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Old 04.03.2017, 13:40
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UK pension contributions for expats and how to check your own history online...

Update 09.03.2017

Guys, thank you for the very useful feedback in this thread, it was much appreciated.

Based on your feedback, I just called the relevant HRMC and International caseworker department and got the facts.

Basically I made an unintentional error when I filled in the original form, based on my own confusion and ignorance. Without realizing, I ticked the "Pay class 3 voluntary contributions" box, so that is what they quoted me for, However, confusingly, they attached a form for me to pay Class 2 contributions, though this was not clear in the letter they sent me. I askled at the logic of this and they said that they only provide quotes based on what I have requested, even if they know I should be paying only Class 2 contributions. Unfortunately, they don't provide any further guidance, and it is up to us to read all the material and work it out. Lessons learnt.

So now, I will send the class 2 contributions forms and then this will be all I have to pay. I have not yet paid any contributions, so I have lost nothing and gained some useful knowledge that may help someone else from making the same mistakes.

I will update the thread when I get back more info and a revised statement.

-----------------------------------------

Original post 04.03.2017:

Just in case anyone is interested, I wrote to HRMC and asked about voluntary UK pension contributions. After a few weeks, they sent me back a letter telling me all of the contributions I have missed and how much I need to pay to top them up back to full again, which I can do until April 2019 without incurring any additional charges.

For the last 8 years of missed contributions it was just under 5000 in total, and the latest few years of contributions amounted to an average of 700 per year for full contributions. The UK state pension is currently circa 8200 per year, and my retirement age is calculated at 67. Just as a quick and dirty calculation, lets say that optimistically I live until 85, paying 700 per year until retirement age, for an approximate outlay of 21'700 that will give a return of 147'000, not taking inflation etc etc into account.

That does not seem like a bad return on investment, and I will contact them to get payment details and then set up monthly payments to pay it back before April 2019.

Additionally, I have now seen that there is what looks to be a relatively new UK government portal website called the "Government Gateway" that allows you to register using your National Insurance and Passport numbers and see at a glance ALL of your historical contribution data, as well as any gaps that are able to be paid (or not as the case may be if it was too long ago) in one easy place.

Government Gateway https://www.tax.service.gov.uk/gg/si...origin=unknown

Pretty useful site I think.

Last edited by Chuff; 09.03.2017 at 12:28.
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Old 04.03.2017, 15:00
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Re: UK pension contributions for expats and how to check your own history online...

I wouldn't be surprised if there are huge reforms in pensions in the next 30 years. In particular an increase in eligibility age and means testing.

The 700 a year 'investment' could yield nothing especially on expats with meaty Swiss pensions who've been earning 6 figures for most of their lives
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Old 04.03.2017, 15:29
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Re: UK pension contributions for expats and how to check your own history online...

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Just in case anyone is interested, I wrote to HRMC and asked about voluntary UK pension contributions. After a few weeks, they sent me back a letter telling me all of the contributions I have missed and how much I need to pay to top them up back to full again, which I can do until April 2019 without incurring any additional charges.

For the last 8 years of missed contributions it was just under 5000 in total, and the latest few years of contributions amounted to an average of 700 per year for full contributions. The UK state pension is currently circa 8200 per year, and my retirement age is calculated at 67. Just as a quick and dirty calculation, lets say that optimistically I live until 85, paying 700 per year until retirement age, for an approximate outlay of 21'700 that will give a return of 147'000, not taking inflation etc etc into account.

That does not seem like a bad return on investment, and I will contact them to get payment details and then set up monthly payments to pay it back before April 2019.

Additionally, I have now seen that there is what looks to be a relatively new UK government portal website called the "Government Gateway" that allows you to register using your National Insurance and Passport numbers and see at a glance ALL of your historical contribution data, as well as any gaps that are able to be paid (or not as the case may be if it was too long ago) in one easy place.

