UK National Insurance Contributions (Top up) missing years - Living abroad

Jusdiz

Hello 

I live abroad for the last 18 years with no desire to return and been investigating weather i should paid NI contributions. I have my forecast and also the amount that i need to pay before April 5th 2025, to bring me up to date with my missing years. However my questions is ? If i have the maximum amount of years in both countries, when i retire, am I entitled to 2 separate state pensions ? Or just 1 ? 

pinnks

You say you know how many years you need to pay and how much that will cost.  Have you been through the CF83 procedure with HMRC/DWP?  Do you know whether you qualify to pay Class 2 NIC at about £165 per year, or whether you will need to pay Class 3 at £825 per year?

Leaving that to one side you will generally get 2 pensions, starting at the pension age in each country but whether 1 will impact the other depends on where you are living.  Also, your country of residence will determine whether or not your UK pension increases each year with inflation, or whether it is frozen at its starting amount until and unless you return to the UK.

If you are in the EU then neither of the above apply.

Jusdiz

Thanks for your response - i have been through the CF83 procedure and i have class 2, im a resident in Spain , with no intention to move back (i will retire here) 

pinnks

Then the answer to your question is simply that you will get two pensions - a full pension from the UK and whatever your combined contribution record gives you in Spain.

Spain will do 2 calculations and pay you the higher amount as your Spanish pension:
1. the amount of pension based solely on your Spanish record - the same calculation they would do for a person who had spent their entire working life under the Spanish system.

2. a theoretical amount of pension based on the assumption that all of your contributions had been in Spain, but discarding UK periods (days/weeks/months/years depending on what the Spanish systems uses) that overlap with Spanish periods, i.e. the domestic period is prioritised.  This theoretical amount is then apportioned based on your actual Spanish record.  This is how you get past things like minimum period requirements in the Spanish system.

Both pensions will be taxed in Spain under the provisions in the Double Taxation Agreement between the UK and Spain.

Jusdiz

thanks again for your response , so from your information, it makes sense for me to pay to 18 missing years 

pinnks

Jusdiz said:

thanks again for your response , so from your information, it makes sense for me to pay to 18 missing years 

Yes, as long as you have confirmed with DWP Future Pension Centre that all 18 will improve your forecast to, but not capped at, the maximum of £221.20 per week at this year's rate.

Jusdiz

I will confirm with DWP and check with Spanish Social security - Thank you so much for the information , much appreciated.