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An interesting article by our friend Jessica Cook about British expats and maintaining your National Insurance contributions.
It is important that British expats understand the rules in relation to their eligibility to the state pension.
The purpose of paying Voluntary National Insurance contributions is to secure entitlement to various UK National
Insurance benefits like the basic State Pension. It has agreements with Reciprocal Agreement Countries and European Economic Area (EEA) regarding special benefits.
Living abroad and not paying UK National Insurance Contributions (NICs) may restrict your access to these benefits
– not only now, but also in the future. If you continue paying UK National Insurance while living abroad, you may protect
your entitlement to the following:
▪ A full State Pension.
▪ Particular state benefits in EEA (European Economic Area) as well as some reciprocal agreement countries.
New rules are coming into play from next year, which mean individuals now have to pay National Insurance for more years
than originally stipulated, in order to get a full state pension upon retirement.
The changes come into effect on April 6, 2016, and affect anyone retiring after that date. From this date, rather than
needing the previous 30 years of National Insurance (NI) payments to qualify for a full state pension, retirees under the
new regime will need a complete 35 years worth of contributions. Those with less than 35 qualifying years but
more than the minimum qualifying period will receive a proportionally smaller state pension.
If your total years from the UK and EEA National Insurance exceed 10 years, you will be eligible for the UK State Pension,
but the amount will be proportional only to your UK qualifying years.
The idea of the new pension arrangements being introduced is to offer a new and simpler flat-rate pension. This is expected to
be worth around £155 a week, and will do away with the other elements that currently make up the state pension, such as the
savings credit and additional state pension
It is prudent for British expats to find out how many years of NI contributions they have made to date, therefore allowing them
to see how many years they will need to make up to achieve the full 35 years. For detailed information it is best to visit the
HMRC website: https://www.gov.uk/voluntary-national-insurance-contributions/why-pay-voluntary-contributions, Or
contact HMRC directly if you have specific questions.
You can contact Jessica here
