Topping up NI contributions – lived abroad for 20 years

Halfaap

Hello!

This will be a long post as I will try to get as much detail in as I can. But in short: I live abroad and would like to contribute enough to earn a full UK state pension, but am stuck between contacting HMRC and the DWP for information on exactly how much I need to pay back. 

I am 44 years old, and have lived outside of the UK for 20 years. Before emigrating, I worked full-time in the UK, and after I moved I worked a further 13 years before going self-employed (which is still the case now).

A while back I filled in form CF83 and received a letter in July 2023 stating that they have accepted my application to pay Class 2 NICs by annual payment. The letter also contains a list of 17 years that I can pay back, from 2006 to 2023, all of which are Class 2 payments (totalling around £2771). I have until April this year to pay it back, so I had left it for the time being. The letter says that I have 9 qualifying years of NICs up to 5 April 2023.

I have a Government Gateway account, and on there it says that I am forecast to receive a UK state pension in 2049, at the age of 68, at £219.24 a week. On that page it says I have shortfalls on my record, and on page where shows the gaps, it matches the years shown in the letter but the amount per year to pay back is a much higher figure (I was told on the phone that this is the Class 3 amount, but since the letter says Class 2, this is binding).

Last year I received a letter asking for £179.40 to contribute towards the 23/24 tax year, which I paid.

I contacted HMRC (on +44 191 218 3600) to ask how I can pay the 17 years back – to check if the amount I paid last year arrived, and to see if the bank account and reference number I used for it is the same for the shortfall. They answered this question (the 23/24 amount was received, and they recommended a different bank account but the same reference), but told me that before I pay back the whole amount, I should call the DWP on +44 191 218 7777 because it might be that I some of these previous years would give me no benefit towards my state pension and that I might be wasting money.

So I called the DWP, and they said that they could only help me if my state pension is due within the next six months, and that I should call the Future Pension Service on +44 191 218 3600 – the same number I had already called! I told them that they told me to call them, and they insisted that they had couldn't help me and that I had to call the FPS.

So I called back the Future Pension Service again, and – you guessed it – they insisted that they could not help me, and I definitely had to go back to the DWP. I explained that the DWP was insistent that they wouldn't know how to deal with me unless I was about to received my state pension, so they put me on hold for 10 minutes to "ask what to do", before the phone hung up before I was able to speak to anyone again.

So now I'm stuck between two departments, neither of which can give me the answer of if I need to pay back the full 17 years. Every time I try to call either of them, it takes a lot of time mowing through the menu system before finally talking to a human, and when they then can't actually help me and refer me to another dept, it is a bit disconcerting. So now I am asking here in the hope that someone might know the answer!

My understanding is that I need to have 35 years of NIC contributions, however I have read on here that since I started paying into the system long before 2016, that this 35 year rule might not be correct. I have also read about being 'contracted out' of the state pension – I have no idea if this was the case back when I was working in the UK, but I was not signed up to any private pension scheme at the time. I am a bit confused about the 9 years of contributions that I had already paid, since I am vaguely certain that I started working in the UK around April 1998 and left around April 2005 (which is 7 years).

My simple maths suggests that I should just pay back the 17 years, plus the 9 years that I have already, plus the one I have paid = 27 years. This means that I could in theory continue to pay annually for another 8 years, and I should be able to claim the full state pension when I am 68. However I am sure that it is not as simple as this, so I am basically wondering if any experts might be able to give me a better explanation of what I should be doing?

Thanks!

molerat

The simple safe rule is as long as you don't total more than 30 years 2015-16 and earlier then all those years will count. You only need to buy one back year as you have sufficient time going forward but would need to fill all those years and if you stop working it would be at class 3 which is heading towards £1K per year. 35 years is of no relevance to those born this century.

Halfaap

molerat said:

The simple safe rule is as long as you don't total more than 30 years 2015-16 and earlier then all those years will count. You only need to buy one back year as you have sufficient time going forward but would need to fill all those years and if you stop working it would be at class 3 which is heading towards £1K per year. 35 years is of no relevance to those born this century.

Thank you for your reply My thought is that, since I have the money already lined up to pay the 17 years, and with an assumption that it'll just be more expensive as time goes on, then I might as well just pay for them – and as you say, since they are listed as Class 2 at the moment, if for some reason I was to stop working entirely then it would cost even more in future.

