UK State pension - Am I class 2 or Class 3

[Kev1964]

One counter argument against paying historical years is that (touch wood) a contributor may not reach retirement age and therefore derive zero benefit from their payments. The New State Pension, which you would be entitled to (according to current rules), has no surviving spouse benefit. Your estate is theoretically reduced by the amount of the lump sum payments.

Think positively though and on balance I agree with the views of DannyBoyD and jrbeire.

 

[giddyup]

As far as I can gather the system defaults to Class 3; if you believe it should be Class 2 make that case when you complete CF83.

On the online form was there somewhere to make that case? I just filled in all the details and submitted but I did not see anything about class/2/3. Wondering if I should follow up with a letter and some documentation.

 

[DannyBoyD]

if I should follow up with a letter and some documentation

Wait & see what comes back first.

 

[Allpartied]

One counter argument against paying historical years is that (touch wood) a contributor may not reach retirement age and therefore derive zero benefit from their payments. The New State Pension, which you would be entitled to (according to current rules), has no surviving spouse benefit. Your estate is theoretically reduced by the amount of the lump sum payments.

Think positively though and on balance I agree with the views of DannyBoyD and jrbeire.

There is still a benefit, in some cases, to buying back the years and continuing to buy them back until reaching retirment age, even if you die before the UK retirement age.
I have an AVC, with 200k and was anticipating that this sum would have to bolster my pension payments over a 20/25 year period.
But if I know that I am guaranteed an inflation proof payment, from age 67. for the rest of my life, I can use this sum over a shorter period. I can retire earlier and spend the 200k during my 60's, knowing that if I do live beyond 67 the pension will kick in. And if I don't make it, then, at least, I have had a few extra years of well funded retirement

 

[Storyman]

Hi, I am looking for some advice on this topic. I applied to buy voluntary NI contributions for previous years. My situation is that I moved to the UK in Sept. 2006 to attend university for one year. I then spent a further two years working there from May 2007 till Sept 2009. As far as I remember I didn't apply for a NI number till about Dec/Jan of 2006/07. I came back to Ireland in Sept 2009 and immediately start working here and I have been continually employed in Ireland since. On my pension forecast I have 6 years of NI credited to me but on my NI record there are 3 full years paid 07/08, 08/09 & 09/10. I sent in the CF83 form last November and a cover letter explaining my situation. This morning I received two letters from HMRC. One was telling me that I can pay Class 2 for the year 23/24 at £179.40. The second letter said that they are unable to accept my application to pay the class 2 rate for the previous years and have invited me to apply for class 3. I have attached letters below. Any advice would be much appreciated. I am 41 years old so I can pay going forward and would still be able to acquire 34 years of NI contributions by the time I am 68.

 

[Lamps]

Im in a similar position to Soap15. I have 27 years till retirement age. I have 4 years contributions. I'll back date and pay 6 years worth to give me 10 years and an entitlement to the pension. Then I'll pay it yearly until I have the full contributions paid. I have the option to go back 16 years but I'm not going to as it's a risk, the entitlement to the pension can be taken away by a future government so I'll play it by ear each year. That's all depending on me being eligible to pay the class 2 rather than the class 3

 

[LonerMhi]

How much does it cost to make a voluntary contribution?
Most common is either Class 2 or Class 3 contributions: Class 2 will be cheaper, but even if you are assessed as Class 3 it's still worth doing.

Class 2 Annually: £163.80 (GBP) - £3.15 per week
Class 3 Annually: £824.20 (GBP) - £15.85 per week

Which will I pay: Class 2 or Class 3?

Living and working abroad	Class 2 - but only if you worked in the UK immediately before leaving, and you’ve previously lived in the UK for at least 3 years in a row or paid at least 3 years of contributions
Living abroad but not working	Class 3 - but only if at some point you’ve lived in the UK for at least 3 years in a row or paid at least 3 years of contributions

