UK pensions

[Rajab Al Zarahni]

6 minutes ago, nontabury said:

And how many future pensioners here in Thailand, will be encourage by the DWP to pay extra N.I contributions, as I was, yet they forgot to mention, knowing that I lived in Thailand, that my future pension would be frozen.

There are of course many people who do benefit from correcting shortcomings in their NI record and it is good that this is drawn  to their attention 

I have a small gap in my record going back over twenty years ago, yet even without correcting the gap I have 47 full years of contributions  and one part year.  Out of curiosity I asked the DWP to advise me how much it would cost to correct the record and in due course received a letter telling me I could fill the gap with a one off payment of £28.50. I phoned the DWP and asked them what benefit would I gain by making the payment and I was correctly advised that there was no benefit whatsoever. The flaw, as I see it, is the failure of the DWP to make it explicitly clear to the applicant that is no benefit to be gained when they send out any letters about the cost of correcting the shortfall. To the average man in the street it would seem quirky to advise people of a shortfall and identify the payment needed to correct it when no benefit arises as a result of the payment.

[nong38]

March 13th is the Spring Statement from Phil, not much to be seen here now as the Budget is in November, however, the National Living Wage will increase by 4.4% to 7.83 an hour from April 9th whilst the State Pension will rise by 3% from April 6th. If someone on the NLW worked for 30 hours a week they would get 234.9 GBP anyone know what the current State Pension is as a comparison?

Pensioners will get less than the NLW what message are they trying to tell us, don't live-DIE!

[Rajab Al Zarahni]

3 hours ago, nong38 said:

March 13th is the Spring Statement from Phil, not much to be seen here now as the Budget is in November, however, the National Living Wage will increase by 4.4% to 7.83 an hour from April 9th whilst the State Pension will rise by 3% from April 6th. If someone on the NLW worked for 30 hours a week they would get 234.9 GBP anyone know what the current State Pension is as a comparison?

Pensioners will get less than the NLW what message are they trying to tell us, don't live-DIE!

The full rate for the National Living Wage, as from April 2018 will be £7.83 an hour.

An overtime rate is payable after 39 hours a week so 39 hours can be presumed to be full time for the purpose of calculation.

The full rate of the Old Basic State Pension, as from April 2018 will be £125.95 a week.

If this is divided by 39 for the purpose of comparison, the figure would be just a fraction under £3.23 an hour.

Therefore, expressed as a percentage the Old Basic State Pension will amount to 41.25% of the full rate for the National Living Wage.

The same calculation using last years data showed the OBSP to be 41.89% of the NLW. 

It would therefore seem to the case that the government, being sympathetic to our predicament and noting our concerns,  is now providing a positive incentive to all pensioners to die earlier.

 

Edited March 10, 2018 by Rajab Al Zarahni
poor sentence

[evadgib]

https://www.gov.uk/government/news/spring-statement-2018-what-you-need-to-know

[steve187]

On 3/3/2018 at 8:51 PM, i claudius said:

Perhaps they could stop giving child benifit to the children of immegrants from the EU and use the cash to uprate our pensions .especially someone like me who paid in for it for 44 years.

Sent from my [device_name] using http://Thailand Forum - Thaivisa mobile app
 

and the 'children' do not have to be in the UK

[nontabury]

5 hours ago, steve187 said:

and the 'children' do not have to be in the UK

Plus they can obtain child tax relief, child tax credits.

[denby45]

It has been discussed here many times, the rights and wrongs of claiming you are living in the UK when you are really living in Thailand. Now in my case, after living for many years outside the UK, initially I would be very foolish to go back to the UK and declare OK I am now living in the UK so please do not freeze my pension. I will do my first claim in April 2023. I could of course do that very thing, set it all up and then sneak back to Thailand.

 

However in my case there is a very good reason not to do that and it is all about IHT. Now HMRC have guidelines about domicile. They are as follows:

 

HMRC will treat you as being domiciled in the UK if you either:

• lived in the UK for 15 of the last 20 years

• had your permanent home in the UK at any time in the last 3 years of your life

 

At the moment I would be classified as Non-Dom for IHT. Means I would only be liable for IHT on all UK assets above 325,000 quid. As opposed to worldwide assets of domiciled individuals. All overseas assets are exempt and even UK bank accounts held in foreign currency would also be exempt for Non-Dom. 

