National Insurance for expats
Going abroad, even for less than a tax year, can create gaps in your National Insurance contributions record.
What most expats don't realise is that they can avoid these gaps from occurring by electing to pay voluntary NIC whilst they are abroad. The cost is usually around £2.75 per week for most people so it is lower thank you think (2014/2015 tax year).
Benefits of paying UK National Insurance while abroad
If you move abroad continuing to pay NIC may help keep your entitlement to:
- certain state benefits in the European Economic Area (EEA) and some reciprocal agreement countries
- certain state benefits and allowances if and when you return to the UK
- a full State Pension
Individuals currently need 30 years NIC to get a full State Pension.
Paying voluntary contributions means you can avoid gaps occurring which is particularly useful if you live abroad and National Insurance contributions are not deducted automatically.
Who is eligible?
If you want to pay voluntary National Insurance contributions while abroad, either of the following conditions must apply:
- you must have lived in the UK for a continuous three-year period at any time before making your payments
- before going abroad, you paid NIC for a minimum of 3 years
If you qualify, you can make up any gap in your NIC record for the previous six tax years.
Different classes of Voluntary National Insurance Contributions
Here is some information to help you decide if you should pay National Insurance Contributions while you are abroad:
Most people will normally pay class 2 National Insurance contributions when they work abroad.
If you are unsure as to what contributions you should pay then you can speak to the HMRC international caseworker in Newcastle on +44 191 203 7010 (open Monday to Friday and closed weekends and bank holidays).
UK pension reform
HMRC advise that before deciding to pay voluntary contributions individuals should consider the Government's proposals for simplifying the future State Pension. One of the aims of these reforms is to introduce a single-tier pension from 5 April 2016. The single-tier pension will require 35 qualifying years of NIC or credits for the full amount. There will also be a minimum qualifying period of between 7 and 10 qualifying years.
Those with less than 35 qualifying years but more than the minimum qualifying period will receive a proportionally smaller state pension.
The UK Government plan putting in place transitional arrangements to recognise people's NIC records before the implementation date.
Do you want to register for Voluntary NIC's? Click here to fill out the NI form on our website and start ensuring you will still benefit from all of the state benefits that you might have missed out on!