Voluntary National Insurance Contributions

[Alan-LaCala]

There was a discussion about this some time ago, particularly the proposal to reduce the qualifying years to 30.

As I had not seen an update here (did I miss it?) I have checked the DWP site and found that the Pensions Act 2007 received Royal Assent on 26 July.

So anyone with over 30 years contributions and still paying can now stop.

Alan

[El Cid]

Not necessarily.

The new rules come into force on April 6th 2010. If you retire before that date you will have to have the full 44 years contribution record to get a full pension.

Also the 5 years free contributions which are credited to your account (for a man) between age 60 and 65 are not allowed if you are not a UK resident.

Believe me, this is the case. I reach 65 next year and will have to find 7 years contributions (about £2500) to get a full pension. If I was 3 years younger I would get it for free!

At least I can feel happy taking my winter fuel allownance (my wife is a pensioner) - that helps to pay for this outrageous inequality for non residents.

Sid

[gus]

Sid,

Glad you pointed that point out - I don't hit 60 till 2011 so I am sorted

I'm ever so glad I didn't elect to pay voluntary contributions when I gave up work 7 years ago - I'd hate to think I had wasted money!!

Gus

[MrsP]

My husband has just sent off for a forecast, will let you know what comes back

[pilgrim]

My husband had an unsolicited letter from them just before Christmas saying he only needed to pay another 203 pounds contributions in order to qualify for his pension and that he had six years to pay this, he has just turned 45 and still works in the UK and is paying Tax and NI?? I will have to find the letter, maybe it was not meant for him?

[Alan-LaCala]

Sid

Of course you are correct and I should have pointed that out.

Maybe I got too carried away with the fact that it helps me, if not everyone.

Alan

[safeashouses]

My husband had an unsolicited letter from them just before Christmas saying he only needed to pay another 203 pounds contributions in order to qualify for his pension and that he had six years to pay this, he has just turned 45 and still works in the UK and is paying Tax and NI?? I will have to find the letter, maybe it was not meant for him?

I think you will find that he was short by £203 in that one particular contribution year in order to make it a "qualifying year" for pension purposes. They do give you 6 years in which to pay it. Perhaps he was unemployed, or sick and not claiming benefit or a company he worked for hasn't for some reason submitted a NI return for him. It happened to me when a company I worked for went bankrupt.

[pilgrim]

Thankyou for that Safeashouses. that sounds right as he usually has about 3months off, if not more each year.

[Beachcomber]

By the time most of us reach pensionable age there will be no such thing as a state pension because they will have given all the money away to the.... well, to other people.

When I moved to Spain I was advised by DHSS, or whatever they call it now, to carry on paying voluntary contributions despite that fact that I worked and contributed here for the first twelve years or so. I disregarded this advice and paid the money, instead, into a private pension fund that I already had running and which is now providing me with a modest but acceptable monthly income which is far in excess of what I may, or may not get, when I reach 65.

[El Cid]

Paying voluntary contributions is one of the best investments you can possibly make.

A single years contribution is about £350. This entitles you to an additional 2.5% on the state pension. The state pension for a couple is currently £7280pa. 2.5% of that is £182.

That means that you get your money back in less than 2 years.

Anyone know of a better investment?

Sid

[Alan-LaCala]

And it's index linked and payable for as long as you live.

Alan

[Cassandra]

Does any of it get passed to a spouse. It would be just my luck to pay it all up then get knocked down by a bus or something

[El Cid]

Yes, a surviving spouse would be entitled to the normal single pension.

Sid

[El Cid]

And it's index linked and payable for as long as you live.

If you look at current annuity rates for joint lives, male 65, index linked, to get a return of £182 would require an investment of over £3600 compared to the DSS wanting a mere £350.

I think our American friends would call that a "no-brainer"!

David

[teralin]

I have heard that the automatic pension credits for men and women between the ages of 60 and 65 are to be phased out over a period of time. Has anyone read anything about this?

[Deborah]

Still on the topic of pensions. If I am going to be entitled to a Spanish pension when I retire will I still be entitled to claim my English pension.

Basically - I worked for 8 years in the UK and moved here when I was 25. Since then (now 42) I have been paying into the Spanish system.

Can anyone shed any light.

Much appreciated.

[Alan-LaCala]

I have heard that the automatic pension credits for men and women between the ages of 60 and 65 are to be phased out over a period of time. Has anyone read anything about this?

The DWP site says:
"From 2010 the age from which you can get Pension Credit will gradually increase. This will be in line with the State Pension age becoming 65 for women as well as men by 2020."

My understanding (though I do not claim to be an expert) is that pension credit is only available if you live in the UK.

Alan

[Bongtrees]

Action by campaign groups has led to payouts for expats misinformed of their National Insurance status, writes Ava Hubble

Thousands of Britons have been wrongly refused a pension after being told they had not contributed to the National Insurance Fund for the minimum qualifying period.

The minimum qualifying period for National Insurance Contributions (Nics) is 11 years for men and 10 years for women. But those who had paid Nics for at least three years should have been told they could top up their contributions to bring them in line with this minimum.


The full article can be found on todays Telegraph online
www.telegraph.co.uk

[El Cid]

Action by campaign groups has led to payouts for expats misinformed of their National Insurance status, writes Ava Hubble

That is seriously old news.

This happened a few years ago and as a result it is possible to pay some contributions up to 9 years late - I was advised of this situation a few years ago by the DSS.

Another example of lousy journalism.

Sid

[rymanskid]

Ok daft question maybe ,,but what is the position if one re marries and you both have the full contributions, do you get as a married couple or treated as 2 single people