 

I have no idea when I might die, so I (or rather my heirs) would be risking a huge tax bill should I declare UK residency and then snuff it sooner than later. If I have a good innings then I may reassess the situation a bit further down the line. Obviously I intend to draw down over the years and enjoy my life as best I can. So at some point in the future my total assets will fall below threshold for IHT and it will become worth my while to cheat. I am not saying I will at this point but I do consider the frozen pension to be extremely unfair.   

 

Den

[Oxx]

1 hour ago, denby45 said:

However in my case there is a very good reason not to do that and it is all about IHT. Now HMRC have guidelines about domicile. They are as follows:

 

HMRC will treat you as being domiciled in the UK if you either:

 

• lived in the UK for 15 of the last 20 years

   

• had your permanent home in the UK at any time in the last 3 years of your life

 

You are misunderstanding what you've read.

 

Those criteria mean exactly what they say, i.e. you will be treated as UK domiciled by HMRC if you meet them.  They do NOT mean that you are not UK domiciled if you don't meet them.  (Sorry for the double negative.)

 

Furthermore, HMRC doesn't decide who is domiciled or non-domiciled.  That is a matter for the courts (or the opinion of a QC).

 

Domicile is very hard to lose, and it most certainly isn't simply a matter of living outside the UK for 5 years and selling your home.

 

 

[Orton Rd]

If you can be uprated in some foreign countries but not if you reside in others, how can it not be extremely unfair?

[denby45]

18 hours ago, Oxx said:

 

You are misunderstanding what you've read.

 

Those criteria mean exactly what they say, i.e. you will be treated as UK domiciled by HMRC if you meet them.  They do NOT mean that you are not UK domiciled if you don't meet them.  (Sorry for the double negative.)

 

Furthermore, HMRC doesn't decide who is domiciled or non-domiciled.  That is a matter for the courts (or the opinion of a QC).

 

Domicile is very hard to lose, and it most certainly isn't simply a matter of living outside the UK for 5 years and selling your home.

 

 

Oh dear I am not stupid. I copied that exactly from a legal website and I didn't want to change it in any way before posting here. In my case I have not been in the UK for over 25 years and have been Ordinarily Non Resident and Non Resident for over thirty years. According to Fry Group who are by the way one of the leading legal firms dealing with expats you can send a letter to HMRC declaring your centre of interest is no longer in the UK. You send them proof that your centre of life is now Thailand (Ownership of property membership clubs etc.)  Although they will not openly declare and class you as being Non Dom they will send an acknowledgement of receiving your letter and duly note your situation. It is important that this documentation should form part of your last will and testament when going to probate. Another reason it is a good idea to send a letter if you are thinking Non Dom will be better for you is because aside from the IHT issue there may also be a point in time where they suddenly change the goalposts (there will be no prior warning) and they go more towards the American system of taxable worldwide income for Ordinarily Non and Non residence guys. (sorry for the ling sentence) If that does happen you will be too late because subsequently if you then declare to them that you want to be classed as Non Dom for Tax purposes then they will regard that as an act of tax evasion rather than the legal tax avoidance. Even though your centre of life is indeed Thailand and you have all the proof in hand your request will be rejected on the grounds that you have declared your status only to evade Tax. 

 

I have done my research in this subject with the help of The Fry Group so I know that  I have place myself and my heirs in a good situation regarding Tax issues. As I said before the last thing I would want to do is go to the UK and undo all that I have done merely to avoid a frozen pension.

 

Hope this helps

 

 

Den

 

 

[denby45]

4 hours ago, Orton Rd said:

If you can be uprated in some foreign countries but not if you reside in others, how can it not be extremely unfair?

Sorry Orton,

 

 

was that aimed at me? If so I think you slightly misread what I wrote. I agree entirely it is without doubt extremely unfair. Plus if it was anyone else but the government doing it, it would also be illegal.

 

Den

[evadgib]

Dear evadgib,

 

The Government has responded to the petition you signed – "Give all British citizens living abroad the right to vote and dedicated MPs".

Government responded:

The Government remains committed to introducing 'votes for life' ahead of the next scheduled General Election in 2022 but has no plans to create overseas constituencies.

