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I lived and worked in the UK for several years, but now live and work elsewhere in the EEA, where I will remain indefinitely. (I have no plans to return to the UK to work or retire, but anything's possible.) While living in the UK, I made National Insurance contributions. According to my State Pension forecast and National Insurance record, I am not eligible for a UK State Pension because I have only 9 years' full NI contributions, whereas 10 are required. However, those statements go on to say that (1) I can make up the shortfall by paying £689 in NI contributions for one of the "incomplete" years, or that (2) I can use time spent abroad in the EEA to make up the gap.

Given that all the years my NI statement lists as "incomplete" are ones that I had spent working in Germany and paying into its state pension scheme, is there any benefit to me to paying the £689 to make up my NI shortfall?

  • Is there any online reference about being able to use time spent abroad in the EEA to make up the gap? I spent a bit of time searching without finding anything. – Ganesh Sittampalam Jun 11 '17 at 21:41
  • Yes, it's in the State Pension forecast I linked to. You'll need to log in with your Government Gateway account (or to apply for such an account, if you don't already have one). – Psychonaut Jun 12 '17 at 5:19
  • I don't have any recent gaps I could pay for, so I don't get any statements about that. Having dug a bit more, are you sure that the conditions aren't (1) and (2), i.e. you can make up the shortfall by paying as long as you were also in the EEA at the time? – Ganesh Sittampalam Jun 12 '17 at 5:43
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Off-hand, I'd consider that the UK may leave both the EU and EEA and it's difficult to know how the time-pressured negotiations before that might go regarding the transferability of qualifying periods for state pensions between countries.

And as you can receive your UK state pension while living abroad and not get your National Insurance back, it might just be worth paying the last £689 so that you are sure you will get some pension for your 9-10 years of NI contributions, regardless of any fallout between the UK government and the EU.

  • might just be worth paying ... Unless they increase the minimum number of years of NI contributions needed before you reach retirement age (they've already done this once). I'm in a similar situation and trying to decide whether it's worth making 4 partial contributions (totaling 1,464) to get to 10 years worth - I still have 30+ working years in which they might move the goalposts again. Also note - if you only make the minimum 10 years of contributions then they only pay out 10/35ths of the basic state pension. – CactusCake Jun 12 '17 at 14:21
  • Ah. I knew it was pro rata, from that point of view it was more about getting something for the NI contributions at all. I didn't realise the last round of changes were retrospective though! – nsandersen Jun 12 '17 at 15:21
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There is a good summary of the New State Pension here: https://pensionslatest.blog.gov.uk/2015/10/13/pensions-revolutions/

Another thing worth checking is whether you are eligible to pay Class 2 NICs, as these are only a third of the cost of Class 3 NICs. It is definitely worth paying the Class 2s if you can, as they will be abolished in April 2019. You can usually make voluntary payments for up to the last 6 years.

You qualify for Class 2 NICs if you were employed in the UK up to the point where you left, and continued to work after leaving the UK.

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