pathumseb
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Post by pathumseb on Oct 3, 2018 7:15:13 GMT 7
I need to pay some back to get my contributions updates, some 8000 GBP, I have access to these funds but really wonder if it is worth it, or would a private scheme be better? My biggest concern is the ever changing age of retirement and years of contributions needed, one I am updated, I would still have around 16 years of contributions to make, which is fine from a financial standpoint.
They really should teach this stuff in school- if I was stuck on a TEFL salary in Nakhon Nowhere I would be up the swanny good and proper
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AyG
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Post by AyG on Oct 3, 2018 8:09:53 GMT 7
Need a bit of information first:
- How old are you? - How many years' contributions have you made so far? - In which country do you plan on retiring?
For me, I have over the number of years required (10) to get a pension (albeit a reduced one), and since I'll be retired in Thailand I won't get the inflation link. I therefore concluded there was no point in making additional contributions.
There might be a case for making contributions if you don't have any other post-retirement income (e.g. from investments). However, if retiring to Thailand you'd be at the mercy of the GBP/THB exchange rate.
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siampolee
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Post by siampolee on Oct 3, 2018 8:45:48 GMT 7
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pathumseb
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Post by pathumseb on Oct 3, 2018 10:16:51 GMT 7
Need a bit of information first: - How old are you? - How many years' contributions have you made so far? - In which country do you plan on retiring? For me, I have over the number of years required (10) to get a pension (albeit a reduced one), and since I'll be retired in Thailand I won't get the inflation link. I therefore concluded there was no point in making additional contributions. There might be a case for making contributions if you don't have any other post-retirement income (e.g. from investments). However, if retiring to Thailand you'd be at the mercy of the GBP/THB exchange rate. 32 5 years so far- kind of lost track about how many years I have been overseas. I plan on retiring in Thailand
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smokie36
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Post by smokie36 on Oct 3, 2018 12:31:01 GMT 7
Need a bit of information first: - How old are you? - How many years' contributions have you made so far? - In which country do you plan on retiring? For me, I have over the number of years required (10) to get a pension (albeit a reduced one), and since I'll be retired in Thailand I won't get the inflation link. I therefore concluded there was no point in making additional contributions. There might be a case for making contributions if you don't have any other post-retirement income (e.g. from investments). However, if retiring to Thailand you'd be at the mercy of the GBP/THB exchange rate. 32 5 years so far- kind of lost track about how many years I have been overseas. I plan on retiring in Thailand You really want your income to continue to rise as you get older in line roughly with inflation at least. A UK state pension living in Thailand is a punishing life and not one I'd wish on anyone as the years drift by....
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smokie36
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Post by smokie36 on Oct 3, 2018 12:31:51 GMT 7
However if you are 32 and have made no provision then you should start to do so NOW.
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Post by Fletchsmile on Oct 3, 2018 13:18:20 GMT 7
Seb, Keep educating yourself and researching on this subject. There are some quite knowledgeable people on here, thru experience as well as accounting/finance qualifications. There are also a few threads on BM that touch on this. A few key pointers: 1) Bear in mind the goal posts keep moving and rates keep changing 2) If you will be short of the full state pension, there are 2 main options that could apply: i) pay back years you've missed ii) start paying voluntary contributions going forward 3) You currently need 35 years to get the full pension. If you are 32 and have 5 years already then that's plenty of years to give you some flexibility of how you do it. You have 35+ years to retirement so enough to cover it by future voluntary contributions if rules don't change. This may be a better option than paying back years depending on what they cost 4) You can get in touch with HMRC - up in Newcastle if I recall, and get a statement of how many years you have and options for backpaying or making voluntary 5) If you can pay voluntary contributions going forward and if you are eligible then Class 2 contributions are significantly cheaper than Class 3. Class 2 are only 2.95 a week and Class 3 are 14.65 a week. So 153.40 Class 2 a year vs 761.18 Class 3 a year A lot of people just paid Class 3 automatically and weren't aware they could pay Class 2. Rules I believe are changing again though, and am not quite sure where they are up to. Myself I pay Class 2 and at 150 quid a year is an easy decision to make. Just be careful I don't end up with too many years over the 35 now needed for the max pension or it is wasted. Now in your case if you have 5 years already, then you need another 30 under current rules. IF you could pay class 2 voluntary going forward for 25 extra years, then the cost would be approx 4,602 pounds. This doesn't include annual increases of a few % each year. But the point is, if possible for you could be significantly cheaper than the 8k you mention, and that's to get the full 35 years to boot i.e paying future contributions if you can do Class 2 may be a better option than pay back 5) Resources. As mentioned there's more info around on this on BM threads if you search. Below is a link about voluntary contributions which I recommend you read, from the pensions advisory service: www.pensionsadvisoryservice.org.uk/about-pensions/the-state-pension/voluntary-ni-contributionsBelow is also a useful link from HMRC. There is a booklet called NI38 which gets updated every so often. Again I strongly suggest you read it. There's also some of the relevant forms usually at the back like CF83 for applying www.gov.uk/government/publications/social-security-abroad-ni38or the actual .pdf file assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/668585/NI38_12_17.pdfiii ) The HMRC website also has useful info to look around too. Feel free to ask on here. I've looked at it dozens of times over the years, though it does move around and rules change ![LOL](//storage.proboards.com/6207754/images/7WqwXnsEcase2oKDoa3y.png) once you've an idea of what you're looking for it may be easier for us to find Cheers Fletch ![:)](//storage.proboards.com/forum/images/smiley/smiley.png)
{Edit: post edited slightly to recognise the "New State Pension" which has been effective for retiring on/after 6 April 2016 where 35 years are required.
