Am I entitled to Class 2 contributions?

pecunianonolet

Hi there,

I came to the UK in July 2009 and started a job (full time paid internship) and worked from August 2009 until end of February 2010. During that time I was still enrolled at University abroad and the internship was part of the course. This gave me enough contributions for tax year 2009/2010. In March 2010 I left the UK to finish my studies abroad and returned back to UK in January 2012.

While I studied abroad I also worked there part time in various jobs. 

Looking at my records I have now for tax year 2010/2011 and 2011/2012 no contributions and a very small gap to fill for tax year 2012/2013.

However, I now wonder if I am entitled, either for the full period or for parts of the 2 years working & studying abroad to pay class 2 contributions instead of the more expensive class 3?

The Future Pensions Centre said that under normal circumstances I would have no problem to fill up required years for a full state pension. However, I know for a fact that I am not getting 35 qualifying years together (moving abroad) so if I could top up these extra 2 years it won't be any harm.

Just trying to get a sense of the forum experts first before attempting to fill out the confusing CF83 document. 

Cheers!

eskbanker

pecunianonolet said:

I know for a fact that I am not getting 35 qualifying years...

35 years has no significance for those born in the 20th century, so your planning should be based on an accurate and up to date forecast of your personal entitlement:

https://www.gov.uk/check-state-pension

pinnks

eskbanker said:

pecunianonolet said:

I know for a fact that I am not getting 35 qualifying years...

35 years has no significance for those born in the 20th century, so your planning should be based on an accurate and up to date forecast of your personal entitlement:

https://www.gov.uk/check-state-pension

Or, I believe, receiving a NI number on arriving in the UK before 6 April 2016.

That said, it would appear that OP's starting amount may well be based on the new rules and so 35 years may turn out to be appropriate in this case...

pinnks

I would suggest OP has a read of Social Security abroad: NI38 - GOV.UK (www.gov.uk).  It is not clear to me that voluntary NI can be paid for the years in question, either at Class 2 or 3 unless time in another EU country helps get past the 3 consecutive years of UK residence.  If they are payable then my guess would be Class 3 for most or all of the weeks in question.

It may be better to forget those years and focus on getting Class 2 when OP leaves the K at some future date.   

pecunianonolet

pinnks said:

I would suggest OP has a read of Social Security abroad: NI38 - GOV.UK (www.gov.uk).  It is not clear to me that voluntary NI can be paid for the years in question, either at Class 2 or 3 unless time in another EU country helps get past the 3 consecutive years of UK residence.  If they are payable then my guess would be Class 3 for most or all of the weeks in question.

It may be better to forget those years and focus on getting Class 2 when OP leaves the K at some future date.   

Thanks, will have a read of the guidance notes. HMRC record says I need another 20 years to get full state pension. One year I definitely buy as it is only £174 and I basically have the current tax year sorted too so leaves me technically with 18 years left to contribute. 

The 3 years in question are shown in my tax account and I could just pay for them online but if I could get the 2 years in questions at a reduced rate, that would be ideal.

It's a good point you make I have not thought about actually. Forget the 2 years all together costing £824 each, when class 2 from abroad only costs £180. So for the cost of 2 years at class 3 I could buy 9 full years of class 2 when abroad, working out at 7 extra years for the same cost. 

pecunianonolet

Just want to provide an update to the above.

On 8th October I submitted the CF83 form online and provided all the info they asked for. Thought, according to HMRC checker, that I may be lucky if I still get a response this year. 

Today I received a letter and HMRC confirmed to me that

2010/2011 --> Full entitlement of Class 2 contributions for 52 weeks at a total cost of £163.80 (previously £824.20)

2011/2012 --> Part entitlement for Class 2 for the weeks I was working and the remaining weeks for Class 3 now at a total cost of £506.70 (previously £824.20)

2012/2013 --> Unchanged and as I could already see in the HMRC account for £174.35

HMRC account hasn't updated yet and still shows the £824.20 for both years so guess I'll have to call them and just pay it all over the phone so they can add it to the correct years.

pinnks

Good outcome.  

The online numbers will not update to show class 2 rates - it just doesn't work like that.  And, you therefore cannot use the new functionality to pay those years.

You need to pay by bank transfer or similar using a reference number in the format NI number IC surname and first names, using as much as will fit in your bank's reference box.  Also call HMRC so that they can mark your record to show which years you are paying. 

pecunianonolet

pinnks said:

Good outcome.  

The online numbers will not update to show class 2 rates - it just doesn't work like that.  And, you therefore cannot use the new functionality to pay those years.

You need to pay by bank transfer or similar using a reference number in the format NI number IC surname and first names, using as much as will fit in your bank's reference box.  Also call HMRC so that they can mark your record to show which years you are paying. 

Thanks but before I do some guess work on any reference numbers I will phone them and ask them to either send it to me by post or, if they can, take payment directly while on the phone with them. Still got time until 5th April so no need to pay anything until March. The funds can sit comfortably with me until then earning me some interest ;-)

pinnks

Or you could read the letter responding to your CF83 as that normally tells you how to pay and to use the reference format I set out.

pecunianonolet

pinnks said:

Or you could read the letter responding to your CF83 as that normally tells you how to pay and to use the reference format I set out.

That's all the info they give in the letter so giving them a call and ask for the details is probably the easiest and pay over the phone. 

pinnks

Or you could have a look at the issue on HMRC's customer forum - here for instance How to Pay Voluntary National Insurance Contributions from Abroad - Community Forum - GOV.UK