National Insurace Contributions for Uk Expats - The Facts

Employment - National Insurace Contributions for Uk Expats - The Facts

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There seems to be a lot of confusion regarding the cost of National assurance Contributions and the benefits of the state pension for Uk Expats.

What I said. It isn't the final outcome that the actual about Employment. You check out this article for information about a person wish to know is Employment.

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What I want to accomplish with this post therefore, is to give you an idea of the basic facts regarding the basic state pension and the considerable steps that you would need to take, should you want to make contributions on a voluntary basis and/or make up missed payments.

Armed with this information, you will then be in a position to make an educated decision on how to proceed.

Basic Facts:

To accomplish a full basic state pension you need to have achieved a confident number of qualifying years. A qualifying year is a year where one of the following applies:

• you have adequate earnings to pay National assurance Contributions

• you are treated as having paid National assurance Contributions

• you are credited with adequate National assurance Contributions

If you are a man born after the 6th of April 1945 or a woman born after the 6th of April 1950, then you need to accomplish a total of 30 qualifying years in order to accomplish the full basic state pension.

For tax year 2011/2012, the full basic state pension will be Gbp102.15 per week. This will growth annually by the highest of prices, earnings or 2.5 per cent.

If you have less than 30 qualifying years, your pension will be reduced on a pro rata basis. E.g. If you only had 15 years, you would get Gbp51.08 per week (15/30 = 50% of Gbp102.15).

Step 1 - Find out where you are now.

Your first step should be to contact the state pension forecasting team in Newcastle and ask for a pension forecast.

This will tell you the number of qualifying years that you already have as well as the level of state pension that you can currently expect.

Their telephone number is +44 191 218 3600. If you contact them, they will then send you the completed relevant form for you to sign and return to them. (Remember, as with all communications with Hmrc, to have your Ni number handy when you call.)

Alternatively, if you want to speed the process up, you can download the relevant form from their website and send it directly to them. The address to send it to is:

State Pension Forecasting Team, The Pension Service, Tyneview Park, Whitley Road, Newcastle upon Tyne, Ne98 1Ba, England.

Allow them a few weeks to get back to you.

Step 2 - Make Voluntary Contributions

The next step, if you don't already do so, is to start development regular voluntary contributions. There are 2 types of contribution that you can make, whether Class 2 or Class 3.

To qualify for Class 2 Contributions, you must have been 'ordinarily' employed or self-employed immediately before you went abroad. (If you are in doubt as to whether you qualify, contact National assurance Contributions - International Caseworker Team on +44 191 225 4811).

If you don't qualify for Class 2, then you need to make Class 3 contributions.

Class 2 contributions have the following benefits:

• they count towards your State Pension when you retire

• they entitle you to the Employment and preserve allowance (previously known as Incapacity Benefit) and bereavement benefits when you return to the Uk

Class 3 contributions have fewer benefits. Namely, they don't entitle you to the Employment and preserve allowance when you return to the Uk.

In addition, Class 3 contributions are more expensive. For Class 2 contributions, the cost is equivalent to Gbp2.50 per week (2011/2012). Class 3 payments are equivalent to Gbp12.60 per week (2011/2012)

As you can see, wherever possible, it makes sense to pay Class 2 Contributions.

To initiate contributions (Class 2 or 3) you need to complete the form Cf83, which can be found on the last 2 pages of the Ni38 document. You can find a copy by Google searching "Ni38".

Payments can be made monthly by Direct Debit or with an yearly payment.

Step 3 - Make Up Missed Years

If you haven't been development any contributions for some time and still do not have 30 qualifying years, then you can make up missed years going back for the last 6 years. Your State Pension Forecast (mentioned above) will tell you how much you need to pay to make up each of these years.

Instructions on how to make payments for these missed years will be on the forecast letter.

I hope you get new knowledge about Employment. Where you can put to use in your evryday life. And most significantly, your reaction is passed about Employment.

Posted in: Contributions, Expats, Insurace, National