Note:The "Basic state pension" (2010 onwards) applied before that based on 30 qualifying years. Prior to that it was 39 years for women and 44 for men}
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Post by Fletchsmile on Oct 3, 2018 15:12:16 GMT 7
Seb, You spurred me into checking my own records. Something I've been meaning to do for a while but not got round to ![LOL](//storage.proboards.com/6207754/images/7WqwXnsEcase2oKDoa3y.png) It used to be filling forms and sending to Newcastle. But seem like HMRC has now moved into the 21st century and you can now check online. Registration process takes a few minutes, but not that difficult. Then you will need to keep getting 6 digit access codes like OTPs for banking. This can be via sms or voice message to your phone or there's a HMRC app to download. I went for the app as it's easier if travelling worldwide and you just need internet connection. It was a little fiddly to set up and you need your NI number, passport details including number, expiry and your name as is on there. Just tried mine. Created an ID on internet. Downloaded the app. Got the access codes and it all works. Here's where to start on checking your NI records www.gov.uk/check-national-insurance-recordIt tells me I have 22 full years. X number of years left to contribute and Y number of years I didn't do full contributions (when I decided voluntary contributions weren't worth it) So thanks for spurring me into action ![:)](//storage.proboards.com/forum/images/smiley/smiley.png)
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Post by Fletchsmile on Oct 3, 2018 15:19:46 GMT 7
Just to add on the records you can check above online, it tells you which years are not full. You can click on each year it says "year is not full" and "view the details" It then shows whether you can backpay and make up the shortfall as well as a link on making voluntary contributions 2006-2007 is the earliest not full year I can make up the shortfall for and costs 689 quid In my case given I have 22 out of 35 years already and have more than 13 years left to contribute I see no reason to backpay at 689 quid when I can gain those years by making Class 2 contributions at 153 quid a year
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Just logged in again to their website from scratch at the following using the same ID etc
When I do it says:
Your state pension summary: You can get your state pension on XX XXX 20XX Your forecast is XXX a week, XXX a month XXXX a year
this assumes you contribute until retirement and the most you can get
it also gives a figure based on your contributions up to 5 April 2017 so you can see the reduced amount you'd get because you haven't made full contributions
Quite useful too ![:)](//storage.proboards.com/forum/images/smiley/smiley.png)
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Post by Fletchsmile on Oct 4, 2018 12:10:05 GMT 7
One thing I forgot to add. For the new state pension you need a minimum of 10 years to get anything.
So in Seb's case if it he has 5 years already, regardless of whether he decides to aim for the full pension or not, I'd recommend he makes up at least an additional 5 years somehow. That could be via back payments or via voluntary contributions going forward.
As stands he has only 5 years contributions so gets 0/35 x full pension, i.e nothing
If he makes an additional 5 years contributions either by back paying or future voluntary contributions he would at least get 10/35 of a state pension
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pathumseb
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Post by pathumseb on Oct 4, 2018 20:30:15 GMT 7
So, after 40 mins in a queue the good news is I can pay back at a class 2 rate, the bad (well, more annoying news) is that I need to send a form by ducking POST!!!!!. Can I just pay my years upfront so I don't need to deal with these bureaucrats again?!!
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Post by Fletchsmile on Oct 5, 2018 16:25:54 GMT 7
So, after 40 mins in a queue the good news is I can pay back at a class 2 rate, the bad (well, more annoying news) is that I need to send a form by ducking POST!!!!!. Can I just pay my years upfront so I don't need to deal with these bureaucrats again?!! ![LOL](//storage.proboards.com/6207754/images/7WqwXnsEcase2oKDoa3y.png) Where would we be without bureaucrats and paperwork ?
Good news that you can pay back at class 2 rates. That should make it significantly cheaper than the 8k you mentioned at the start. (Note: In my system it says I can only back pay at 689 pounds a year which is presumably linked to Class 3. So in this case I wouldn't back pay, and would just contribute going forward at 2.95 weekly rate. But if it's only the 2.95 a week for back pay would make sense)
If you want to back pay as many years as you can with a lump sum that would help ![LOL](//storage.proboards.com/6207754/images/7WqwXnsEcase2oKDoa3y.png) Think max is 6 but I can't recall. Just check back paying is Class 2 not Class 3
Going forward for only 153 quid a year it would likely be worthwhile making class 2 voluntary contributions. Complete a Direct Debit form from a UK bank account at the same time as saying you want to make contributions in future, and sending all these forms in. I did this and they now just take the money directly from my UK bank account every 4 weeks. Haven't had anything else to do with it for years, except just make sure I keep some funds in my UK bank account ![LOL](//storage.proboards.com/6207754/images/7WqwXnsEcase2oKDoa3y.png) They send a letter and increase the rate a bit each year. I've just signed up to go paperless.
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Post by rgs2001uk on Oct 5, 2018 21:03:24 GMT 7
I have spoken to Newcastle on the phone on numerous occassions, very helpful people.
Anyway back to the topic in hand.
In your situation, I would pay them and keep your payments up to date.
A, People change. B, countries change. C, circumstances change. D, the UK Gov't may well raise the oap rate to 70 or even 72 in your lifetime.
If I was you I would be pumping at least half my salary into a "pension fund" of some sort.
I cant be assed writing reams of these skint pommie pensioner stories, i was ridculed at laughed at on other forums for posting them, water off a ducks back.
Ozzy lad retired out here at 60, now back in the ME at 66 years of age, underfunded.
Brit lad, 67, hasnt lived in the UK for 40 years, now headed back, begging bowl in hand.
Set up monthly payments, deal direct with UK invest trust companies and make a standing order to pay into at least 2, 3 or 4 is better.
Ignore the two week millionaires and other old china hands, they know ferk all, believe I have worked alongside them.
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