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Buying qualifying years for UK state pension


Quillan

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If like me you do not have the full number of qualifying years to get a full state pension you now have until 2019 (originally it finished in 2016) to buy your extra years.

 

If like me you started work in France within the same 'tax year' that you left the UK you can buy these years as a Class 2 stamp which is currently £2.65 a week from 2006 to 2011 and goes up in increments each year to £2.85. I need 7 years from 2002 so it's going to cost me around £965. This will entitle me to a full state pension under the new scheme in a few years time. Of course this does not take into account any HMG budget changes.

 

If you haven't worked in France since you left the UK then you can buy a class 3 stamp but it is a lot more expensive, £13.25 a week from 2006 to 2011 rising like the class 2 thereafter to £14.10 per week which would have cost me £4,823, a big difference.

 

To be able to buy Class 2 stamps you are going to have to prove you are, and have, worked in France which I suspect involves them checking with the French tax authorities.

 

So for those in the same boat as me and seeing as the penalties (of not getting the full UK state pension) are quite high i.e. the reduction for each qualifying year missed, it may pay you to consider buying some class 2 stamps and for some even class 3 stamps.

 

To find out more you can phone HMRC on 0044 3000 555724 and have a chat. I found the lady very helpful. Don't forget to have your NI number to hand before you call. There is a form you can fill in on the HMRC website but DON'T, call them first because if you meet certain criteria (which they won't tell you what they are) it works out cheaper than filling in the form. They will send you a letter telling you what you need to pay and how to pay it which I believe you can do online.

 

Another thing I just remembered. When I got a pension forecast back in 2001 they told me I had 28 years but I also got three years free which took me over the 30 years which was the then requirement for a full state pension. Although I had the required number through this scheme I was told not to bother buying extra years because the difference it would make to the weekly amount would just be a couple of pence, well under the new scheme it's a reduction of £4.43 for each year you missed which in my case would reduce it from £151.25 to £120.24 a reduction of some £31. Apparently over the years this three free years was done away with even for those that thought they had already been given it. It does show up on your pension statement but as unqualified.

 

Hope this helps anyone who is thinking about their UK state pension entitlement and are living in France.

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What do you have to do to "prove" that you started work in the tax year you left the UK?

 

The waters are rather muddied in my case from when I went travelling first but I was also in reciept of incapacity benefit for a short time while recovering from malaria before coming to France.

 

I was off the radar really for a decade. I (think that I) have 26 years of contributions, I have always said that you never know I might even add a few more in the UK before retirement age but this current trip has persuaded me that will never happen.

 

When I looked before the class 3 contributions were loads more.

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I don't know yet how you prove when you started work, I guess that will come as part of the information they are sending me. If it does I will add it to the thread. I have a suspicion that it might be your French tax bill but I don't really know yet. Fortunatly not a problem for us because we went and "signed up" for tax withing a month or two of being here. If it is the tax system then you actually get a bit extra time wise because of the different way the UK and the French start their tax year and whilst it says you paid tax it does not say which day you arrived just sometime inside that tax year.

 

You really need to get an up to date assesment of qualifying years. Unfortunatly you can't do it online because you are not in the UK so you need to apply for it but you can at least do that over the phone if you call 0044 191 218 3600.

 

https://www.gov.uk/voluntary-national-insurance-contributions/who-can-pay-voluntary-contributions (Sets some of the criteria for making voluntary payments from abroad)

 

https://www.gov.uk/voluntary-national-insurance-contributions/rates (Give you the current rates for 2015/16 and previous years rates via a pdf file lower down the page)

 

The website is as clear as mud really. If you read the 'headline' on the page for example they say everyone will get the £151 per week then as you read further down in the smaller print it says to find out exactly what your going to get do this or do that. Then on another page it says the minimum you will get is £115 per week but then further down that page it says something like depending on your qualifying years you may get less, again not in the first bit you read but after you have scrolled down the page and in smaller print. Even then you won't find the way to pay the extra years unless you specifically search and after that only at the very bottom of that page does it tell you how to do it from abroad and of course once you have drawn your very first pension payment you can't then top it up which they only tell you in some hard to find pdf file. Basically they are IMO making it difficult to find out because they don't ant people to know they can enhance their pensions by paying a relatively small amount of money. Like I said in my first post you really need to give them a call on the number in that post (it's a different number and department to the one above for just getting a forecast). It's worth a punt because you never know and from reading the newspapers people in the UK are discovering that they are getting nowhere near the £151.

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By coincidence there was a discussion of this issue on BBC Radio 4 yesterday. The advice given was to ask for your pension statement to see what the DHSS considered your position to be  and to take advice from an expert once you had all the relevant data.

It did emerge that there are two components to your UK state pension One related to the number of contribution years and the other part based on your level of earnings. Hopefully the pension statement will clarify what your current position is and whether it is worth paying the top up.

If you have been working in France and paying social charges surely you will be entitled to some sort of French pension as well.

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As Rabbie says ask, It's extremely foolish of anybody not to ask for a pension forecast within about five years of retiring. Especially if your working life has been complicated by either work gaps or working for many different companies. I found  out very early fortunately for me, that some companies I worked for on short time contracts didn't pay their share of my Social security contributions indeed they pocketed the payments that they stopped me. So every year along with the DHSS I did a  review of what I had paid and what they the DHSS had received, it was an eye opener, in fact it was so bad in my industry that the DHSS investigated and several well known companies had to pay huge fines. I'm so glad I checked up as I now get every penny I'm entitled to and quite rightly so.

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[quote user="idun"]I am a victim of misinformation from the DHSS and believe me I asked them for information over many years and it turns out that it was all WRONG, and anyway it is now the DWP.

[/quote] 

I got all the information I needed, from people who were as helpful as you could wish. Maybe it depends on how or who you ask? As to what it's called now I couldn't give a flying fig. as all I know is the maximum amount of money that I'm entitled to goes into my bank account every week.  [:D]

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It is pretty straightforward to apply to pay voluntary contributions from abroad. Just complete the form with your work or self-employment record and you will be sent a summary of the options for making-up your years. I have been in France since 2006 and have worked part time, on and off during several of those years. Once you have completed the form, the options for payment and the costs are sent to you. I had the option of paying the lower contributions for the weeks I worked and the higher rate for the other weeks. You have to pay for complete tax years, but it is possible to choose which years to pay for to make up the missing years.
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[quote user="idun"]Well bully for you NickP, all I was told over many years, even the beginning of last year when it was then the DWP and not the DHSS, was all tommy rot.............. I asked all the right questions as I am NOT stupid!

[/quote]

Nobody said you are, but you say you got a very different return from them than I did. So there has to be a reason. As I said I'm more than happy with the help I got and it paid off. So as you say bully for me.

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