UK State Pension 2012 - Expat

UK State Pension for Expats – Making Voluntary National Insurance Contributions

While you are an expat, whether working or as a non working spouse, it would be worthwhile maintaining your contributions to the UK state pension system. You can do this by making regular voluntary National Insurance Contributions (NICs).

There are 2 types of NIC that you can make, 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 Insurance 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 Support Allowance (previously known as Incapacity Benefit) and bereavement benefits if you return to the UK

Class 3 contributions have fewer benefits. Namely, they don’t entitle you to the Employment and Support Allowance when you return to the UK.

In addition, Class 3 contributions are more expensive. For Class 2 contributions, the payment 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 commence 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 here.

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

Related posts:

  1. Obtaining a state pension forecast
  2. UK State Pension Basic Facts
  3. Making Up Missed Years

[We have just published a comprehensive new financial planning guide for British expatriates, covering information on National Insurance Contributions as well as a host of other subjects. Please contact us, to receive a free copy.]

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