Contributions to UK State Pension from the Isle of Man

nigelbb

AnnieB2018 said:

Just out of curiosity - so for the 6 years after moving to IOM you can buy NI credits in the UK while also paying tax on IOM and accruing 6 years of NI credit there too? I get that you are paying twice but this double dipping sounds a bit of an oversight from the HMRC 🙈!

You can buy NI credits for as long as you like when abroad. You aren't restricted to just six years. The simplest plan is just to set up a direct debit before you emigrate. Currently you could work for three years in the UK then pay Class 2 contributions for the next 32 years while abroad at a total cost of just over £5,000 in today's money then retire with an index linked pension of over £9,600 for the rest of your life worth getting on for £100,000.

bostonerimus

AnnieB2018 said:

Just out of curiosity - so for the 6 years after moving to IOM you can buy NI credits in the UK while also paying tax on IOM and accruing 6 years of NI credit there too? I get that you are paying twice but this double dipping sounds a bit of an oversight from the HMRC 🙈!

UK expats can generally voluntarily keep paying UK NI while they are working overseas. This is to keep up their NI record of contributions for some assumed return to the UK. The expat will often also have to pay into the local social security scheme which means that they can build up credits in two systems. For a long time the expat paid Class 3 voluntary NI, but in the early 1990s (for some reason) the Government made it possible to pay the far less expensive Class 2 NI which is pretty ridiculous. I've been paying voluntary NI since the late 1980s and I estimate I've paid a total of just over £5k over 35 years and I will get full UK state pension, currently almost £10k per year. Every expat who can should take advantage of this benefit. I wrote to HMRC in the 1990s to comment on how unbalanced it seemed. In fact Class 2 NI (currently ~£150 per year) should be abolished or made far more expensive, even if it is supposed to be a benefit for the self-employed...it seems a bit too generous.

nigelbb

bostonerimus said:

AnnieB2018 said:

Just out of curiosity - so for the 6 years after moving to IOM you can buy NI credits in the UK while also paying tax on IOM and accruing 6 years of NI credit there too? I get that you are paying twice but this double dipping sounds a bit of an oversight from the HMRC 🙈!

UK expats can generally voluntarily keep paying UK NI while they are working overseas. This is to keep up their NI record of contributions for some assumed return to the UK. The expat will often also have to pay into the local social security scheme which means that they can build up credits in two systems. For a long time the expat paid Class 3 voluntary NI, but in the early 1990s (for some reason) the Government made it possible to pay the far less expensive Class 2 NI which is pretty ridiculous. I've been paying voluntary NI since the late 1980s and I estimate I've paid a total of just over £5k over 35 years and I will get full UK state pension, currently almost £10k per year. Every expat who can should take advantage of this benefit. I wrote to HMRC in the 1990s to comment on how unbalanced it seemed. In fact Class 2 NI (currently ~£150 per year) should be abolished or made far more expensive, even if it is supposed to be a benefit for the self-employed...it seems a bit too generous.

You don't need to be a UK expat to earn UK state pension by paying voluntary contributions. Your nationality is irrelevant. You just need to have lived in the UK & paid NI contributions for three years prior to leaving the UK.

Brie

nigelbb said:

You can buy NI credits for as long as you like when abroad. You aren't restricted to just six years. The simplest plan is just to set up a direct debit before you emigrate.

The difficulty of this is it assumes your UK bank account will continue to be allowed if your address is not in the UK.

Lots of people who have moved to Spain etc have had their accounts closed due to not being a resident.  Obviously IoM is a different situation.

bostonerimus

nigelbb said:

bostonerimus said:

AnnieB2018 said:

Just out of curiosity - so for the 6 years after moving to IOM you can buy NI credits in the UK while also paying tax on IOM and accruing 6 years of NI credit there too? I get that you are paying twice but this double dipping sounds a bit of an oversight from the HMRC 🙈!

UK expats can generally voluntarily keep paying UK NI while they are working overseas. This is to keep up their NI record of contributions for some assumed return to the UK. The expat will often also have to pay into the local social security scheme which means that they can build up credits in two systems. For a long time the expat paid Class 3 voluntary NI, but in the early 1990s (for some reason) the Government made it possible to pay the far less expensive Class 2 NI which is pretty ridiculous. I've been paying voluntary NI since the late 1980s and I estimate I've paid a total of just over £5k over 35 years and I will get full UK state pension, currently almost £10k per year. Every expat who can should take advantage of this benefit. I wrote to HMRC in the 1990s to comment on how unbalanced it seemed. In fact Class 2 NI (currently ~£150 per year) should be abolished or made far more expensive, even if it is supposed to be a benefit for the self-employed...it seems a bit too generous.

You don't need to be a UK expat to earn UK state pension by paying voluntary contributions. Your nationality is irrelevant. You just need to have lived in the UK & paid NI contributions for three years prior to leaving the UK.

True, the criteria are explained in NI38.

bostonerimus

I haven’t had a UK bank account since the late 1980s and so I would just send HMRC a sterling bank draft once a year and now just do a wire transfer from my US bank. It’s very easy

sherringham2001

Thanks for ths discussion, its interesting. It'ss great I can contribute to my UK state Pension from the Isle of Man. Does anyone know if I moved away from the Isle of Man to the UK, or anywhere else in the world, would I be able to contribute to their state pension scheme too? If so, what is the minimum amount of time you have to pay into the Isle of Man state pension for, so this can happen?