The Government's principle is clear: participation in our democracy is a fundamental part of being British, no matter how far you have travelled. The Government remains committed to scrapping the 15 year limit on the voting rights of overseas electors ahead of the next scheduled General Election in 2022, subject to securing the necessary Parliamentary approval.

Glyn Davies' Private Member's Bill on Overseas Electors successfully passed its second reading in the House of Commons on 23 February 2018 and will now be moving on to the next stage of legislative passage. The Government spoke in favour of the bill during the debate. If it becomes law, this bill would implement the Government's manifesto commitment to deliver 'votes for life'. We encourage all eligible British citizens to register to vote, wherever they live.

The Government agrees that all British citizens who move to another country should be able to vote for a Member of Parliament to represent their interests. This would be the Member of Parliament representing the area in which an overseas elector previously lived.

The Government does not support the creation of parliamentary constituencies for overseas electors. We believe it is the right principle that overseas electors continue to have some form of connection to the area of the country where they were last resident. This is the approach taken generally in other democracies with overseas voting.

Cabinet Office

Click this link to view the response online:

https://petition.parliament.uk/petitions/200005?reveal_response=yes

The Petitions Committee will take a look at this petition and its response. They can press the government for action and gather evidence. If this petition reaches 100,000 signatures, the Committee will consider it for a debate.

The Committee is made up of 11 MPs, from political parties in government and in opposition. It is entirely independent of the Government. Find out more about the Committee: https://petition.parliament.uk/help#petitions-committee

Thanks,
The Petitions team
UK Government and Parliament

[orientalist]

Oh dear I am not stupid. I copied that exactly from a legal website and I didn't want to change it in any way before posting here. In my case I have not been in the UK for over 25 years and have been Ordinarily Non Resident and Non Resident for over thirty years. According to Fry Group who are by the way one of the leading legal firms dealing with expats you can send a letter to HMRC declaring your centre of interest is no longer in the UK. You send them proof that your centre of life is now Thailand (Ownership of property membership clubs etc.)  Although they will not openly declare and class you as being Non Dom they will send an acknowledgement of receiving your letter and duly note your situation. It is important that this documentation should form part of your last will and testament when going to probate. Another reason it is a good idea to send a letter if you are thinking Non Dom will be better for you is because aside from the IHT issue there may also be a point in time where they suddenly change the goalposts (there will be no prior warning) and they go more towards the American system of taxable worldwide income for Ordinarily Non and Non residence guys. (sorry for the ling sentence) If that does happen you will be too late because subsequently if you then declare to them that you want to be classed as Non Dom for Tax purposes then they will regard that as an act of tax evasion rather than the legal tax avoidance. Even though your centre of life is indeed Thailand and you have all the proof in hand your request will be rejected on the grounds that you have declared your status only to evade Tax. 
 
I have done my research in this subject with the help of The Fry Group so I know that  I have place myself and my heirs in a good situation regarding Tax issues. As I said before the last thing I would want to do is go to the UK and undo all that I have done merely to avoid a frozen pension.
 
Hope this helps
 
 
Den
 
 

Would the documents supporting domicile in another country have to be translated to English at the time of writing to HMRC, or could that be left until whenever HMRC might query domicile status? I. E. Could the non-English documents simply be enclosed and listed?

Sent from my cell phone using Thaivisa mobile app

[Jim P]

Quick question for those knowledgeable on UK pension rights.

 

I intend to retire within the next year. A look at my Govt Gateway statement shows that I will have approx 36 years full contributions at age 56. I have some missing periods from back in the 80s when I was travelling etc and was oblivious to NI contributions, it is too late to buy these back. My current statement shows that I will get 136.99 and the full pension is £159.55 . Would my circumstances allow me to continue contributing for the next 4 years after I retire. 

 

 

[denby45]

2 hours ago, orientalist said:

Would the documents supporting domicile in another country have to be translated to English at the time of writing to HMRC, or could that be left until whenever HMRC might query domicile status? I. E. Could the non-English documents simply be enclosed and listed?

