National Insurance 'Stamps' while not working in UK

[reddog]

Hello - I have not worked in the UK since Dec 31st 2010. Due to a combination of a fantastic very long holiday and now working outside the UK I have not paid any National Insurance Stamps.

Was wondering if I should bother to actually catch up, obvious George Osbourne has commissioned a report into whether NI should be abolished and just rolled into income tax, so I do really want to pay if it will no longer exist. What are the options for catching up if it isn't abolished/how do other contractors handle this?

Thanks in advance.


Admin note: Just some general info on NICS: National Insurance – an IT contractor’s guide

[SueEllen]

If you are working in an EU /EEA country where your social tax contributions count towards your NI entitlement in the UK then don't bother.

If you aren't working and have simply disappeared, or are working in a country where your social tax contributions don't count then the answer is it depends.

I would have a look at the pensions service (google it) and follow the steps to see if you have made enough contributions for a state pension. As they have brought the amount of years you need contribute to get a state pension down.

This is however age dependent. If you are 50 odd then yes pay the extra contributions if you haven't made enough, but if you are 20 odd then I would risk not paying.

I had that choice in my mid-20s while working abroad and didn't pay. I was actually advised by someone to wait until I was about 45 to see if I needed to pay extra years. The UK government then raised the retirement age and then brought the amount of years you need down to qualify down to 30, so any money I would have paid would have been a waste.

While there was loads in the news about abolishing NI in the UK it's actually made more complicated due to EU integration. For example you can legally pay social tax (NI) in one EU country but you can work for something like up to 3 years temporarily in another EU country. This isn't a con it's actually on HMRC's website through off course it depends on how you work/are employed.

[Fred Bloggs]

That makes a lot of sense, when I got a pension forecast I have more than enough years of contributions already for a state pension so it would be a waste of money paying NI unless I had to.

[reddog]

I'm in Switzerland, so I cannot use the reciprocation scheme unfortunately.

Thanks for the advice, pretty useful. I'm 34 so right in between your 2 examples. If I wait until I am 45 to find out do you think I will have to pay roughly the same amount (in real terms)?

[SueEllen]

I'm in Switzerland, so I cannot use the reciprocation scheme unfortunately.

Thanks for the advice, pretty useful. I'm 34 so right in between your 2 examples. If I wait until I am 45 to find out do you think I will have to pay roughly the same amount (in real terms)?

Sorry got no idea and to be honest even those who work in the pension industry who are truthful can't predict what the UK government is going to do in the future.

You can find out how much you have to pay now to make up contributions from the pensions service.

However you also need to think that at age 45 you may have kids or other people who are expensive to cater for dependent on you, so you will have less spare income to save.

Then again you may move somewhere else where even if you did put into a UK state pension, you wouldn't get any index-linked rises so you would feel like you have been ripped off.

However also remember the UK like lots of developed countries and even China has a demographic timebomb.

[Cal]

Pension Contribs while abroad: HMRC info

http://www.hmrc.gov.uk/pdfs/nico/ni38.pdf
Tells you what you need to know about pension contributions, inter alia.

I am in Switzerland too; for £124.80 a year I keep my UK pension contribution up-to-date. That's Class 2 voluntary NICs.

Makes sense for me, personally.

[BlasterBates]

If you work in Switzerland it should count to your NIC contributions, no need to do anything.

[Sausage Surprise]

Hello - I have not worked in the UK since Dec 31st 2010. Due to a combination of a fantastic very long holiday and now working outside the UK I have not paid any National Insurance Stamps.

Was wondering if I should bother to actually catch up, obvious George Osbourne has commissioned a report into whether NI should be abolished and just rolled into income tax, so I do really want to pay if it will no longer exist. What are the options for catching up if it isn't abolished/how do other contractors handle this?

Thanks in advance.

Stamps...how quaint