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Voluntary NI payments to get a UK pension - short time window to act


Pickles
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I don't know whether this has been discussed before: I have had a look but didn't find any reference to it.

As you may be aware, the UK govt has provided an extended window for those with missing or incomplete years of NI contributions to make voluntary Ni payments to fill in years going back to 2006.

What had passed me by (because I am not affected by this) is that it seems to be possible to draw separate pensions from eg the UK and France. I learned recently from an Irish friend who has worked in the UK and Ireland that if you have ever worked in the UK and therefore have an NI record, you can make use of the current scheme to buy up to 17 years of UK pension entitlement. 

The return is pretty spectacular: from what I calculated, 17 years of voluntary NI will cost you around £14K and will yield around £5K per annum (at current pension payment rates). This would be added to whatever UK state pension entitlement you already have, subject of course to the maximum of 35 years of NI contributions. If you don't have £14K immediately available, then you could purchase the 11 years from 2006 now, and buy the rest under the normal "6 years" rule later.

The best guide to what you need to do is on Martin Lewis's Moneysavingexpert website. It is well worth working your way through his guide.

The deadline for the years 2006-20016 is 31st July this year: after that you can only go back 6 years. Part of the process involves calling either the Future Pension Centre or the Pension Service (depending on your situation) and the phone lines are apparently VERY busy, so if you want to do this, don't leave it until the last minute. It probably concerns those who are between 45 and 70 years old.

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For those who have hardly worked in the UK, it's also worth paying just enough to get the minimal pension if you moved to France pre-brexit. If you're covered by the withdrawal agreement you'll receive an S1 regardless of when you retire.

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13 minutes ago, DraytonBoy said:

If you've been living and working here you can pay additional Class 2 NI contributions @£3.15 per week to top-up your UK state pension.

Thanks for pointing this out. I must admit that my calculations assumed Class 3 NI voluntary contributions: if you qualify for Class 2, that would be an absolute no-brainer. Assuming that the same 17-year opportunity applies (I don't see any reason why not) then for around £2800, you would get around £5K per annum!!!!

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3 minutes ago, Pickles said:

Thanks for pointing this out. I must admit that my calculations assumed Class 3 NI voluntary contributions: if you qualify for Class 2, that would be an absolute no-brainer. Assuming that the same 17-year opportunity applies (I don't see any reason why not) then for around £2800, you would get around £5K per annum!!!!

Exactly what my OH has done, she only worked for 5 years in the UK but with credits for bringing up children and paying 17 years of Class 2 contributions she now has close to a full state pension.

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We started on this road many years ago and both got topped up to full basic rate pension.  My wife is currently waiting for a decision paying class 2 contributions for her time working in France to bring her basic rate pension up to the full new state pension by paying another few years contributions. The person she spoke to in DWP suggested this route which we had never thought of.

I have just paid £824 to HMRC to get a lift o £5.24 a week for my pension as I found I could pay one more year - better than any interest rate!  This was sorted out on the phone,  email and online payment in April 2023.  The new full rate pension in not available to me as my military service pension was opted out.

The people are very helpful provided you can get through to them on the phone, you survive the "not this department"  "I will pass you on" phone calls.  My wife's dossier was raised in March this year and we are still waiting an answer.  At least she has a dossier number from before the new July cut off date.

The one pitfall to be aware of with payment is this. DWP pay the pensions and HMRC collect the contributions.  HMRC will quite happily continue to collect your contributions even AFTER you have made the required amount.  You can pay 40 years contributions but you will only get 36 years worth of pension!  If you find you have paid too much, you will only get a refund for partial year payments, not full years you have already paid.  Make sure you get the proper picture from DWP.

I got caught out on this, so I know.

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Don't hold your breath.  My wife checked up on the government gateway for her claim made in March.  Expect a reply in October is the current estimate.

It also takes 8 weeks from receiving your extra contributions to HMRC acting on them.  This is according to a conversation I had with them this week.  They also, annoyingly, don't acknowledge receipt of electronic payments.

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  • 2 weeks later...

Out of interest, how many calls did you have to make to the future pensions centre before speaking to an actual human? I keep getting either the "your call cannot be connected" message or get through to the recorded pensions blurb, before being cut off. Feeling a bit grrrrrr!

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20 hours ago, betise said:

Out of interest, how many calls did you have to make to the future pensions centre before speaking to an actual human?

In my case I rang the International Pension Centre 00 44 191 218 7777 on 17 March.  After a relatively short wait and pressing buttons I got through OK.  Even when I rang other numbers, they put me through to the relevant section.

I did have the same problems you site, but on another number (which I don't have a record of)

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From memory, NI number DOB, address, post code here and my last post code (both in France).  Don't know if it makes any difference, but we both are registered on the UK Government gateway site.  It is a bit involved, you have to download software onto your phone which allows you to scan the NFC chip on the front of your passport to do a comparison of the info there (a very clear photo) and an uploaded photo from your phone using the approved government software.

Once you are registered there, it allows you to track any forms you have sent in too.

We have rung so many numbers recently trying to sort out both mine and my wife's pension (public and private). One chap actually asked me the date of my marriage.  We were having a bit of banter and I asked him if was joking (I cannot remember the date for the life of me).  He assured me he was not, so I was in the embarrassing position of having to ask my wife, sitting next to me, what it was.

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On 31/05/2023 at 09:14, Lehaut said:

In my case I rang the International Pension Centre 00 44 191 218 7777 on 17 March.  After a relatively short wait and pressing buttons I got through OK.  Even when I rang other numbers, they put me through to the relevant section.

I did have the same problems you site, but on another number (which I don't have a record of)

Bl**dy hell man, have a biscuit! After trying 35 times the day before yesterday on the Future Pension Centre international number, I tried the one you kindly gave, and spoke to somebody first try. To say I was amazed is a massive understatement (I think the person I spoke to could tell)!

Thank you so much, you hero 😀

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  • 2 weeks later...
  • 2 weeks later...

Just an update to my case of paying voluntary contributions.  HMRC sent me a letter acknowledging my contributions paid on 17 April (electronically).  Their letter dated 16 May arrived with me on 7 June - one month in transit, a month after I made to transfer.  They also wanted to know if I had actually sent any money, and if so for what!

Still no pension increase, will be interesting to see, when it does arrive, if it is backdate to when I paid the contributions.

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  • 4 weeks later...

My partner had 9 years NI record - would get 0 pension at UK retirement age. For £824 we bought one more year which at current rates would pay her 2500 pa at retirement. We have not bothered with any more years as the uplift is small, but the 10 year threshold is a no-brainer.

We had to write to them, wait ages, reply confirming that we wanted to proceed, but I still had to call to check what to do next - not very clear.

Once you’ve established the correct class of NIC you need to pay, you then make an electronic payment with an extremely SPECIFIC reference involving correct spacing etc. The guy on the phone detailed its to me and i was amazed how un user friendly it was. I found a document - attached- which confirmed what he said.

After Eight weeks or so, the extra year was credited to her account and that’s a very good investment.

 

Edited by isitlunchtime
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