Sent from my cell phone using Thaivisa mobile app
 

I got mine translated so that gave them no reason to reject. I sent a copy of the original chanote and also a letter from Jomtien immigration as proof of current residence. That was already in English because they will do that for you. I also attached a copy of the letter I received years ago from the Tax people in the UK confirming that as I had been non-resident for so long that I no longer had to do a self assessment every year. So they were already aware I had gone awol all those years ago.

 

Den

[denby45]

2 hours ago, Jim P said:

Quick question for those knowledgeable on UK pension rights.

 

I intend to retire within the next year. A look at my Govt Gateway statement shows that I will have approx 36 years full contributions at age 56. I have some missing periods from back in the 80s when I was travelling etc and was oblivious to NI contributions, it is too late to buy these back. My current statement shows that I will get 136.99 and the full pension is £159.55 . Would my circumstances allow me to continue contributing for the next 4 years after I retire. 

 

 

According to the roadmap you will only need 35 years. I suppose you were at some time during those years contracted out so that is why you will not get the full amount. You can of course back pay six years in arrears but it is very probable that would not get you any more money. You cannot continue paying NI contributions after your state pension retirement date.

If I were you I would make absolutely sure and write to the DWP and ask them the question. "If I back pay missing years will I get more money". Others have done the same and the DWP have been honest and confirmed that back paying would provide no benefit to them. Always get it from the horses mouth. 

 

p.s. If for some reason there is some further benefit then the next step would be to go for class 2 contributions for your back payment. Tell them you are and were self employed. There is quite a difference now 2.85 quid versus 14 quid for class 3 voluntary.

 

Hope this helps 

 

Den

Edited March 16, 2018 by denby45

[partington]

2 hours ago, Jim P said:

Quick question for those knowledgeable on UK pension rights.

 

I intend to retire within the next year. A look at my Govt Gateway statement shows that I will have approx 36 years full contributions at age 56. I have some missing periods from back in the 80s when I was travelling etc and was oblivious to NI contributions, it is too late to buy these back. My current statement shows that I will get 136.99 and the full pension is £159.55 . Would my circumstances allow me to continue contributing for the next 4 years after I retire. 

 

 

 What age are you now?  Do you have these 36 years already or will you have them in the future?

Were you contracted out at any time - almost certainly you were if you have currently 36 full years of NI contributions but are not getting the full amount.

 

As advised it is best to speak to the DWP directly and ask them, but in principle if you have a full 30 years NI contributions before April 6th 2016, then paying any gap years before 2016, even if you can, will not increase your pension at all.

 

On the contrary if you are not getting the full pension and you have gap years after Apr 6th 2016 you can pay these gap years, and pay voluntary contributions for each full current year before your official retirement age.

 

Each year you pay like this gives you an extra £4.55 per week(this may be slightly higher now because of inflation I haven't checked)  and you can do this up to the current maximum of £159.55, but no more.

 

This means that if you can pay 5 years after 6th Apr 2016 you will increase your pension to (5 X £4.55) = £22.75

+ £136.99 = £159.74  or the absolute maximum.

 

You should check with the DWP that these actual figures are correct but in principle the idea that you can bump up your pension to the current maximum by paying more than 35 years of NICs is definitely correct:

https://www.moneyadviceservice.org.uk/en/articles/the-state-pension-rules-and-changes-explained

 

"If your starting amount is lower than the full new State Pension

This might be because you were ‘contracted out’ of the Additional State Pension.

You can continue to build up your State Pension to the maximum (currently £159.55 per week) up until you reach State Pension age.

You can find out more about contracting-out here.

You can do this even if you already have 35 years of NI contributions or credits."

[denby45]

46 minutes ago, partington said:

 What age are you now?  Do you have these 36 years already or will you have them in the future?

Were you contracted out at any time - almost certainly you were if you have currently 36 full years of NI contributions but are not getting the full amount.

 

As advised it is best to speak to the DWP directly and ask them, but in principle if you have a full 30 years NI contributions before April 6th 2016, then paying any gap years before 2016, even if you can, will not increase your pension at all.

 

On the contrary if you are not getting the full pension and you have gap years after Apr 6th 2016 you can pay these gap years, and pay voluntary contributions for each full current year before your official retirement age.

 

Each year you pay like this gives you an extra £4.55 per week(this may be slightly higher now because of inflation I haven't checked)  and you can do this up to the current maximum of £159.55, but no more.

