Foreign & UK pension advice

SomeMadeUpName

@Mordko, unbelievable really isn't it, I'll be pushing it to all my contacts who qualify as an unmissable deal.
But how do we as a country afford it?
A native Swede could (have, pre Brexit) come to UK after uni to work in bars in London for 3 or 4 years, then go home to take up their 'real' life.  They then qualify to pay the next 32 years of class2 voluntary NI at £158 a year (about the price of a round of drinks in Stockholm).  Then at 67yrs old we (the UK state) will pay them £9k+ pa for the rest of their lives.
Not being jingoistic (and for reference I was & am fiercely anti Brexit) but this would be a non-native person who just 'visited' the UK for a few years in their youth.  I spent a good while in the US and Australia in my early 20's, bet I get zero rights like that there!
Hey ho.

SomeMadeUpName

Actually, I've still got my Aussie tax file number (I was there when they were first setting up the system) maybe I should check out what they might allow me 

bostonerimus

SomeMadeUpName said:

@Mordko, unbelievable really isn't it, I'll be pushing it to all my contacts who qualify as an unmissable deal.
But how do we as a country afford it?
A native Swede could (have, pre Brexit) come to UK after uni to work in bars in London for 3 or 4 years, then go home to take up their 'real' life.  They then qualify to pay the next 32 years of class2 voluntary NI at £158 a year (about the price of a round of drinks in Stockholm).  Then at 67yrs old we (the UK state) will pay them £9k+ pa for the rest of their lives.
Not being jingoistic (and for reference I was & am fiercely anti Brexit) but this would be a non-native person who just 'visited' the UK for a few years in their youth.  I spent a good while in the US and Australia in my early 20's, bet I get zero rights like that there!
Hey ho.

The rules were initially set up for UK expats so they could stay in the system while working overseas, but they had to pay Class 3 which is more expensive than Class 2. In the early 1990s the rules changed and allowed people working overseas for a foreign employer to pay Class 2. I think that was either some special interest lobbying or a big "faux pas" by someone. But the number of people overseas paying Class 2 will be dwarfed by the self employed in the UK who pay Class 2 so maybe that's the real issue. 
The new UK state pension is a pretty meager benefit for most people when you look at the amount they pay in NI. In most other countries the state pension is far better value for money for the pensioner. But if you can pay Class 2 NI the UK state pension is a great deal. I calculate that over the 32 years I've been paying voluntary NIs I've made total contributions of about £5k, (I got 3 free years in college) and for that I'll get £9k/year index linked state pension from age 67. 

SomeMadeUpName

I think if they made the min qualifying period for paying in pre moving 10 years (to align with the min number of years to get a New SP) then whilst it would still be a great deal then it would be fair enough. 3 years in the UK system just seems too much like a 'visit'.

bostonerimus

SomeMadeUpName said:

I think if they made the min qualifying period for paying in pre moving 10 years (to align with the min number of years to get a New SP) then whilst it would still be a great deal then it would be fair enough. 3 years in the UK system just seems too much like a 'visit'.

I'd make it 10 years paying NICs or being a British citizen so that young people who work overseas have the option to pay NICs while they are abroad. But I would make the Class 2 contribution far higher than £3.05/week because that's ridiculously low. I know that it's good to encourage self employment, but the Class 2 rate is just silly. It's so low that even though I have 37 years of NICs I keep paying it just in case they move the goal posts for state pension...I mean £150 a year is nothing.

[Deleted User]

SomeMadeUpName said:

@Mordko, unbelievable really isn't it, I'll be pushing it to all my contacts who qualify as an unmissable deal.
But how do we as a country afford it?
A native Swede could (have, pre Brexit) come to UK after uni to work in bars in London for 3 or 4 years, then go home to take up their 'real' life.  They then qualify to pay the next 32 years of class2 voluntary NI at £158 a year (about the price of a round of drinks in Stockholm).  Then at 67yrs old we (the UK state) will pay them £9k+ pa for the rest of their lives.
Not being jingoistic (and for reference I was & am fiercely anti Brexit) but this would be a non-native person who just 'visited' the UK for a few years in their youth.  I spent a good while in the US and Australia in my early 20's, bet I get zero rights like that there!
Hey ho.

Well, I am almost that Swede. I spent 10 years in the UK, naturalized and emigrated. Having worked as an engineer, I paid quite a bit more tax than a waiter. 

The system is crazy in more than one way.  I will be getting full British pension which is nuts but I’ll take it.  Its a bit less unfair than in the case of a guy who left Britain after graduation and never worked at all. 

On the other hand, my British pension won’t have inflation protection as long as I stay in Canada, unless I move to Boston. If I were to retire in the UK, I would also get triple lock (or whatever its called), which is a crazy incentive for people to spend lives and pay taxes abroad and then return just in time to burden NHS. 