Government Gateway https://www.tax.service.gov.uk/gg/si...origin=unknown

Pretty useful site I think.
I think you are paying the wrong contributions RD. If you are employed out here then you only need to pay class 2 for a full state pension which is just 2.50 a week. It's incredible value. I bought back 5 years like you for 600 quid!
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Old 04.03.2017, 15:44
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Re: UK pension contributions for expats and how to check your own history online...

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I think you are paying the wrong contributions RD. If you are employed out here then you only need to pay class 2 for a full state pension which is just 2.50 a week. It's incredible value. I bought back 5 years like you for 600 quid!
Yes, hubby paid about 100 a year, he left the UK when he was 50.
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Old 04.03.2017, 16:08
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Re: UK pension contributions for expats and how to check your own history online...

Very useful site, as it reveals they have errors in their records. For some years this site shows no contribution, even though i paid class 2 and have a letter confirming 52 contributions in those years....
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Old 04.03.2017, 17:06
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Re: UK pension contributions for expats and how to check your own history online...

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I think you are paying the wrong contributions RD. If you are employed out here then you only need to pay class 2 for a full state pension which is just 2.50 a week. It's incredible value. I bought back 5 years like you for 600 quid!
Whaaaattt, a full 5 years of pension for 2.50 a week? Are you sure about that? A 600 payout gives 5 years full pension?
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Old 04.03.2017, 17:30
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Re: UK pension contributions for expats and how to check your own history online...

Backdated class 2 contributions for 2013-14 (the last year I paid for) were 140.40 for 52 weeks. That buys me 1/35th of a full basic state pension, assuming the rules don't change in the next 20 years or so...
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Old 04.03.2017, 17:34
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Re: UK pension contributions for expats and how to check your own history online...

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Backdated class 2 contributions for 2013-14 (the last year I paid for) were 140.40 for 52 weeks. That buys me 1/35th of a full basic state pension, assuming the rules don't change in the next 20 years or so...
Can someone then point me to documentation that says that expats only pay class 2 to get a full pension? Why then did they quote me $700 per year? They know I am an expat living abroad...
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Old 04.03.2017, 18:42
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Re: UK pension contributions for expats and how to check your own history online...

https://www.gov.uk/voluntary-nationa...-contributions
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Old 04.03.2017, 19:15
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Can someone then point me to documentation that says that expats only pay class 2 to get a full pension? Why then did they quote me $700 per year? They know I am an expat living abroad...
The links been supplied I see but honestly RD I am pretty certain about this. If your unemployed and out of the U.K. It's class 3, for employed its class 2, 2.50 a week. I remember talking to them and saying 'this is absurdly cheap and they agreed.' I bought back the full 5 years and pay a tenner a month in direct debit now. I am pretty much 100% they have made a mistake (probably innocently) in advising you to pay class 3.

Edit here is the actual line saying class 2 if you are employed expat https://www.gov.uk/pay-class-2-national-insurance
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Old 04.03.2017, 19:53
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Re: UK pension contributions for expats and how to check your own history online...

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Whaaaattt, a full 5 years of pension for 2.50 a week? Are you sure about that? A 600 payout gives 5 years full pension?
I can confirm that I pay class 2 contributions at the moment.
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Old 04.03.2017, 20:02
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Re: UK pension contributions for expats and how to check your own history online...

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I can confirm that I pay class 2 contributions at the moment.
And this will give you a full pension? I just checked my letter and they said they have accepted my application for paying class 3 contributions.

I need to call them up on Monday!
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Old 04.03.2017, 20:21
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Re: UK pension contributions for expats and how to check your own history online...

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And this will give you a full pension? I just checked my letter and they said they have accepted my application for paying class 3 contributions.

I need to call them up on Monday!
Yes full pension. Talk to them next week I am sure they will refund you and allow you to move to class 2.
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Old 04.03.2017, 20:44
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Re: UK pension contributions for expats and how to check your own history online...

We already have a thread about this...

UK voluntary National Insurance contributions and state pension

Mods, please merge...
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Old 09.03.2017, 08:38
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Re: UK pension contributions for expats and how to check your own history online...