 

This means that if you can pay 5 years after 6th Apr 2016 you will increase your pension to (5 X £4.55) = £22.75

+ £136.99 = £159.74  or the absolute maximum.

 

You should check with the DWP that these actual figures are correct but in principle the idea that you can bump up your pension to the current maximum by paying more than 35 years of NICs is definitely correct:

https://www.moneyadviceservice.org.uk/en/articles/the-state-pension-rules-and-changes-explained

 

"If your starting amount is lower than the full new State Pension

This might be because you were ‘contracted out’ of the Additional State Pension.

You can continue to build up your State Pension to the maximum (currently £159.55 per week) up until you reach State Pension age.

You can find out more about contracting-out here.

You can do this even if you already have 35 years of NI contributions or credits."

That is a great answer Partington but I believe he said he was getting to pension age next year. Means he only has one year to try to catch up. However he mentions age 56 which confused me a bit. Ask the DWP is the way to go of course.

Now I do have one question about your calculation which is this. He has 36 years of contributions and 35 are counting for his pension. Obviously every year after 2016 comes under the new flat rate pension system, However because he has the full compliment of years most of those years are under the old system. Paying extra years under the new system would not get him an extra £4.55. He would be effectively be swapping out the old system years which don't pay as much for the new system years which indeed pay the £4.55 (actually it will be a bit more after next month). In that case the increase would be £4.55-XX.XX (Obviously I don't know how much per week under his old system)per week for every year. Or am I missing something?

 

Den   

Edited March 16, 2018 by denby45

[partington]

12 minutes ago, denby45 said:

That is a great answer Partington but I believe he said he was getting to pension age next year. Means he only has one year to try to catch up. Ask the DWP is the way to go of course.

Now I do have one question about your calculation which is this. He has 36 years of contributions and 35 are counting for his pension. Obviously every year after 2016 comes under the new flat rate pension system, However because he has the full compliment of years most of those years are under the old system. Paying extra years under the new system would not get him an extra £4.55. He would be effectively be swapping out the old system years which don't pay as much for the new system years which indeed pay the £4.55 (actually it will be a bit more after next month). In that case the increase would be £4.55-XX.XX (Obviously I don't know how much per week under his old system)per week for every year. Or am I missing something?

 

Den   

 

 

The poster said "I intend to retire" so I assumed he was choosing to, and therefore may not have reached 66 or the official retirement age  (I retired at 56!)...

 

 In principle the starting position for people transitioning from the old to new pension scheme is worked out on 6th April 2016 as the new baseline point. Because under the old system you would have got a maximum of £122.70pw basic State pension on this date if you had 30, 35 or 40 years NICs then your baseline for one of the calculations is £122.70, and excess years above 30 before this "don't count" for this baseline.* Only NIC years after this have the 1/35 of £159.55 or £4.55 value attached to them: the previous old system years have no value that is fixed because any number of them above 30 just got you £122.70pw.

 

 So I don't really understand your point I'm afraid , when you say paying extra years under the new system would not get him an extra £4.55?  Why do you think this? Similarly you are not "swapping years" either,  I don't get where this idea comes from: if any of his 36 years are after April 6th 2016 they all count towards any increase he might get, it does not matter if that takes him above 35 years.

 

It is not just 35 years that are counted for people transitioning from the old to new system, that is the whole point.  This 35 years  for full pension would strictly only apply to people whose NI contribution history was entirely within the new system, ie they started contributing after April 6th 2016 when the system changed.

 

 

* (Admittedly they also do another calculation based on the new system and use whatever is higher as the start point, but this I definitely do not understand since the vast majority of the starting amount calculations seem based on the old system) . 

 

[denby45]

42 minutes ago, partington said:

 

 

The poster said "I intend to retire" so I assumed he was choosing to, and therefore may not have reached 66 or the official retirement age  (I retired at 56!)...

 

 In principle the starting position for people transitioning from the old to new pension scheme is worked out on 6th April 2016 as the new baseline point. Because under the old system you would have got a maximum of £122.70pw basic State pension on this date if you had 30, 35 or 40 years NICs then your baseline for one of the calculations is £122.70, and excess years above 30 before this "don't count" for this baseline.* Only NIC years after this have the 1/35 of £159.55 or £4.55 value attached to them: the previous old system years have no value that is fixed because any number of them above 30 just got you £122.70pw.

