Pension Harder
I wrote about how UK expats can pay into the state pension scheme while abroad here.
I applied to pay class 2 contributions (the cheaper ones) and now, three months later, I have received an answer from the Pension Service.
It’s not a very helpful answer, but it does clear a couple of things up.
I came straight to Japan after university, so I have never paid into the UK pension scheme. This means I cannot pay class 2 contributions (the cheaper ones).
People who have paid into the scheme can pay class 2 contributions, and can also pay them in arrears.
If you are eligible and it makes sense for you to do so, I suggest you do this as soon as possible, as class 2 contributions may be phased out soon.
As for me, I will get in touch with my case worker and ‘let her know’ that I would like to pay class 3 contributions. She neglected to give me her email address, so I guess it will be another letter and six weeks before I hear back from her. I’ll keep you posted.
Anyone else paying into the UK pension scheme from Japan? Is it a good idea?
Damn! Commiserations on not being able to pay at the class 2 rate. That sucks.
I know what you mean about “not very helpful.” After I was told I could make back-payments and sent a list of the amounts to pay for each year, I called them to actually make the payments (because they didn’t send me that information of course—why would they…). I was sent on a three hour wild goose chase of lengthy recorded messages, being transferred (often back to people I had already spoken to who had transferred me elsewhere), being cut off, being given phone numbers that don’t work or that nobody answers, etc. etc. It was an absolute nightmare. No departments seem to work in cooperation with the others or know what is going on.
In the end the was told that I had to “check that I would benefit from making the back-payments,” which entailed ordering a pension statement from them—not because I personally need one—I can see that information on my account on line—but because *they* can’t see the information unless I order a statement and they have a copy of it on their record! So that’s another several-week wait and then I have to go through the phone nightmare again.
That’s almost enough to put me off entirely! Good luck and let us know how you get on…
Hi MyTime. A bit of detective work on the gov.uk website reveals the answers.
Class 2
https://www.gov.uk/pay-class-2-national-insurance/bank-details
Class 3
https://www.gov.uk/pay-voluntary-class-3-national-insurance/bank-details
They also told me by letter to put your NI number as the reference. I’m assuming so somebody has to look you up and see’s your case is an international one and handles it appropriately.
I was given an account number and a reference number to make the payments, but then I was told not to make any payments until they had “confirmed that I would benefit from them” via the pension statement that I had to order.
The very first time I called them–months ago now–I made a comment on the phone to the effect of “it’s all pretty confusing, eh?” The staff member replied “Yes, I know, I know. Nobody here knows what is going either since they made all those changes to the system.”
Ah… good old Blighty.
Thanks adamu! I’m going to just send in the direct debit form for class 3s and ignore ‘my’ case worker. I’ll report back when I hear from them, probably in a few months’ time…
Yes, it’s definitely a good idea. I pay class 3 contributions and could back date years I missed that were cheaper. I wouldn’t call them, and would expect a postal reply 3 months later.
I pay class 2. The statement took 6 months to arrive. Took about the same to sort out the paperwork, then another while to get the direct debit payments regular. 2 people thought one of my payments hadn’t arrived, someone else realised it had. So, it’s worth it, but some perseverance may be required 🙂
Hi all,
I emailed the pensions center way back in November and still haven’t had a reply.I plan to call them sometime but I keep putting it off as I know what a long,painful experience it will be.
I’ve been paying Class 2 for about 12 years (and had 8 years back payments to make at that time, from the time I left work in the UK). Part of the ‘deal’ was my (Japanese) wife’s ability to claim a category B pension (60% the amount of mine) – despite the fact she’s never worked in the UK – but since last year this no longer exists, and hasn’t been replaced by anything else as far as I can make out. Pensions are only paid based on your own contributions. Bummer. On the other hand, the gov.uk website lists the old state pension maximum as £119.30 and the new state pension maximum as £155.65.
The other thing to bear in mind is that Japan is *not* one of the countries where the pension is increased each year. The amount you receive when you first claim is what you’ll get till you die. Let’s hope there’s no inflation in Japan in our golden years.
How does this rank as a wise investment of money compared to the other options listed on the website? I had a job before I came to Japan (working at Iceland) so I think I could probably get class 2 but it sounds like there’s lots of trouble. Should I focus in this order:
1. Ideco
2. NISA
3. Invest
4. UK pension
Or is the UK pension system good enough to justify prioritizing it higher if I have the money to put into it?
Hi Phil
If you click on the link to the first post on this, I wrote about why this might be a good option.
If you can pay Class 2s, it seems like a remarkably good deal.
A U.K. state pension would also provide diversification and a form of ‘longevity insurance’. As it is guaranteed by a government, it has a different profile to stocks.
The current U.K. pension is more generous that kokumin nenkin, and seems to be in better shape.
So I think it’s worth considering, especially at 300 yen a week, or whatever it comes to 🙂
Thanks. I’ll read it and maybe request a pension statement.
I have made class 2 payments since 1989 and had a number of qualifying years in the UK previously. Recently informed that no further payments are necessary. Current estimate is 593 pounds a month. The sysytem and staff at Newcastle are not to be trusted. It is necessary to keep all documentation, direct debits and so on.
Related issues: If you have a pension from a Japanese source, you will need to tell them about the UK pension. That would also go for the Japanese tax form. Exchange rates are also a consideration.
Hi,
Are Ideco 401ks limited to Japanese investment vehicles only?
Or can we invest in things like Vanguard funds through them?
Hi John
iDeCo accounts currently only have access to cash, insurance, or mutual fund products. You can see each provider’s line-up here (click on the provider to see): http://www.dcnenkin.jp/search/commission.php
Here’s my update.
My backpayment statement was for a combination of Class 3 (to cover the months I was doing a working holiday) and Class 2 (to cover the time I was working) since moving to Japan. I transferred all the money in one payment to the account details listed on the Class 2 payment page (https://www.gov.uk/pay-class-2-national-insurance/bank-details) and sent them a letter containing all the information on 6 Feb 2017. I used my national insurance number as the bank transfer reference – as instructed in their letter – contrary to the instructions on that Class 2 page.
I’ve so far not had any acknowledgement or reply, but checking my statement online now shows the relevant years as covered. The Class 2 payments show up as “Self employment (number of weeks)” and the Class 3 as “Voluntary (number of weeks)”.
I asked to pay ongoing payments annually, so I’m *assuming* there’ll send me a letter annually from now on. If I get a confirmation of the payments by post, I’ll update here.
That’s great! Congratulations 🙂
I’ve heard nothing back from mine… perhaps I should log in and see if my status has changed.
I never did get a confirmation. But I did get a letter today (dated 10 April) stating the amount due for 2016-17. So it looks like the annual statements are working!