Canadian system makes sense.  Operates almost like a DB pension.  Years you pay count, and to get a full year credit you need to have earnings of over $60K (you pay in a proportion of your salary up to 60k).  If you leave the country, even for a year, you don’t get any credit. Its like you changed companies. But you’ll get the same pension for the same years of pensionable service, regardless of where you are. You earned it.  And your contributions have been invested by an independent agency; Your Canadian State Pension isn’t paid out of future generations taxes. 

bostonerimus

Deleted_User said:

Well, I am almost that Swede. I spent 10 years in the UK, naturalized and emigrated. Having worked as an engineer, I paid quite a bit more tax than a waiter. 

The system is crazy in more than one way.  I will be getting full British pension which is nuts but I’ll take it.  Its a bit less unfair than in the case of a guy who left Britain after graduation and never worked at all. 

On the other hand, my British pension won’t have inflation protection as long as I stay in Canada, unless I move to Boston. If I were to retire in the UK, I would also get triple lock (or whatever its called), which is a crazy incentive for people to spend lives and pay taxes abroad and then return just in time to burden NHS. 

I started paying Class 2 when I took a 3 year academic appointment in the US because I was advised to keep my NICs going as I planned to return to the UK. Well that 3 year appointment turned into an over 30 year life in the US and I never stopped paying the voluntary NICs. I'm retired now and if I didn't have access to state retiree medical insurance I would probably be back in the UK now. I think there's still a good chance that I'll move back to the UK, probably Scotland, and "burden the NHS", but then the UK would get a chance to tax my estate.

nigelbb

SomeMadeUpName said:

nigelbb said:

Your wife should maximise her UK state pension by making voluntary National Insurance contributions. As she has been working in Germany she will be entitled to pay Class 2 contributions that cost about £150 for each added year. 

@nigelbb, I know she would be entitled to do this as a UK citizen (living and working overseas), but would she be entitled to do this as a German citizen (living and working in Germany or other outside UK)??
Ie, has she gained this right by spending some time working in the UK, or by marrying a UK citizen (if @Deanbark is indeed a UK citizen)?

She gained the right to pay voluntary National Insurance contributions to maximise her pension because she has worked in the UK. Nationality has nothing to do with it.

SomeMadeUpName

nigelbb said:

SomeMadeUpName said:

nigelbb said:

Your wife should maximise her UK state pension by making voluntary National Insurance contributions. As she has been working in Germany she will be entitled to pay Class 2 contributions that cost about £150 for each added year. 

@nigelbb, I know she would be entitled to do this as a UK citizen (living and working overseas), but would she be entitled to do this as a German citizen (living and working in Germany or other outside UK)??
Ie, has she gained this right by spending some time working in the UK, or by marrying a UK citizen (if @Deanbark is indeed a UK citizen)?

She gained the right to pay voluntary National Insurance contributions to maximise her pension because she has worked in the UK. Nationality has nothing to do with it.

@nigelbb, Thx, yep, we've pretty much nailed that. Specifically it appears:
Lived in the UK for 3 years or more to get ability to pay voluntary contribs.
Lived in the UK for 3 years or more, paid 3 years NI & was working immediately before leaving and is now working whilst overseas to get the ability to pay cheaper voluntary class2.

SomeMadeUpName

Deleted_User said:

SomeMadeUpName said:

@Mordko, unbelievable really isn't it, I'll be pushing it to all my contacts who qualify as an unmissable deal.
But how do we as a country afford it?
A native Swede could (have, pre Brexit) come to UK after uni to work in bars in London for 3 or 4 years, then go home to take up their 'real' life.  They then qualify to pay the next 32 years of class2 voluntary NI at £158 a year (about the price of a round of drinks in Stockholm).  Then at 67yrs old we (the UK state) will pay them £9k+ pa for the rest of their lives.
Not being jingoistic (and for reference I was & am fiercely anti Brexit) but this would be a non-native person who just 'visited' the UK for a few years in their youth.  I spent a good while in the US and Australia in my early 20's, bet I get zero rights like that there!
Hey ho.

Well, I am almost that Swede. I spent 10 years in the UK, naturalized and emigrated. Having worked as an engineer, I paid quite a bit more tax than a waiter. 

The system is crazy in more than one way.  I will be getting full British pension which is nuts but I’ll take it.  Its a bit less unfair than in the case of a guy who left Britain after graduation and never worked at all. 

On the other hand, my British pension won’t have inflation protection as long as I stay in Canada, unless I move to Boston. If I were to retire in the UK, I would also get triple lock (or whatever its called), which is a crazy incentive for people to spend lives and pay taxes abroad and then return just in time to burden NHS. 

Canadian system makes sense.  Operates almost like a DB pension.  Years you pay count, and to get a full year credit you need to have earnings of over $60K (you pay in a proportion of your salary up to 60k).  If you leave the country, even for a year, you don’t get any credit. Its like you changed companies. But you’ll get the same pension for the same years of pensionable service, regardless of where you are. You earned it.  And your contributions have been invested by an independent agency; Your Canadian State Pension isn’t paid out of future generations taxes. 

Sounds much better.
I do sometimes wonder what would have happened had I accepted the scholarship to a Canadian uni I was offered, might still be there now. Instead I went to a US uni, and decided that country was definitely not for me.
I'm surprised Canada isn't on the list of countries where your pension is indexed, it being commonwealth.