 

 So I don't really understand your point I'm afraid , when you say paying extra years under the new system would not get him an extra £4.55?  Why do you think this? Similarly you are not "swapping years" either,  I don't get where this idea comes from: if any of his 36 years are after April 6th 2016 they all count towards any increase he might get, it does not matter if that takes him above 35 years.

 

It is not just 35 years that are counted for people transitioning from the old to new system, that is the whole point.  This 35 years  for full pension would strictly only apply to people whose NI contribution history was entirely within the new system, ie they started contributing after April 6th 2016 when the system changed.

 

 

* (Admittedly they also do another calculation based on the new system and use whatever is higher as the start point, but this I definitely do not understand since the vast majority of the starting amount calculations seem based on the old system) . 

 

Thanks for that information. I was under the assumption that the maximum qualifying years was 35. If it is as you say then I guess the starting point is locked in, in April 2016. However if he has already got 36 years of contributions and he indeed pays the 5 years to build up to the max then he is effectively paying twice for those years. Means his net gain is a lot less. I would have been better if he only had only paid 30 years in 2016 and he paid the following 8 years contributions under the new system to get the max. Then his net gain would indeed have been £4.55 for an outlay of only £14 per week. A good deal.

 

p.s. I checked again and indeed you are correct about adding extra pension even if you have 35 years.

 

Den

Edited March 16, 2018 by denby45

[partington]

28 minutes ago, denby45 said:

Thanks for that information. I was under the assumption that the maximum qualifying years was 35. If it is as you say then I guess the starting point is locked in, in April 2016. However if he has already got 36 years of contributions and he indeed pays the 5 years to build up to the max then he is effectively paying twice for those years. Means his net gain is a lot less. I would have been better if he only had only paid 30 years in 2016 and he paid the following 8 years contributions under the new system to get the max. Then his net gain would indeed have been £4.55 for an outlay of only £14 per week. A good deal.

 

p.s. I checked again and indeed you are correct about adding extra pension even if you have 35 years.

 

Den

In principle this is true, and it is "better" to only have paid 30 years by April 6th 2016.

 

But everyone who has a job in the UK has to pay NIC for every year they are working, and always did so, so they don't have a choice - you only have a choice to pay the voluntary contributions, and this choice may not have been open to the poster.

 

And people who retired in 2016 only got 122.70 pw basic whether they retired with 50 40 or 30 full years of contributions which is far worse!

 

No system can be truly fair and at points where the system is radically changed there are always winners and losers.

 

 

 

 

 

 

 

[Jim P]

Sorry for the confusion guys, I am currently 55 and intend to retire later this year, by this time I will be 56. Yes I was contracted out. My forecast shows I can get a state pension of £159.55 in 2029 with full contributions.

 

Based on my current record of 36 years contributions it shows I have 136.99 but it states that if I contribute another 4 years before 2029 I will receive 159.55, Im assuming that forecast is made if I keep working, which isnt my intention. I do not qualify to buy any of the missing years as they expire after 6 years and they were back in the 80s. I was wondering if I can just keep paying contributions for the next 4 years after my retirement to accrue the full amount and would it actually be worth it if I can?

Edited March 16, 2018 by Jim P

[Jim P]

Edited March 16, 2018 by Jim P

[Jim P]

Of course I will be accruing another year at the end of this tax year which isnt yet included hence the 4 years missing I am quoting, not 5 as shown.

Edited March 16, 2018 by Jim P

[Rajab Al Zarahni]

2 minutes ago, Jim P said:

Of course I will be accruing another year at the end of this tax year which isnt yet included hence the 4 years missing I am quoting, not 5 as shown.

Why not simply become self employed for four years as for example, a cabinet maker, window cleaner or book binder then make sure you charge so much that you get no work. In the period of your "self employment" pay Class 2 self employed NI contributions.

[partington]

7 hours ago, Jim P said:

Sorry for the confusion guys, I am currently 55 and intend to retire later this year, by this time I will be 56. Yes I was contracted out. My forecast shows I can get a state pension of £159.55 in 2029 with full contributions.

