Have you topped up a UK pension to cover gaps?

[FlyingFiona]

Anyone here worked in the UK for 3-10 years and have topped up a UK pension to the minimum 10 years of contributions mark so as to claim the pension?

I have some questions about process, am interested in hearing lessons learned, and I am looking for recommendations of financial advisers (who deal with this type of thing in Australia).

 

[andye]

I've been sorting this out recently (buying extra years rather than topping up to minimum). I am not a financial advisor so take advice as enthusiastic amateur

There are two types of National Insurance Contribution (NICs): Class 2 & Class 3
Class 3 may make financial sense but Class 2 are a no-brainer if you can get them. Class 2 gives the equivalent of more than the one-off cost every year from age 67 for the rest of your life. Unfortunately, not indexed-linked in Australia .

It seems (and I have been offered on that basis) Class 2 requires you to have worked in UK then abroad including Australia.

You can find out more info on the gov.uk website

Voluntary National Insurance

National Insurance contributions you can choose to pay when you have a gap in your National Insurance record.

www.gov.uk

Pay voluntary Class 2 National Insurance contributions if you do not pay through Self Assessment

How to pay Class 2 self-employed National Insurance contributions - online, bank transfer, cheque, payslips.

www.gov.uk

You might need to dig out old NI number and you will need to get a UK Government Gateway login

I would move quickly as the ability to buy more than 5 years at a time ends in April 2025 and the process takes a couple of months at least

 

[andye]

For some hard numbers I have been offered the option to buy 14 additional years at GBP 163.80 to GBP 179.40 each.

The potential return on investment is so good that if it wasn't Government backed you would think it was a scam

The pension would almost certainly be classed as income in Australia so you would need to work out how it would affect your Aus pension (and associated benefits) eligibility

 

[FlyingFiona]

Thanks, @andye. I believe I am entitled to top up under the Class 2 but for this I'll need help (i.e. an Australian based financial adviser experienced in this area) in order to get it approved by April. I only need to top up 1 year to reach the minimum. If I qualify for the Class 2 in their eyes then I'll prob top up to the max possible. If only Class 3 then I will have to have a think about it (I mean, I might well have left this world before I even get to start drawing the pension let alone waiting for that investment to pay off!).

I have my NI and I've looked up my record on the UK Gov Gateway (which oddly says I've contributed more years than I was even in the UK as a working adult - but I'm not going to argue with that!).

Your additional years look pretty reasonably priced. Nice one. Did you just apply and were granted?

 

[andye]

Thanks, @andye. I believe I am entitled to top up under the Class 2 but for this I'll need help (i.e. an Australian based financial adviser experienced in this area) in order to get it approved by April. I only need to top up 1 year to reach the minimum. If I qualify for the Class 2 in their eyes then I'll prob top up to the max possible. If only Class 3 then I will have to have a think about it (I mean, I might well have left this world before I even get to start drawing the pension let alone waiting for that investment to pay off!).

I have my NI and I've looked up my record on the UK Gov Gateway (which oddly says I've contributed more years than I was even in the UK as a working adult - but I'm not going to argue with that!).

Your additional years look pretty reasonably priced. Nice one. Did you just apply and were granted?

Yes just applied online
I was alerted to it by the people dealing with my UK ex-NHS pension* but did all the online paperwork myself
I'd suggest having a go yourself and engaging paid help if you are having trouble. You have a bit of time up your sleeve

*its not possible to transfer NHS to Aus any more

 

[andye]

As an additional point, although Australia is one of the countries that doesn't index-link after you start taking the pension, you still get the (generous "triple-lock") benefit of the value increasing until you take it.

I think of it as an ultra-cheap annuity. There is no benefit from it once you die

 

[VPS]

I worked in the UK for a few months in the 80s - I'm not sure that my employer actually paid anything for me but does anyone know how I can find out please

 

[FlyingFiona]

Yes just applied online
I was alerted to it by the people dealing with my UK ex-NHS pension* but did all the online paperwork myself
I'd suggest having a go yourself and engaging paid help if you are having trouble. You have a bit of time up your sleeve

*its not possible to transfer NHS to Aus any more

Thanks. I've done some digging around and don't think my case is as straight forward as yours, mores the pity. I'll keep digging and contact one of the financial advisers in Australia that I come across.

I worked in the UK for a few months in the 80s - I'm not sure that my employer actually paid anything for me but does anyone know how I can find out please

With your National Insurance number, I'd imagine, otherwise from the employer itself if still existing. Your employer may have paid into the State Pension or into their own.

But I'm not sure what the benefit of finding out would be? (If you are thinking pension wise, you must have worked at least 3 continuous years in the UK to be able to have any kind of benefit. You would have worked under the old pension scheme times and I'm not familiar with their details.)

 

[kelvedon]

Agree with andye. ( and this is from my experience as I’m not a financial advisor) If you can get class 2 contributions it’s a no brainer. For the full pension you have to contribute for 35 years, but even pro rata the £170 p.a. NI contribution equates to over £300 extra per year…for the rest of your life.
Importantly it is not means tested. It will be treated as income here so it probably will affect any Australian pension eligibility.
As mentioned open a UK Government Gateway account which will show you your existing contributions and how many years of catch up you can do as well as your future pension estimate. Unfortunately the age pension recipients residing in Australia don’t benefit for indexation and is frozen to the amount paid when you turn 67.
National Insurance Contributions phone number
+44 191 203 7010

 

[kelvedon]

I worked in the UK for a few months in the 80s - I'm not sure that my employer actually paid anything for me but does anyone know how I can find out please

Yes, open a UK Government Gateway account. You may need your National insurance number. I think there has to be a few years of previous contributions to qualify for age pension

 

[VPS]

Thanks. I've done some digging around and don't think my case is as straight forward as yours, mores the pity. I'll keep digging and contact one of the financial advisers in Australia that I come across.


