@dancingspider I have searched the Forum and your post is the most recent in relation to the subject. Jeremy Hunt announced today that Class 2 NI Contributions will be abolished from next year, for those of us who have been paying Voluntary Class 2 NI Contributions in order to add years and make sure we end up with a full state pension, surely we are now not going to be able to achieve that, or have I totally misunderstood today. If there is anyone in the know who is able to advise/know what this will mean and how/if any way there is available to solve this it would be appreciated... Many Thanks...

 

@dancingspider Jeremy Hunt announced today that Class 2 NI Contributions will be abolished from next year, for those of us who have been paying Voluntary Class 2 NI Contributions in order to add years and make sure we end up with a full state pension, surely we are now not going to be able to achieve that, or have I totally misunderstood today. If there is anyone in the know who is able to advise/know what this will mean and how/if any way there is available to solve this it would be appreciated.

If I understood Hunt properly, what he said was he is abolishing the charge for Class 2 NIC for self-employed, which is currently £3.45 a week, not Class 2 itself.

 

@Joppa Thank you, does this mean we will continue to pay our Class 2 Contributions? I have another 7 years for the full 40 years required.

 

 

HMRC wouldn’t automatically allocate the payment to the oldest gap in your records.

It is the responsibility of the customer to confirm with the Pension Service, which tax years will be beneficial for them to pay voluntary National Insurance contributions, then they would need to tell HMRC which tax years they would like us to allocate the payments to.

HMRC does not know which years will increase a customer’s pension and which years won’t.

This information should be provided to the customer by the Department of Work and Pensions before any payments are made to HMRC.

12. Others - Community Forum - GOV.UK

Googled it to find out more info and stumbled across this....

 

Yes I knew that dancingspider and managed to pay back several years I had missed a few years ago and have been paying Class 2 since then with another 7 years left to pay the full 40 years for full state pension, my question was what happens now as I am positive what Hunt said today was that the Class 2 Contributions will be abolished i.e. we will no longer be able to pay them, Self Employed in the UK pay Class 2 & 4 (4 paid as a % of their profits), so it will benefit self employed in the UK as they won't need to pay Class 2 as well as Class 3, but what about the majority of us abroad who pay them as self employed working abroad... we pay Class 2 and it will be abolished.

 

Can I ask when the years required changed?

Because on my pension forcast it clearly states 35 years for full contribution.
Which I have with 42 years of both PAYE and self employed for most of that (but I don't get extra for all those double payments).
My wife has 38 years and her forcast also states 35..

Is yours 40 because of your age?

Oh and a word to the wise, if its still available don't contract out. I've lost £50 a week off my state pension because of that and I'm sure my private pension hasnt covered it....

 

Thanks @Joppa So those of us paying by direct debit the Class 2 NIC's will still get it ed in our gov dot uk profiles that we have contributed? I thought for Full State Pension the years were now 40, I've seen that listed online also, after my Army service I have worked as a PMC/EOD contractor abroad, hence the missing few years that I managed to pay back some of them in arrears and now have 33 years paid but I am sure it says I have 7 more years to pay in order to qualify for the full State Pension, which is more than 10 years away... sorry to hear you guys have lost some of your pension by contracting out... the whole pension scheme is as clear as mud! similar with the Military pension schemes, if you left the military prior to 1975 you are entitled to zero, then up to 88 there are certain criteria to be met to get any pension...

 

Are you sure you need 40 years? From my understanding it is 35 years to qualify for a full UK state pension.

 

I got it confirmed today by a company dealing in finances/offshore s/savings/pensions etc; you guys are correct it is indeed 35 years required! they said Class 2 NIC's will be abolished but it will still be available to those who wish to pay voluntary contributions i.e. those of us who work abroad... Good News!

 

those of us who work abroad...

The issue is not that you work abroad, but that you live abroad. By living abroad, you pay income tax in your new country.

 

Discussion starter · May 8, 2023

Received a letter today from HMRC.

For the last year I pay £163.80 and I get another year added to my UK pension entitlement.

Anyone not doing it and has the opportunity to do it, should be doing it.

Also a few years ago i managed to backdate payments going back several years.

I really found HMRC very helpful when I was setting this all up.

Have I missed something? your original question was about paying NIC's while working abroad in order to reach full state pension, NOT about paying income tax in the country you are working/living in?!!!

 

People tend to lump all "at source" deductions into the bag labelled "income tax", or at least we do in the UK.

The OP's post is about social security contributions and you are right that it has nothing to do with income tax, although it is true that if you work in Spain for a Spanish company, obvioulsy you will be paying Spanish Social Security contributions.

I also recommend anyone who can to contribute to as many schemes as possible, who knows which ones will still be paying out by the time we retire...

At the moment I'm on track to get almost 100% in both countries, but I don't really expect that to happen.