Hello to all following this thread. I sat and read it all yesterday as I have mulled over 'tackling' figuring this all out for myself and I am so grateful and thrilled at the goldmine of information, scenarios and experiences shared. Solely after one hour's reading this, I sorted the following in about ten minutes: 1. registered to get my account with UK Gov, 2. completed all the ID questions and submitted the passport info/pic online etc per their app and all per the guidance on here (thank you!) 3. submitted by NI number and then immediately could see all the years I would need to pay up to date to be eligible for the pension.
Key feedback about the CF83 - I was automatically showing as due to pay the Class 3 levels. I could not find the CF83 (also called NI38) online so I rang the helpline , held for 9 minutes and got through! Guy told me how to find the form, he recommended that I submit online rather than by paper/post and that currently it's about one month turnaround if submitted online. That is a big improvement to what I've read on here about turnaround so I wanted to share that. I completed it online and it does as for specific dates leaving UK and date(s) starting new role 'abroad' ie back in Ireland in my case - but I had kept pay cheques from 1995-2000 when working in London (some, not all!) so could trace when I finished UK job and started Ireland job. There is an open field at the very end of the CF83 online that lets you input any comments so I added a few points to hopefully assist with my efforts to get re-classified as Class 2. I'll update this group when I hear back from them so that we know truly what turn around is like AND if I was successful!
Again my sincere thanks, this has been invaluable, I most definitely agree it will be worth back-paying and then paying the amount annually until retirement, many of us would be paying large amounts into any company pension to get that kind of pension sorted (I'm 50 now) so this is so worth it. Not sure I'd afford to back-pay the Class 3 amounts to 2006. Thanks!

 

[Dub229]

Amazing thread. Thanks to all who take time to contribute. I have 10 full years paid and want to pay for more. Ive been assigned class 3.
From the rules in the key post and posts in this thread I assumed I could not get moved to class 2 as I have lived in the UK for 2 x separate 1 year periods only. However Ive been reading the guidance for Class 2 NI on the NI38 page updated in March 2024:

Damn Im not allowed to post a link. Title of the page on gov . uk is: "Guidance on Social Security abroad: NI38"

You can pay Class 2 National Insurance contributions if you’re employed or self-employed abroad if:

1. Immediately before going abroad, you were ordinarily an employed or self-employed earner in the UK.
2. You also satisfy either of the following conditions:

(a) You’ve lived in the UK for a continuous 3-year period at any time before the period for which National Insurance contributions are to be paid

(b) Before going abroad, you paid any of the following National Insurance:

• from April 1975 to give 3 qualifying years

I satisfy number 1. And for 2 (b) Ive paid 8 years contributions to a high amount.

So maybe Im in with a shout of class 2 or am I reading it all wrong?

1 more question. Im submitting the online CF83 form. They are asking do I intend to return to the UK in future? Options are: Yes / No / I dont know

Should I just say I am intending to return? I mean I might if theres a good job going. Im not sure...

 

[DannyBoyD]

maybe Im in with a shout of class 2 or am I reading it all wrong?

Put in your submission, include back up documents; worst they can do is say no.

1 more question. Im submitting the online CF83 form. They are asking do I intend to return to the UK in future? Options are: Yes / No / I dont know

Choose the option that fits your situation.

 

[Gmiske]

Really struggling when it comes to class 2 versus class 3. All the years I can purchase (17 in total are class 3).
I have 3 full years 97-2000.
Small amounts contributed in subsequent ones.

2002 and most of 2003 I worked in Ireland.
Then back to uni and worked part time until 2004 then moved to ROI and worked since then.
Any idea the easiest of quickest route to see if I can get these years converted to class 2 as opposed to class 3. Tried phone and not got through. The email form is a mess I am not sure I am completing it accurately. Would it be best to fill out and put cover letter with employment details?
Thanks very much!

 

[DannyBoyD]

easiest of quickest route to see if I can get these years converted to class 2

Complete the CF83 form, add a cover letter and supporting documentation and post.

 

[tiegan]

Really struggling when it comes to class 2 versus class 3. All the years I can purchase (17 in total are class 3).
I have 3 full years 97-2000.
Small amounts contributed in subsequent ones. View attachment 8997
2002 and most of 2003 I worked in Ireland.
Then back to uni and worked part time until 2004 then moved to ROI and worked since then.
Any idea the easiest of quickest route to see if I can get these years converted to class 2 as opposed to class 3. Tried phone and not got through. The email form is a mess I am not sure I am completing it accurately. Would it be best to fill out and put cover letter with employment details?
Thanks very much!

Do exactly what @DannyBoyD says - I also sent in a print off of my Irish PRSI contributions which you can get online here in Ireland. It's worth the hour or so it will take you to put all relevant info and dates into the covering letter in neat, precise, easily read, chronological order.