Paying UK State Pensions Voluntary Contributions from Thailand

[H1w4yR1da]

As I've spent a large part of my adult working life in Thailand, I'm missing a number of years national insurance contributions towards my UK state pension.
I can pay voluntary contribution back dated for a number of years to make up the amount I'll get when I eventually retire.

It appears Thai banks make transferring money to the UK Gov account rather tricky. For Bangkok Bank, one can't register the UK Gov Pensions account for internet banking under International Payee. It can only be an account in your own name.  

Kasikorn internet banking allow this but there is no option to add a reference number which is needed by the receiver. It looks like a trip to a branch is necessary but I'd prefer a more convenient way in this digital age.

Has anyone been able to do this online or even at a branch? Going to a branch of Bangkok Bank is my next option and paperwork includes passport, work permit and letter from payee.

Will welcome all and any advice.
Cheers

[Antonymous]

Yes, I've done it successfully at a bank branch, but it was a hassle. The 'letter from payee' that you mention in the list of requirements was a sticking point that wasted a couple of months, since I had no such letter and had to request one specially from the UK Gov. What the bank wants is an 'invoice' and of course the UK Gov doesn't send out such a thing in these circumstances as it is a voluntary contribution and up to you how many backdated years you pay.

 

Their letter simply listed the amounts in each year that I was allowed to make voluntary contributions, but didn't show the calculation of the total amount (as I had requested for bank purposes). After some explaining the bank did finally accept this however and made the transfer.

 

Tip: be sure to obtain a reference number from UK Gov before transferring the money and write this very clearly on the transfer request doc that you'll fill in at your bank branch.

[TTSIssues]

Or send to a UK bank account and transfer it from there?

 

not answering the OP but related question, I am in the same boat re needing to top up UK pension. Is it worth it? Or is it just a waste of money? Many thanks.

[Antonymous]

46 minutes ago, TTSIssues said:

Or send to a UK bank account and transfer it from there?

 

not answering the OP but related question, I am in the same boat re needing to top up UK pension. Is it worth it? Or is it just a waste of money? Many thanks.

 

Maybe the OP (like me) no longer has a bank account in the UK.

 

Regarding whether it is worth doing, you must calculate the amount of the 'investment' against the likely additional 'return'. This is simple enough to do. The key factor in that calculation is how many years you expect to live to enjoy the benefits. If you are healthy and expect a long life the return can be substantial and well worth it.

 

Another factor is the 'opportunity cost' of the amount of contribution that you decide to pay. Can you afford to part with the money now (you won't be able to get it back if you decide you need it later)? Could you invest the same amount in something that gives an even higher return?

 

In my case I paid several hundred thousand baht in voluntary contributions in order to obtain the maximum allowance once I start to take a pension. It is a risk like any other investment, but the potential ROI is way better than any bank deposit or funds.

[sanuk711]

1 hour ago, TTSIssues said:

not answering the OP but related question, I am in the same boat re needing to top up UK pension. Is it worth it? Or is it just a waste of money? Many thanks.

I think if you already have 35 years contributions-----any more payments may be a waste .

[Jumbo1968]

It can cost nearly £800 a year to top up, you have to work out if it’s worth it.

https://www.moneywise.co.uk/news/2019-01-15‌‌/top-your-state-pension-now-avoid-contribution-cost-hike-april

[worrab]

17 minutes ago, sanuk711 said:

I think if you already have 35 years contributions-----any more payments may be a waste .

The new pension scheme is a joke!! I have 41 years of full payments and by their calculations I am still unable to get the full pension. I start claiming next year when I am 66. Have double checked this on the Gov.UK website. I think a phone call will be order to see what is going on.  

[twix38]

Tip. For most if not all any payments made for years before 2016 will not give an extra pension income. You should only make payments for years 2016/17 and onwards.

[topt]

1 hour ago, worrab said:

The new pension scheme is a joke!! I have 41 years of full payments and by their calculations I am still unable to get the full pension. I start claiming next year when I am 66. Have double checked this on the Gov.UK website. I think a phone call will be order to see what is going on.  