With your National Insurance number, I'd imagine, otherwise from the employer itself if still existing. Your employer may have paid into the State Pension or into their own.

But I'm not sure what the benefit of finding out would be? (If you are thinking pension wise, you must have worked at least 3 continuous years in the UK to be able to have any kind of benefit. You would have worked under the old pension scheme times and I'm not familiar with their details.)

OK not long enough. I was working for a family and paid cash so he probably didn't bother to do it through the books

 

[VPS]

Yes, open a UK Government Gateway account. You may need your National insurance number. I think there has to be a few years of previous contributions to qualify for age pension

I never got a payslip so therefore don't have NI number - I don't think I'll bother. I did see a doctor a couple of times and when I had to see a doctor when I was in the UK recently I didn't have an NHS number - they think I was probably just given a temporary one like I was last year. My employer paid any medical bills I incurred anyway

 

[FlyingFiona]

Agree with andye. ( and this is from my experience as I’m not a financial advisor) If you can get class 2 contributions it’s a no brainer. For the full pension you have to contribute for 35 years, but even pro rata the £170 p.a. NI contribution equates to over £300 extra per year…for the rest of your life.
Importantly it is not means tested. It will be treated as income here so it probably will affect any Australian pension eligibility.
As mentioned open a UK Government Gateway account which will show you your existing contributions and how many years of catch up you can do as well as your future pension estimate. Unfortunately the age pension recipients residing in Australia don’t benefit for indexation and is frozen to the amount paid when you turn 67.
National Insurance Contributions phone number
+44 191 203 7010

Cheers. It's how to actually apply for the Class 2 bit that I'm a bit stuck on and think I need some expert help on - the rest I've done.

 

[andye]

I'm pretty sure this is the page to apply

Apply to pay voluntary National Insurance contributions when abroad (CF83)

Use our online service to apply to pay voluntary National Insurance contributions for periods abroad.

www.gov.uk

Mine all worked online. (I saw a (otherwise very good IMO) YouTube video that said you could only do by post). I'll try to find it

Here it is

 

[kelvedon]

Cheers. It's how to actually apply for the Class 2 bit that I'm a bit stuck on and think I need some expert help on - the rest I've done.

I phoned the Pensions department in the UK who ( i seem to remember ) put me through to the foreign pensions section and the man sorted it all out for me on the phone in about 5 minutes.

 

[FlyingFiona]

I'm pretty sure this is the page to apply

Apply to pay voluntary National Insurance contributions when abroad (CF83)

Use our online service to apply to pay voluntary National Insurance contributions for periods abroad.

www.gov.uk

Mine all worked online. (I saw a (otherwise very good IMO) YouTube video that said you could only do by post). I'll try to find it

Here it is

Thanks! Yes I've read through that. My issue is that currently my contributions are listed as being £825/year which isn't the Class 2 amount so I need to work out how to change that but there doesn't seem to be any information on just how to do that - it all talks about if you are self-employed, which I'm not. Thanks so much for the video link - I'll watch that for sure. Appreciate it.

I phoned the Pensions department in the UK who ( i seem to remember ) put me through to the foreign pensions section and the man sorted it all out for me on the phone in about 5 minutes.

Great news! I had read elsewhere that ringing them was akin to ringing Centrelink - hours on hold only to be cut off. I'll give it a go!

 

[andye]

Thanks! Yes I've read through that. My issue is that currently my contributions are listed as being £825/year which isn't the Class 2 amount so I need to work out how to change that but there doesn't seem to be any information on just how to do that - it all talks about if you are self-employed, which I'm not...

I am definitely straying outside my air of confidence but if I understand you correctly the GBP825 was what you paid previously when you were in UK. The eligibility for class 2 for additional years shouldn't be affected by the class of NIC you've already paid

 

[kelvedon]

If you live or work abroad (or have previously)​

To pay Class 2 or Class 3 voluntary contributions you must have either:

• previously lived in the UK for 3 years in a row
• paid contributions or had Class 2 contributions treated as having been paid for at least 3 years

To pay Class 2 voluntary contributions both of the following must also apply:

• you worked in the UK immediately before leaving
• you’re currently working abroad (or you worked while you were abroad)

Voluntary National Insurance

National Insurance contributions you can choose to pay when you have a gap in your National Insurance record.

www.gov.uk

 

[clifford]

I assume that this conversation relates to non-UK citizens.

My wife and I, who lived in the UK until 1974 and are UK citizens (we're also Aussie citizens), didn't have any problems in claiming the UK pension (for an employment period of less than 10 years)

 

[FlyingFiona]

I assume that this conversation relates to non-UK citizens.

My wife and I, who lived in the UK until 1974 and are UK citizens (we're also Aussie citizens), didn't have any problems in claiming the UK pension (for an employment period of less than 10 years)

Citizenship doesn't come into it actually (although I too am a UK citizen). The UK State Pension is for any worker, not just those who are also citizens.