 

Based on my current record of 36 years contributions it shows I have 136.99 but it states that if I contribute another 4 years before 2029 I will receive 159.55, Im assuming that forecast is made if I keep working, which isnt my intention. I do not qualify to buy any of the missing years as they expire after 6 years and they were back in the 80s. I was wondering if I can just keep paying contributions for the next 4 years after my retirement to accrue the full amount and would it actually be worth it if I can?

In short yes you can. You just need to either contact HMRC National Insurance Contributions and Employers Office after you retire and ask to pay Voluntary Class 3 contributions , for example by direct debit, and continue for four years, or, even more simply just wait until the four years are up and then send them a cheque stating your NI number, name and address, and contact details and what years you are paying for.

 

They will then just add this to your contributions and it should be reflected in your pension forecast almost immediately.   You have 10 years to do this in so there's no hurry. Currently you can pay for  any year up to six years after that year.

 

You can't just pretend to be self-employed  to pay a lower rate, as they will require some evidence.

 

Whether it's worth it or not depends on your circumstances and health. If you live four years after 66 you have made the money back, and each year you live after that you receive guaranteed index-linked income  above what you paid in for as long as you live. 

 

Four years more  NI contributions gets you £9,464 plus inflation more than you paid in if you live to 80. Very few investments will do that, guaranteed.

Edited March 17, 2018 by partington
bad maths!

[steve187]

7 hours ago, Rajab Al Zarahni said:

Why not simply become self employed for four years as for example, a cabinet maker, window cleaner or book binder then make sure you charge so much that you get no work. In the period of your "self employment" pay Class 2 self employed NI contributions.

the only down side to this is that they will stop class 2 contributions next April 2019, but that end date does keep changing, as they are insure what to do with a group of people that will have to pay an increase of the class 2 of £2.80 per week to voluntary class 3 of  £15.00 per week

[denby45]

2 hours ago, steve187 said:

the only down side to this is that they will stop class 2 contributions next April 2019, but that end date does keep changing, as they are insure what to do with a group of people that will have to pay an increase of the class 2 of £2.80 per week to voluntary class 3 of  £15.00 per week

Yes you are correct about the abolishing class 2 but they have been dragging their feet for a long time now, since it was supposed to be introduced by April 2017 and I believe (hope) it may not happen soon. The replies to the consultation paper left so many unanswered question that they had to postpone. It would be prudent to go for class 2 just in case.

 

Following is a quote from the relevant section of the consultation paper for info on the new proposal:

 

"Class 2 voluntarily

They are:

• self-employed working abroad

• individuals employed abroad

• mariners on foreign vessels

Class 4 liability follows income tax liability – when a self-employed person is working abroad there is no tax liability and therefore no Class 4 liability.

This means these individuals could not accrue qualifying years for benefit entitlement via a profits test in Class 4. Therefore this group would need to pay Class 3 voluntary NICs instead to protect their State Pension record following the abolition of Class 2 NICs. This would align the voluntary NICs position of NICs payers overseas with those in the UK."

 

Confirms the switch from class 2 to class 3 for us lot rather than those working self employed in the UK who will switch from the combined class2/4 to paying under class 4 only.

Not good news for those currently paying class 2. However I have done the maths (I am English so that's not a spelling mistake) and it is still worth my while to continue to pay my contributions. Just means I will have to make an extra special effort to live a bit longer, if even just to get my money back.

 

Den

Edited March 17, 2018 by denby45

[denby45]

9 hours ago, Rajab Al Zarahni said:

Why not simply become self employed for four years as for example, a cabinet maker, window cleaner or book binder then make sure you charge so much that you get no work. In the period of your "self employment" pay Class 2 self employed NI contributions.

They are not interested in how much you earn. Class 2 is a flat rate and overseas workers (Ordinarily non resident or non resident) cannot pay class 4.

 

Den 

[evadgib]

13 hours ago, Rajab Al Zarahni said:

Why not simply become self employed for four years as for example, a cabinet maker, window cleaner or book binder then make sure you charge so much that you get no work. In the period of your "self employment" pay Class 2 self employed NI contributions.

I had an obscure zero hrs contract that I tried to use to my advantage when I last spoke to them but it was for a startup based in UK which might have opened a can of worms therefore I thought twice.