This is probably because you were contracted out at some point so the contributions went into another scheme for which you would be receiving a benefit - some sort of company or private pension scheme depending on your specific circumstances.

 

There have been a number of threads about this in the last couple of years on here and in the home forum and Money Mail Online has quite a few articles if you search there.

[topt]

2 hours ago, sanuk711 said:

I think if you already have 35 years contributions-----any more payments may be a waste .

 

2 hours ago, worrab said:

The new pension scheme is a joke!! I have 41 years of full payments and by their calculations I am still unable to get the full pension. I start claiming next year when I am 66. Have double checked this on the Gov.UK website. I think a phone call will be order to see what is going on.  

one article here -

https://www.dailymail.co.uk/money/pensions/article-7240605/Why-dont-state-pension-paid-39-years-NI.html

[Ajarnbrian]

Each additional year of vol NI contributions effectively pays for itself in about 4 years. Check out the excellent `Topping up your state pension` guide from the Royal London company, written by former UK pensions minister, Steve Webb.

www.royallondon.com 

 

[Pdavies99]

8 hours ago, TTSIssues said:

Or send to a UK bank account and transfer it from there?

 

not answering the OP but related question, I am in the same boat re needing to top up UK pension. Is it worth it? Or is it just a waste of money? Many thanks.

Personally I think a complete waste of time....No indexation unless you live in the UK, and now not available "currently" until age 67.  

 

(Maybe the UK also might adopt the same rules about non residents as Australia, then you would get nothing!!)

 

Also for myself taking into account how much I would need to pay it would take until I am age 82 before I get a return more than what I need to give them!

 

A nice idea, but financially a nonsense, but good luck if you think worthwhile.

Edited February 15, 2020 by Pdavies99

[Mike Teavee]

7 hours ago, Jumbo1968 said:

It can cost nearly £800 a year to top up, you have to work out if it’s worth it.

https://www.moneywise.co.uk/news/2019-01-15‌‌/top-your-state-pension-now-avoid-contribution-cost-hike-april

If you're working Overseas you can top up at Class 2 rates which is £159 this year... 

 

NB, there is some debate about whether it's worth backpaying before April 2015 as they re-baselined everybody's entitlement at that date and back payments for years before then may not make a difference (Mine don't seem to have so I'll be taking it up with them on my next trip to UK) 

 

 

[Mike Teavee]

46 minutes ago, Pdavies99 said:

Personally I think a complete waste of time....No indexation unless you live in the UK, and now not available "currently" until age 67.  

 

(Maybe the UK also might adopt the same rules about non residents as Australia, then you would get nothing!!)

 

Also for myself taking into account how much I would need to pay it would take until I am age 82 before I get a return more than what I need to give them!

 

A nice idea, but financially a nonsense, but good luck if you think worthwhile.

Each year's contribution is (currently) worth 1/35th of £167 per week (Approx £4.78 pw, £248.11 pa) so at Class 2 rates of £159 pa it would take 7-8 months before you got payback & that's without the increases that will happen between now & when you claim it 

 

Class 3 rates are about £15 per week (£780 pa), so it would take a little over 3 years to get payback (again, doesn't take into consideration future pension uplifts which you do get even if you live in Thailand until you start taking the pension, i.e. It's not frozen as at when you moved to Thailand, but is frozen at the date you start to claim it).

 

Feels like a no brainer to me (especially as I'm paying at Class 2 rates)... 

 

Edit: And Australian's still get their pension if they live overseas, it's the additional Pension Credits that they lose (just like UK guys lose their Winter Allowance). 

 

Edited February 15, 2020 by Mike Teavee

[worrab]

5 hours ago, topt said:

This is probably because you were contracted out at some point so the contributions went into another scheme for which you would be receiving a benefit - some sort of company or private pension scheme depending on your specific circumstances.

 

There have been a number of threads about this in the last couple of years on here and in the home forum and Money Mail Online has quite a few articles if you search there.

