Contribute or not?


(Patrick Bell) #1

Myself and my wife are microentrepeneurs (Professions Liberales). For myself I will receive a full UK pension in 5 years time but I have been puzzling over the best course for my younger wife who at 15 years younger than me has a need to accumulate pension "rights". She currently has 10 years qualifying contributions for the UK pension.

We are trying to determine if its better to top up her contributions in the UK or contribute to CIPAV.

As far as I can determine, she can contribute 8.23% of her yearly income of 10000€. By my calculations this means 823 / 3178 x 525 = 135 points. According to the Connexion guide this equates to about 70€ pa times 20 years ... 1400€ pa which in other word... an achieved pension of little more than b#gger all

On a low income we obviously want to maximise the value of any payments, so... any advice?

Pat


(Andrew Hearne) #2

Patrick, you have no choice about contributing in France - if you work then it's compulsory :-(

As to whether you should also pay volontary class 2 contributions in the UK (which I do as well as compulsory here - I'm on my third caisse), I'd say yes as they're so small (a couple of quid a week if I remember correctly) ;-)


(Peter Bird) #3

Andrew, I left the UK for good (after having been in France on and off since the '70s) in the '80s. I carried on paying my self-employed stamp in the UK. About 7 years ago I received a letter from Newcastle telling me I had contributed 30 years worth of NI Contributions which would be enough to assure me receiving the full UK state pension. I phoned Newcastle just after to confirm this and a 'conseilleur' told me it would be a waste of time contributing further as I could not accrue any more benefits from the contributions so I cancelled the standing order. Normally I should receive my UK state pension on my normal UK retirement date.


(Andrew Hearne) #4

Thanks, Peter, that's my understanding too. I asked Newcastle for an update last year and I've still got a way to go before I'm fully paid up (I'm only 50 but I'mve got around 26 years paid up already) but, like you, I'll cancell the direct debit once I've reached the full contributions - they're very honest and helpful in Newcastle, no-one would ever tell you to stop paying in France!

à +


(Peter Bird) #5

That's too true Andrew. I heard a report a couple of years back saying the UK govt were changing the 30 year rule. I have no idea whats happening though I did ask Newcastle last year to update me on what's happening in case I need to re start contributions etc. I still haven't received a reply so i'll have to chase them up again. Other govt regulations changed the retirement dates as in France which resuletd in my retirement date being put back 7 months in the UK.


(anon62051519) #6

Not sure how one can recommence paying contributions should they change the NI law again. What if they say you have to have 40 years contributions instead of 30... and you are already, say, 61?

Would this mean one would have to cough up a lump sum to make up any shortfall? I'd be very surprised if this happened (though one never can tell).


(Andrew Hearne) #7

That used to be the case, Paul, my Mum coughed-up her shortfall to get a full pension. No idea if it's still the case though. They do keep moving the goalposts though - I'll have to wait until I'm 67 or 68 to get anything :-(

Peter, they were pretty quick with my update - you can apply online for it ;-)


(anon62051519) #8

Hi Andrew. I think the lump sum payment adjustment was really just used when, for example, someone hadn't paid their stamp for a couple of years during their working life for some reason... and that was the option to enable payment of a full pension. That, as opposed to the Govt changing the goalposts. There would be one big stink if it happened.


(Sarah Williams) #9

Hi Patrick,

The maximum 'new' UK state pension is based on 35 qualifying years/NI record.

I checked my pension statement to find a shortfall of a few years' contributions then contacted HMRC about paying Class 2 contributions as I work in France (also a micro/e - Prof Lib). Easy to set up and not that costly.


(Andrew Hearne) #10

not sure if it's 30 or 35 years, just looked at my statement and it isn't specified, just that I've got 25 years and to keep paying the volontary class 2 to get a full pension (it's not far off £102 rather than £115 a week). the government site says you need 30 years, but it seems to be in the process of being reformed and sneakily changed to 35 years - see here for more details - that's bought me up-to-date!


(Sarah Williams) #11

Definitely 35 years - the new single tier state pension started this month.

I, too, have a long wait ...... Until my 67th birthday!


(anon62051519) #12

Hi Sarah. I too have to wait till I am 67 for my pension. A couple of years back, I wrote for a pension forecast and they told me that as I had paid 30 years NI contributions, that that was enough (due to good old Gordon Brown forcing a change in the law). I was advised to stop paying any voluntary NI contributions as it was pointless.

Based on what you say above, is it possible that I should start again and nobody has informed me? Its the first time I've heard 35 years being mentioned.


(Sarah Williams) #13

Hi Paul,

I would definitely give them a call - I have found both DWP and HMRC really helpful when I have contacted them.

My understanding is that depending on whether you are working or not determines which contributions you make. I have been able to pay NI contributions for each year I have worked in France.


(Andrew Hearne) #14

First time I'd heard of the 35 years too, Paul, but following Sarah's comment I checked - see the link above - and it is now the case :-(

my situation too, Sarah, I work here and still pay volontary class 2 in the UK (and will do for another 10 years rather than 5, and like you both, will have to wait until I'm 67 to claim)


(anon62051519) #15

Thanks. I'll check it out next week. I live in hope that, as I had already reached my 30 years contributions, and received my pension forecast, perhaps the perceived shortfall may not apply.

There's always bloody something to worry about......!


(Steve Hayes) #16

Seeing as it has just changed, and as the changes have been "masterminded" by IDS I think the most sensible thing to do is get advice from the civil service on the record so if it's wrong advice you have some claim that they should put it right.

this page implies a time limit of 6 years https://www.gov.uk/national-insurance-if-you-go-abroad

and says you should ask on this page
https://www.gov.uk/government/organisations/hm-revenue-customs/contact/national-insurance-enquiries-for-non-uk-residents

such as here
https://online.hmrc.gov.uk/shortforms/form/CNR_NIC_SEF

-- 

(anon62051519) #17

Planning to do just that tomorrow Steve.


(Sue Young) #18

Hope you didn't have a private company pension and were 'opted out' of some NI payments. My husband won't receive his pension until he's 65, and has 41 years contributions ( left school at 16) He receives a private pension but when he gets his OAP he won't receive the much vaunted flat rate of £151-no he will receive £119. My OAP -also with over 30 years contributions-when I eventually receive it at the age of 66 will be £130. At this distance I don't remember being told that being opted out would affect your OAP and people may well say ' but you have a company pension '-I thought that was the idea. You saved to make yourself better of when you retired.


(anon62051519) #19

Have you payed in, opted in, opted out, shaken it all about...and done the hokey cokey, remembered your password, NI number, date you retired.........aaaarrgh!

Don't you just get sick of all this crap? Isn't it enough that you've worked all your life, payed your bills on time, and tried to do the right thing? Surely that should be enough to ensure you can now relax with a few bob in your back pocket.?


(anon62051519) #20

I phoned the Overseas Pensions people today.. as well as the N.I Voluntary contributions office. I explained I had 30 years NI contributions already paid (31.5 as it turned out) and that I had heard about the new 35 year rule.

Curiously, I was told by two different people that the 35 year rule wasn't actually the case yet! It wasn't the law, and that no instructions had been given to staff to advise otherwise.

I asked where I stood vis a vis buying top up contributions should the 35 year rule come into play? I was told that I had until 2019 to make that decision. As I alreadly had payed 31.5 years...the lady inferred (as opposed to advised) that I should sit still and do nothing for now.

For info:Voluntary Class 2 contributions are £2.65 per week........Class 3 contributions are £13.25 per week. As I would be looking at Class 3, I think I will do nothing for now.

Bit of a conundrum.