So if I am reading correctly: you would recommend that I simply pay off the 17 years and to continue paying for at least another 8?

pinnks

A small but significant point to note is that +44 191 218 3600 is not HMRC, it is DWP FPC.  I have no idea why they told you to call the International Pension Centre, or why, when you called them they could not help you.  The HMRC number is  + 44 191 203 7010.  It sounds as though everyone may have been talking at cross-purposes.

The fact that you have 9 years on your record when you were expecting 6 or 7, probably relates to up to 3 freebie years call juvenile credits for the years you turned 16, 17 and 18 if those years were not otherwise filled by contributions through work.  

To answer your question about how many years and which ones, it would be helpful to see an up-to-date pension forecast.

molerat

It is one of the options that will work.  If you can post up a few more details from your forecast a better understanding of how it will play out can be made, it is not a linear buy 1 pre 2016 year = 1 year less to buy in total.  I assume your forecast currently shows £61.24 ?

Current weekly £££.pp amount accrued up to April 2024 (or 2023 as some may not have been updated so please specify if so).
Number of full NI years 15-16 and earlier
Number of full NI years 16-17 and later
Tax year you reach state retirement
Any COPE amount.  If you have "You've been in a contracted-out pension scheme" on your forecast then click
here https://www.tax.service.gov.uk/check-your-state-pension/account/cope whilst logged into your tax account
Years which show available to buy.

Halfaap

pinnks said:

The fact that you have 9 years on your record when you were expecting 6 or 7, probably relates to up to 3 freebie years call juvenile credits for the years you turned 16, 17 and 18 if those years were not otherwise filled by contributions through work.  

Ah! Well that probably explains that then! Thanks

molerat said:

It is one of the options that will work.  If you can post up a few more details from your forecast a better understanding of how it will play out can be made, it is not a linear buy 1 pre 2016 year = 1 year less to buy in total.  I assume your forecast currently shows £61.24 ?

I am guessing that the forecast is just what is shown when I log into the account, I have attached it at the bottom of the post.

Current weekly £££.pp amount accrued up to April 2024 (or 2023 as some may not have been updated so please specify if so).
Number of full NI years 15-16 and earlier
Number of full NI years 16-17 and later
Tax year you reach state retirement
Any COPE amount.  If you have "You've been in a contracted-out pension scheme" on your forecast then click
here <link redacted> whilst logged into your tax account
Years which show available to buy.

£67.56 a week up to April 2024
9 years full NI years before 2016
1 year contribution after 2016 (which was as a result of the letter they sent last year)
State retirement tax year is 2048/2049
I don't know a COPE amount, but if I click on the link you have given me it just shows me the same forecast that I have attached below.

molerat

If there is not a statement about contracting out on your forecast then there will not be a COPE amount and clicking that link whilst logged in to your account would therefore have no effect.  Subject to that being the case then buying those 17 years will take you to £170.64 leaving 8 more years required, buying the 10 pre 2016 years switches your 2016 starting amount from old to the new scheme calculation so you will need 35 years total.  The COPE amount, if there is one, is an important factor when buying pre 2016 years.

My assumed £61.24 to £67.56 is due to the additional £6.32 from 23-24.

Halfaap

molerat said:

If there is not a statement about contracting out on your forecast then there will not be a COPE amount and clicking that link whilst logged in to your account would therefore have no effect.  Subject to that being the case then buying those 17 years will take you to £170.64 leaving 8 more years required, buying the 10 pre 2016 years switches your 2016 starting amount from old to the new scheme calculation so you will need 35 years total.  The COPE amount, if there is one, is an important factor when buying pre 2016 years.

My assumed £61.24 to £67.56 is due to the additional £6.32 from 23-24.

Wow, you are knowledgeable

Yes there's definitely no mention of COPE anywhere I can find.

So ultimately, I think the right thing to do is to pay for those 17 years, and to continue to paying into the system each year from now on (for at least another 8 years),

Thank you!

MaxB93

My sympathies for Halfaap and his experiences, which I may be about to replicate.

I am in a similar situation but not identical so I will post my question in a separate thread. I'm impressed by the helpful expertise here.

PurpleMini

I also have Qs and sympathies with Halfaap and like MaxB93 will post my query in a new thread. Like Halfaap i have been told to contact Future Prnsion Centre, then International Pension  Centre, then HMRC and then told to fill out the form CF83, but i am worried that completing the form will give UK excuse NOT to pay my full pension ie giving them info they appear not to have about working abroad andpaying  into another Soc Sec system.

Suhusa

The UK pension system does not care if you paid anything into another pension system. On the contrary, depending on which country's system and when you paid in, you can use years paid in one country to get over the minimum eligibility requirements in another country.