Nope, never contracted out. Having done the check for my personal circumstances, it quite clearly shows the 41 years of full payments. I will have a look at a couple of other articles and still call them to clarify.  

[topt]

10 minutes ago, worrab said:

Nope, never contracted out. Having done the check for my personal circumstances, it quite clearly shows the 41 years of full payments. I will have a look at a couple of other articles and still call them to clarify.  

And mine clearly shows 33 number of "full" years but I still needed 8 years (not 2) of top ups due to contracting out.

 

Contracting out does not affect the overall number of years as it was for an additional pension. I have no idea if you were or not but that seems to be the only plausible explanation for your specific circumstances.

Have a read here -  https://www.which.co.uk/money/pensions-and-retirement/state-pension/what-was-contracting-out-a581c3l1kqf4

 

On the Government Gateway portal it shows me what my full years are, gaps and expected entitlement and my COPE figure - Contracted out Pension Entitlement. 

 

if you are due to start claiming next year I am surprised you have not had a conversation already with the Pension Advisory service about it - or perhaps you are comfortable enough without the extra 

[MartinL]

10 hours ago, TTSIssues said:

Or send to a UK bank account and transfer it from there?

 

not answering the OP but related question, I am in the same boat re needing to top up UK pension. Is it worth it? Or is it just a waste of money? Many thanks.

I paid 3 years' worth of Class 3 VCs (16/17, 17/18, 18/19) shortly before claiming my UK State Pension last year. I paid £2236 in total which gained a pension increase of £14.45 per week. At that rate, what you paid in VCs is regained in additional pension payments in 154 weeks (3 years) if you don't take UK tax into account, 193 weeks (3.7 years) after deduction of 20% tax. So a good investment unless you're on your last legs.

 

As others have said here, only the last 3 years of VCs can be paid and gain a pension increase.

 

You can, of course, pay short years earlier than 3 years ago if you're feeling generous - the tax people will love you! - but there'll be no gain for you.

 

Before paying VCs, I had 39 years contributions but, because many of those were 'contracted out', pension payment was reduced. On the plus side, those 'contracted out' years went into company and private pensions which more than made-up for the state pension shortfall.

Edited February 15, 2020 by MartinL

[Jare]

I just don't see the point in it really. People in the UK strain themselves so hard for so little, and in the end, being a pensioner is not a great experience. I'd rather spend it whilst I'm still young-ish, and leave enough for a pistol when the money runs out. All that paperwork and call-centre stuff seems hardly worth it.

[Mike Teavee]

21 minutes ago, Jare said:

I just don't see the point in it really. People in the UK strain themselves so hard for so little, and in the end, being a pensioner is not a great experience. I'd rather spend it whilst I'm still young-ish, and leave enough for a pistol when the money runs out. All that paperwork and call-centre stuff seems hardly worth it.

lol... Let's see if you're still saying the same when you hit 66 (or 45 for that matter) & realise the abyss that you're staring into. 

 

 

Edited February 15, 2020 by Mike Teavee

[Pdavies99]

Ref catching up missing years for a UK State Pension:

The figure calculated to catch up missing years is far higher that voluntary contributions and the figure depends on your current age, the figures are calculated by the DSS.  Contracting out has no effect under the latest pension calculations for a UK State pension, it is purely 35 years NI contributions for a UK State pension in full.

 

See:   https://www.gov.uk/voluntary-national-insurance-contributions/deadlines

 

See: https://www.gov.uk/new-state-pension/how-its-calculated

 

 

 

Ref Australian State Age Claim Pension and currently living overseas at time of a proposed claim

You must be an Australian resident to make a claim for the State Age Pension.

If you are currently living overseas you have to return to Australia to claim the State Age Claim Pension.

The process can take several months and you may not be granted an Age Pension depending on your income and assetts.

Your claim for an Age Pension will also be subject to an asset test and should you exceed the asset disqualification limit, you will not receive an State Age Claim Pension.

