RetireJapan

JimmyK wrote: ↑Sat Sep 21, 2024 10:44 pm My Japan pension prediction card has 4 columns and the amount I’ve contributed and should receive from 65 is stated in the far right column separately. So, I can see how much is from state pension contributions and how much is from employer’s pension. Total expected annual payment is showing at around JPY1.4mill pa, which based on responses to my earlier post seems to be what my entitlement would be assume I continue to make similar levels of contributions between now (55) and when I turn 60. Whilst I might still be employed during this period, there’s also a possibility that I won’t be. In which case, I think it would still be in my interest to make voluntary contributions to the state pension of around JPY16k pm until from whatever point I stop working until I hit 65. I might also try to defer collecting my pension until 70, to take advantage of that increase.

As for UK state pension, I’m a UK national and I’ve been making back payments for the past few years. I was originally rejected for either class 2, or 3, but after some push back and changes to the system, I managed to secure class 3. Not as good a deal as class 2, but still decent. I was rejected for class 2 on the basis of insufficient contributions (I only ever worked a handful of PT jobs before leaving the UK) and I suspect the timing of when I finished working in the UK and moved to Japan. That clause is quite ambiguous as there’s no clear definition of what leaving the UK ‘immediately’ after stopping work means. That’s been mentioned in other posts too. Had 3yrs worth of contributions, but these were almost exclusively through benefits (whilst at Uni, or signing on for unemployment benefit), which are somehow calculated differently. If I thought I could get class 2 I would certainly try again for that, but without knowing exactly why I was rejected for that (and what the precise requirements are for getting it) I can’t see it changing.

I have been paying class 3 for the last 20 years in Japan, and I have contacted HMRC whether I could change to class 2. I have given them an employment profile of my time in the UK and what I do here in Japan. I am not expecting a decision anytime soon, and whether it goes in my favour I am not exactly sure.....

There are minimum qualification requirements when you were in the UK, but it is my understanding that for overseas Voluntary Contributions,

If you are in Full-Time Employment then you qualify to pay Class 2 Contributions
and
If you are unemployed or self-employed / contracting, then you only qualify to pay Class 3 Contributions

https://www.gov.uk/voluntary-national-i ... tributions

https://www.gov.uk/voluntary-national-i ... tributions

"If you live or work abroad (or have previously)
To pay Class 2 or Class 3 voluntary contributions you must have EITHER:
previously lived in the UK for 3 years in a row
OR
paid contributions or had Class 2 contributions treated as having been paid for at least 3 years

To pay Class 2 voluntary contributions BOTH of the following must also apply:
you worked in the UK immediately before leaving
AND
you’re currently working abroad (or you worked while you were abroad)

Between November 2017 and April 2019, HMRC’s guidance was incorrect. It said all these conditions must be true. If you did not apply or your application was refused because of the incorrect guidance, you may be able to pay at the original rates. Explain your situation when you apply."


Note their error...
If you meet these criteria, you might want to contact them with a full employment history for your time just before leaving the UK and for your time outside the UK (with proof of employment), appeal their decision, and apply to pay Class 2 Contributions for periods of full employment.

Responses take over a year.

Also, Class 3 Contributions were cheaper than Class 2 Contributions before 2000-01.

https://www.gov.uk/government/statistic ... tributions

If you have contributions for 1998-99, 1999-2000, or before, then you can request that those years still be assessed at Class 3,
and (if in full-time employment) contributions for FY 2000-01 and onwards be reassessed for Class 2 Contributions.
Any periods of Unemployment or Self Employment will still be assessed at Class 3.
If your appeal is successful, you will be eligible for a refund for overpaid contributions.
If successful, you can either take the refund in cash, or apply it to other past Voluntary Contributions or future Voluntary Contributions to a total of 35 Years' Contributions to qualify for the Full UK Pension.

The part in bold from Don's post wasn't true 6 years ago in my experience. I was self employed in Japan and approved for Class 2. Not sure if the rules have changed.