For anyone interested in this, you need to decide the merits for your personal situation, but don't leave any decision too long. The class 2 contributions are planned to be abolished as discussed in this detailed examination of the class 2 and class 4 contributions for self employed.

The paper states that "no timetable has been set for the abolition of Class 2 and the reform of Class 4", however the budget yesterday included a rise in the cost of Class 4 contributions which has been somewhat controversial as it appears to go against a pre-election pledge from Cameron... who ? Maybe it's a sign that this chancellor is keen to reform in this area.
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Old 09.03.2017, 10:54
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Re: UK pension contributions for expats and how to check your own history online...

If you apply you can pay class 2, (as it stands currently). It works out about 140 quid a year. (you are only paying pension, not unemployment, maternity blah blah blah) Of course with the weak pound and such a low figure it makes sense to pay back the missing years.

And while it is true that a lot can change in the next 30 or so years. Ie the state will only pay out a pension when savings drop below a threshold, or you only get it from the age of 72 etc etc. We are talking about the cost of a lotto ticket.

It has to be worth the gamble, 140 quid a year for a return of 155 quid a week at retirement. And for those who have been here a while and remember the pound being 2.5/2.6 to the franc...140 quid a year is something like 180 Francs cheaper than 10 years a go

For info, as it is today, as long as you have 11 years or more contribution you will get something. So even if you decide not to pay, it is still worth while reaching the 11 years, so the previous payments from time working in the UK aren't completely wasted
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Old 09.03.2017, 11:30
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Re: UK pension contributions for expats and how to check your own history online...

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It has to be worth the gamble, 140 quid a year for a return of 155 quid a week at retirement. And for those who have been here a while and remember the pound being 2.5/2.6 to the franc...140 quid a year is something like 180 Francs cheaper than 10 years a go
I'm not a big believer in the long term viability of the pension system, but even I thought that the odds were good on this one. I sent my form in to backpay in January and this thread reminded me to check. It seems they only received it in Feb and I will only get a response at the end of March.

Quite a nice form tracker. I'm impressed with the usefulness of the website.
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Old 09.03.2017, 11:44
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Re: UK pension contributions for expats and how to check your own history online...

I registered for that online portal ages ago and it always quotes class 3 rates for missing years, however like others here I went through the documentation and it does seem that people living and working here only need to pay class 2 to catch up.

As I seem to have somehow paid NI even when a student, I'm "only" missing 10 years contributions and, as I'm more than 10 years away from 65 and was planning to return to the UK I hadn't gotten around to paying the gaps. However, as there's a chance class.2 will be abolished, plus who know whether I will go back to the UK to work for 10 years, this thread is a good prompt for me to complete the form and request (and pay) some missing years. The maximum one can back-pay is 6 years.

The form is here:
https://www.gov.uk/government/upload.../NI38_CF83.pdf
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Old 09.03.2017, 12:22
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Re: UK pension contributions for expats and how to check your own history online...

agree with all the above. i pay class 2 which is 2.50 a week. class 3 is for expats who are not working.
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Old 09.03.2017, 12:26
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Re: UK pension contributions for expats and how to check your own history online...

Guys, thank you for the very useful feedback in this thread, it was much appreciated.

Based on your feedback, I just called the relevant HRMC and International caseworker department and got the facts.

Basically I made an unintentional error when I filled in the original form, based on my own confusion and ignorance. Without realizing, I ticked the "Pay class 3 voluntary contributions" box, so that is what they quoted me for, However, confusingly, they attached a form for me to pay Class 2 contributions, though this was not clear in the letter they sent me. I asked at the logic of this and they said that they only provide quotes based on what I have requested (in this case Class 3), even if they know I 'should' be paying only Class 2 contributions. Unfortunately, they don't provide any further guidance, and it is up to us to read all the material and work it out. Lessons learnt.

So now, I will send the class 2 contributions forms and then this will be all I have to pay. I have not yet paid any contributions, so I have lost nothing and gained some useful knowledge that may help someone else from making the same mistakes.

I will update the thread when I get back more info and a revised statement.

Last edited by Chuff; 09.03.2017 at 13:27. Reason: Clarity
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