 

There are certain exemptions from the asset test, such as your main residence if owned.

The current asset disqualification limits for a single, full State Age Pension applicant are $258,500 for a homeowner and $465,500 for a non-homeowner.

 

Should you be granted an State Age Claim Pension, you have to remain in Australia for two years, otherwise your Pension will be cancelled.

 

When you move overseas after the two years, your Age Pension will be paid at the ‘outside of Australia’ rate and will be subject to the work-life residency rule.

 

This means that if you have lived in Australia for less than 35 years between the ages of 16 and 65, you will be paid a pro rata rate.

Edited February 15, 2020 by Pdavies99

[Andycoops]

22 hours ago, TTSIssues said:

Or send to a UK bank account and transfer it from there?

 

not answering the OP but related question, I am in the same boat re needing to top up UK pension. Is it worth it? Or is it just a waste of money? Many thanks.

I missed one year of NI contributions when I spent the year doing a bucket list and my forecast leaves me 15 Pounds a week short of the max.

When I enquired about making up the gap it simply wasn't worth the expense, in my circumstances, as missing 15 Pounds a week isn't a problem.

[BritManToo]

12 hours ago, Mike Teavee said:

lol... Let's see if you're still saying the same when you hit 66 (or 45 for that matter) & realise the abyss that you're staring into. 

65 here, and I already feel I've lived 15 years too long.

I would have had a much more satisfactory life if I'd died age 50.

[Mike Teavee]

1 hour ago, BritManToo said:

65 here, and I already feel I've lived 15 years too long.

I would have had a much more satisfactory life if I'd died age 50.

Serious???

 

You're not still enjoying being ravaged on a (semi) nightly basis by some hot Thai chick?

 

Or enjoying chatting to your kids about how their life is going?

 

If you are serious, I have a balcony you can use, just wipe your feet on the way in (don't worry about it on the way out) ... 

 

[Mike Teavee]

7 hours ago, Pdavies99 said:

Ref catching up missing years for a UK State Pension:

The figure calculated to catch up missing years is far higher that voluntary contributions and the figure depends on your current age, the figures are calculated by the DSS.  Contracting out has no effect under the latest pension calculations for a UK State pension, it is purely 35 years NI contributions for a UK State pension in full.

 

See:   https://www.gov.uk/voluntary-national-insurance-contributions/deadlines

 

See: https://www.gov.uk/new-state-pension/how-its-calculated

 

 

 

Ref Australian State Age Claim Pension and currently living overseas at time of a proposed claim

You must be an Australian resident to make a claim for the State Age Pension.

If you are currently living overseas you have to return to Australia to claim the State Age Claim Pension.

The process can take several months and you may not be granted an Age Pension depending on your income and assetts.

Your claim for an Age Pension will also be subject to an asset test and should you exceed the asset disqualification limit, you will not receive an State Age Claim Pension.

 

There are certain exemptions from the asset test, such as your main residence if owned.

The current asset disqualification limits for a single, full State Age Pension applicant are $258,500 for a homeowner and $465,500 for a non-homeowner.

 

Should you be granted an State Age Claim Pension, you have to remain in Australia for two years, otherwise your Pension will be cancelled.

 

When you move overseas after the two years, your Age Pension will be paid at the ‘outside of Australia’ rate and will be subject to the work-life residency rule.

 

This means that if you have lived in Australia for less than 35 years between the ages of 16 and 65, you will be paid a pro rata rate.

The only thing that matters when calculating UK Pension entitlement is years NI paid (Trust me, due to a calculation error I was 50p short one year & it didn't count until I rectified it).

 

Again, Aussies have access to their pension if they meet the criteria (one of which is being resident in Australia when they claim it in no way does this mean that they can't have a pension if they live overseas).

 

Oh & your statement about Pensions being frozen if you live outside of the UK is wrong... I won't bother listing all of the counties where reciprocal social security benefits apply, I'll just throw in the Philippines as one example of where your UK pension will still get the yearly uplifts... 

