just what's needed to give some peace of mind.

Speaking as a u.k. resident pensioner the amount for female is around £100 - males app £20.00 more (grrrh!) weekly. It is worth remembering that this is your entitlement if granted and living abroad you have not been a drain on the u.k. economy drawing rent council tax benefits etc. as a vast majority of people are doing.

It may also be worth remembering to keep this to yourself if by any chance you have been on the generous side to those around you who could just possibly take advantage thinking this is a lot of money. It is not and will not keep up with the rate of inflation here in the u.k. or in Thailand.

[Forkinhades]

Surely many self employed will just stop paying contributions when the 30 years is reached?

dam_n right, I certainly will, mind you its only £2.20 a week for the Self Employed

If you are currently working in the UK, you can backpay up to 6 years.

Just write to NI centre, address posted in this thread somewhere, and you can ask them for NI payments history, it will take between 4 - 6 weeks, but you will get it, as I have recieved mine, and if you have missed any payments in any given year, they will give you a date that you can by in order to recieve the credits, after that date you cannot receive the credit.

[Maestro]

...retirement age for women will be raised to 65 from 2010 depending on date of birth...

What is the retirement age at present?

[JetsetBkk]

Thanks for the tip and link, Guesthouse. In the last forecast I received I was told I needed to pay something like 360GBP to make up a year that wasn't complete.

Since the forecasts have not been available for a while, I haven't been looking at the web site and haven't done anything about the short fall.

But I will now.