What does purchasing full contribution years do to a full international pension?.

4countryworker

I´m just trying to understand ;- normally, having worked in 4 different countries (UK, Finland, France and Spain) giving me a total of 42 full contribution years across the four, I should qualify for a full pension in each country pro.rated by the number of years I worked in each.

This is my understanding so far - please, let me know, if anyone thinks I have misunderstood something here, 

Now I see the possibility to purchase missing years in the UK pension scheme between 2006 and 2016 by April 2025 and I am wondering what the impact is?

I was working in France and Spain during this period (2006-2016) so all these years are ´missing. in my UK NI Record. 

So is it futile to purchase these full contribution years - because I dont actually need them for eligibility reasons, (having worked the equivalent of those years in other countries with whom the UK has bilateral agreements to recognise them as valid for earning eligibility for a full New State Pension in the UK) - or is it actually worth purchasing them because it is a bonus opportunity of doubling my UK pension whilst still maintaining what I should receive from the other state pension schemes in Finland France and Spain?

Can someone advise me? Thanks a lot!

xylophone

https://www.norden.org/en/info-norden/finnish-pension-system

https://www.expatica.com/fr/finance/retirement/french-pension-830117/

https://www.expatica.com/es/finance/retirement/spain-pension-846584/





Have you contacted the International Pensions Centre concerning your UK pension?

https://www.gov.uk/new-state-pension/living-and-working-overseas

squirrelpie

My reading of the gov.uk doc is that you can make voluntary payments here that will improve your UK pension. Check your online forecast to see what it says.

Also, you should claim a pension from whichever was the last place you worked of France, Spain & Finland.

4countryworker

Thanks to Xylophone for each of those links - I´ll take a look to see if they help in any way.

4countryworker

Thanks to Squirrelpie for your comment. Yes I was aware for the submission of my pension claim and have just submitted it from Spain where I am currently resident - however, I indicated on the Pension Claim form to postpone the claim to the UK - firstly because in any case I need to be 66 years old to make a UK pension claim, I believe, and that wont be until June 2025.

Secondly, because I am having some doubts about whether or not I should take advantage of the current opportunity to purchase ´missing years´ (between 2006 and 2016) to boost my UK pension - and those doubts are the reason I opened this thread and exposed my uncertainty.

Somehow, in the context of the fact that across the 4 countries I have NO missing years (if all the data is aggregated) I am wondering if it is somehow cheating to double my pension in the UK - in other words to be getting an aggregate full pension on the basis of 52 full contribution years instead of the 42 which I actually have. What I mean is, isnt the opportunity to purchase missing years in the UK only devised for those citizens who for whatever reason dont have 35 full years as a total across any number of countries - whereas I DO have those years already without purchasing any more?

I dont know if I am clear with my doubt. I dont want to spend a few thousand pounds for nothing if at the end of the process, each country pension scheme will NOT consider any years worked over and above their own maximum requirement - in this case I would be wasting my money (around 15K GBP) for nothing!

 

4countryworker

I thought I would ask this question again as I have no replies - but re-formulated in case it was unclear first time.

Will purchasing "missing years" identified in my UK NI record, from the period 2006-2016 before April 2025 actually increase my UK pension, or is it a waste of money because I dont actually have any "missing years" when my contributions to the Finnish, French and Spanish social security systems (during the time I worked in all these countries) are taken into account - by the UK pension service when considering my eligibility for a full new state pension.

Does anybody know, or could anyone point me in a good direction? Thanks!

JoeCrystal

The International Pensions Centre, highlighted by the xylophone, may be worth asking about. I doubt many would know the correct answer since your questions are so niche.

kb928300

The EU social security agreements state this as how state pension are calculated where there are contributions across multiple countries:

How your pension is calculated

Pension authorities in each EU country you've worked in will look at the contributions you've paid into their system, how much you've paid in other countries, and for how long you've worked in different countries.

The EU-equivalent rate

Each pension authority will calculate the part of the pension it should pay taking into account periods completed in all EU countries.

To do so, it will add together the periods you completed in all EU countries and work out how much pension you would get had you contributed into its own scheme over the entire time (called the theoretical amount).

This amount will then be adjusted to reflect the actual time you were covered in that country (called the pro-rata benefit).

The national rate

If you meet the conditions for entitlement to a national pension irrespective of any periods completed in other countries, the pension authority will also calculate the national pension (known as an independent benefit).

Result

The national authority will then compare the pro-rata benefit and the independent benefit; you will receive whichever is higher from that EU country.

Each country's decision on your claim will be explained in a special note, the P1 form, you will receive.

It would not be futile to add the additional voluntary NI contributions in the UK as this would increase your national rate, if the national rate for the UK is higher than the EU equivalent rate then that is what the UK would pay.  If working in the EU and paying contributions to the social security funds for those countries in your missing UK years, you should be able to pay NI class 2 for the missing UK years, which significantly reduces the amount to pay to increase the UK pension entitlement.

It is always worth speaking to the HRMC before purchasing the missing years, but this is the advice I have been given by them.  

This is the link to the information on how pensions are calculated:

europa.eu/youreurope/citizens/work/retire-abroad/state-pensions-abroad/index_en.htm