 

 

Edited February 16, 2020 by Mike Teavee

[BritManToo]

19 minutes ago, Mike Teavee said:

Serious???

You're not still enjoying being ravaged on a (semi) nightly basis by some hot Thai chick?

Or enjoying chatting to your kids about how their life is going?

If you are serious, I have a balcony you can use, just wipe your feet on the way in (don't worry about it on the way out) ... 

There's a difference between momentary pleasure and overall worth of one's life.

 

Back on topic, voluntary contribution only really make a difference for years after the new pension scheme started. Generally it's now pointless to buy years prior to 2016, buying years after @700 pounds gets you 4.25 GBP/week per year. I might buy some more years just before my state pension starts, depends on how many years it looks like I have left.

Edited February 16, 2020 by BritManToo

[Mike Teavee]

2 minutes ago, BritManToo said:

There's a difference between momentary pleasure and overall worth of one's life.

True, but both are what makes life worth living 

 

IIRC you have 4 kids, that must give you more pleasure than most people will ever have, so why wouldn't you want to savour every moment, if you did "End" 15 years ago, how much would you have missed & how much do you have to look forward to??? 

 

Think we've gone OT enough, maybe a new topic is required ???? ... after you BM2...

 

[Mike Teavee]

8 minutes ago, BritManToo said:

There's a difference between momentary pleasure and overall worth of one's life.

 

Back on topic, voluntary contribution only really make a difference for years after the new pension scheme started. Generally it's now pointless to buy years prior to 2016, buying years after @700 pounds gets you 4.25 GBP/week per year. I might buy some more years just before my state pension starts, depends on how many years it looks like I have left.

As I learnt after the fact, I paid £955+ to catch up on 7 years (they gave me the extra year as I applied in February but didn't get to pay until May) & 6 of those apparently didn't count a bean... 

 

Next time I'm in the UK I'll be getting the monies back, but at £159 pa (Class 2) it's a no brainer to continue to pay until I have the full 35 years (I'm targeting 36 just to be on the safe side) 

 

[Andrew Dwyer]

14 hours ago, MartinL said:

I paid 3 years' worth of Class 3 VCs (16/17, 17/18, 18/19) shortly before claiming my UK State Pension last year. I paid £2236 in total which gained a pension increase of £14.45 per week. At that rate, what you paid in VCs is regained in additional pension payments in 154 weeks (3 years) if you don't take UK tax into account, 193 weeks (3.7 years) after deduction of 20% tax. So a good investment unless you're on your last legs.

 

As others have said here, only the last 3 years of VCs can be paid and gain a pension increase.

 

You can, of course, pay short years earlier than 3 years ago if you're feeling generous - the tax people will love you! - but there'll be no gain for you.

 

Before paying VCs, I had 39 years contributions but, because many of those were 'contracted out', pension payment was reduced. On the plus side, those 'contracted out' years went into company and private pensions which more than made-up for the state pension shortfall.

Similar situation for me , retired April 2016 after paying 40 full years of NI.

Still 6 years ( and £26 pw ) short of full State Pension at age 67 ( now 58 ).

Took the option to pay the shortfall.

 

Now the trick is to stay alive past 71 !!

[QPRFC]

On 2/16/2020 at 8:39 AM, BritManToo said:

I might buy some more years just before my state pension starts, depends on how many years it looks like I have left.

The current rules for voluntary top-ups only exist until April 2023 btw

Yes, I'm sure another scheme for top-ups will be available in the future?!?

 

People are talking about the higher levels but worth a mention in this thread that the minimum years of contributions to be eligible for a UK state pension is 10 years of NICs.

[steve187]

On 2/15/2020 at 10:01 AM, worrab said:

The new pension scheme is a joke!! I have 41 years of full payments and by their calculations I am still unable to get the full pension. I start claiming next year when I am 66. Have double checked this on the Gov.UK website. I think a phone call will be order to see what is going on.  

you were contracted out at some time, paying into a private pension, should all be in a pension forecast