Voluntary NI contributions for former student and UK-EU situation

8bits
8bits Posts: 47
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edited 20 November 2023 at 11:26AM in Topping up your state pension
Hi there,
I came to UK in 2010 to start a PhD until it finished in early in 2015 and then I have worked in UK since.
My National Insurance record says rightfully that my years are not full for those years (I was on a UK/EU stipend) and suggest I could buy them each for about £800

- 2022 to 2023 - Full year
(...)
- 2015 to 2016 - Full year
- 2014 to 2015 - Year is not full
- 2013 to 2014 - Year is not full
- 2012 to 2013 - Year is not full
- 2011 to 2012 - Year is not full
- 2010 to 2011 - Year is not full

I am at this point where I have 8 years of full contribution but might leave to work in a EU country next year, potentially not returning to the UK. Would it make sense to buy 2 or more years of my PhD years so I reach this 10 years level to receive a potential pension later in my life, or it doesn't make any difference as long as the UK has an agreement with the EU country I'll work for?

(Note: I also have British citizenship now, if that matters.)

Comments

  • af1963
    af1963 Posts: 190
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    Are you working and contributing this year ? If so 2023-24 may count already, or by the end of the tax year.  And if you leave part way through 2024-5, you'll have another partial ( or potentially even a full ) year which may be cheaper to buy.
  • pinnks
    pinnks Posts: 1,242
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    Also, once you leave you can continue to pay UK NI, probably under class 2 at about £180 per year, and continue so doing until you reach the UK max or pension age.  You would then have a significant UK pension plus a pension, or pensions, from other EU countries in which you work.
  • Bostonerimus1
    Bostonerimus1 Posts: 474
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    edited 19 November 2023 at 1:02PM
    pinnks said:
    Also, once you leave you can continue to pay UK NI, probably under class 2 at about £180 per year, and continue so doing until you reach the UK max or pension age.  You would then have a significant UK pension plus a pension, or pensions, from other EU countries in which you work.
    Read HMRC's leaflet NI38 which is all about making NI contributions from overseas. You will have to think about what you might be doing in the future and how long you will be able to make NI contributions to decide whether it's worth you making some catch up NI contributions, but if you go to work overseas N making Class 2 voluntary NIC's is a no-brainer.
  • 8bits
    8bits Posts: 47
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    edited 19 November 2023 at 8:08PM
    af1963 said:
    Are you working and contributing this year ? If so 2023-24 may count already, or by the end of the tax year.  And if you leave part way through 2024-5, you'll have another partial ( or potentially even a full ) year which may be cheaper to buy.
    Yes I am, so you're right I could get almost 9 years probably, but if I leave it's likely before April 2024.
    pinnks said:
    Also, once you leave you can continue to pay UK NI, probably under class 2 at about £180 per year, and continue so doing until you reach the UK max or pension age.  You would then have a significant UK pension plus a pension, or pensions, from other EU countries in which you work.

    Ok, good to know.
    pinnks said:
    Also, once you leave you can continue to pay UK NI, probably under class 2 at about £180 per year, and continue so doing until you reach the UK max or pension age.  You would then have a significant UK pension plus a pension, or pensions, from other EU countries in which you work.
    Read HMRC's leaflet NI38 which is all about making NI contributions from overseas. You will have to think about what you might be doing in the future and how long you will be able to make NI contributions to decide whether it's worth you making some catch up NI contributions, but if you go to work overseas N making Class 2 voluntary NIC's is a no-brainer.
    Thanks for the ref. It's hard to tell what I'll do in the future to be honest.

    Overvall it seems you all recommend completing those 10 years of contributions either by buying some years or by contributing from overseas. I still don't fully understand how it works with another country, I am assuming if they have an agreement those years will be incorporated in the pension received in this country (assuming I stay there) and I won't be able to get the UK pension.


  • pinnks
    pinnks Posts: 1,242
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    From the UK perspective once you have either 10 UK years or 10 years of UK and EU combined then the EU rules on the coordination of social security mean that the aggregated years from both countries get you past the required 10 years, e.g. 8 years in the UK and 30 years in an EU country would give you and aggregated 38 years.  Your UK pension would then be 8 years' worth, even though you have fewer than 10 UK years.  If you have more than 10 UK years then the RU rules have no impact on the UK because of how our rules work.

    The same principle would be applied by the EU country in which you live, so if you were in Germany and needed 35 years to claim your pension at 63, you would have 30 German years and 8 UK years that, together, get you past 35.  You then get 30 years worth of German pension as well as your UK pension.

    But, if you were to pay voluntary UK years you could increase your UK pension to something approaching the maximum and also still get the same 30 years pension (using the above example) from the EU country. 

    Any UK years that overlap with your EU years because of paying voluntary UK NI will not get double-counted (the EU years will be used and the overlapping UK ones ignored) but if you had any gaps in the EU country then those voluntary UK years would come back into play - in simple terms you end up with a contiguous record from age 16 to pension age that is fed into the systems of both countries and get a pension from each countries based on your actual contributions in that country.  In theory you could get a max state pension from both countries - it is just that in many countries voluntary contributions take 15 to 20 years to achieve payback whereas the UK ones take 7 months for class 2 and 3 years for class 3, so are incredibly "cheap" in that regard.
  • Thanks for the ref. It's hard to tell what I'll do in the future to be honest.

    Overvall it seems you all recommend completing those 10 years of contributions either by buying some years or by contributing from overseas. I still don't fully understand how it works with another country, I am assuming if they have an agreement those years will be incorporated in the pension received in this country (assuming I stay there) and I won't be able to get the UK pension.


    If you qualify to pay Class 2 voluntary NICs do it!!!! They are ridiculously inexpensive. I just paid about £160 for the last year. I've been doing it for about 30 years and now qualify for full state pension and it's cost me around £6k in total lifetime contributions.
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