There are minimum qualification requirements when you were in the UK, but it is my understanding that for overseas Voluntary Contributions,

If you are in Full-Time Employment then you qualify to pay Class 2 Contributions
and
If you are unemployed or self-employed / contracting, then you only qualify to pay Class 3 Contributions

The plot thickens. I was originally refused either class 2, or class 3, but was following a protracted follow up process I was eventually accepted for class 3. I imagine this was partly due to the error HMRC made in assessing eligibility back around 2018 I guess. In my case, I satisfy the criteria for class 2 - lived for at least 3 consecutive years in UK before moving to Japan and I’ve been in FT employment here. The one that I probably missed is the timing of when I left the UK, but that rule is rather ambiguous. What does ‘immediately’ actually mean when referring to the time elapsed between stopping work in UK and leaving the country? No guidance I can find now on this. My case could also be complicated by having left UK once (Jan 1993, having not worked in UK since August 1992), returning to UK in April 1995, then leaving again (for the final time) in Jan 1996, having not worked at all whilst being in UK from Apr ‘95 - Jan ‘96. Furthermore, when I was originally refused for class 2 and 3, I was told it was due to an insufficient number of qualifying years. I had 3yrs of contributions before leaving UK, but these were largely comprised of credits, mainly during time at Uni I think with some coming through unemployment benefit during summers between Uni attendance. No question I’ve paid very little NI through employment (a 4wk temp job in the summer of ‘92 being the longest I’ve ever worked in UK), but I can’t find any info that suggests credits are somehow worth less than employment contributions. I imagine that could be why I was eventually approved for class 3. So, as far as I can tell, the only rule I fail is the ‘Did you leave the UK immediately after stopping work?’ If we take my first departure, there were about 4-5mths were I did no work in UK between finishing a temp job in Aug ‘92 and moving to Japan in Jan ‘93 for 2 yrs, where I was permanently employed. My second departure (having returned to UK in Apr ‘95) was in Jan ‘96 and I did no work at all between Apr ‘95 - Jan ‘96. Hard to describe these periods as leaving UK ‘immediately’ after finishing work I guess, but again there’s no clarity provided on how long, or short immediate is.

HMRC of course are aware of the above and of my NI record, so I’ve just assumed class 3 is the best I can get. Bearing in mind I was refused either 2, or 3 initially, this still feels like a win! And even at GBP824 pa, it is still a win! However, given that HMRC do seem prone to errors, I have started to wonder about challenging their ruling on my case. What’s held me back so far is a) not knowing what point(s) to challenge it on and how to back that up with the right evidence, b) a concern that in trying to get approval for class 2, HMRC might revert to their original ruling and cut me off from class 3! There seem to be organizations out there who, for a fee, will challenge HMRC rulings, but there ought to be an easier way of figuring this out for oneself. If I’m genuinely only eligible for class 3, then so be it. Still decent. On the other hand, class 2 is a better deal (and all my UK friends here in Japan have been approved for class 2!)

It’s funny that even a post about the Japanese pension gets turned into a post about the UK pension

JimNasium wrote: ↑Mon Sep 23, 2024 2:24 am It’s funny that even a post about the Japanese pension gets turned into a post about the UK pension

and on page 7, someone will mention hitler...

JimNasium wrote: ↑Mon Sep 23, 2024 2:24 am It’s funny that even a post about the Japanese pension gets turned into a post about the UK pension

You could live off a British state pension in Japan, but I don't know how Japanese can live off just over 60,000 yen a month, and there are quite a few people especially elderly women in their nineties who do it.

Wales4rugbyWC23 wrote: ↑Mon Sep 23, 2024 11:08 am
You could live off a British state pension in Japan, but I don't know how Japanese can live off just over 60,000 yen a month, and there are quite a few people especially elderly women in their nineties who do it.

Families support them, don't they?
Even without a mortgage or rent payment, 60,000 a month would be tough/impossible.

beanhead wrote: ↑Mon Sep 23, 2024 11:16 pm

Wales4rugbyWC23 wrote: ↑Mon Sep 23, 2024 11:08 am
You could live off a British state pension in Japan, but I don't know how Japanese can live off just over 60,000 yen a month, and there are quite a few people especially elderly women in their nineties who do it.

Families support them, don't they?
Even without a mortgage or rent payment, 60,000 a month would be tough/impossible.

Yes, but a lot of them are widows and maybe some don't have kids. I really am surprised about how low the pensions are in Japan. I have watched numerous personal finance shows on Japanese TV with profiles of retirees who had well paid jobs and a lot of them are only getting just over 20 man a month.

beanhead wrote: ↑Mon Sep 23, 2024 11:16 pm

Wales4rugbyWC23 wrote: ↑Mon Sep 23, 2024 11:08 am
You could live off a British state pension in Japan, but I don't know how Japanese can live off just over 60,000 yen a month, and there are quite a few people especially elderly women in their nineties who do it.

Families support them, don't they?
Even without a mortgage or rent payment, 60,000 a month would be tough/impossible.

Basically they qualify for extremely subsidized housing, and the remainder on food and utilities. It is grim. Very high rates of poverty among Japanese seniors.

https://www.youtube.com/watch?v=C2ZrloHIN-Y


................

Part-timers who make a "decent" income, can fall into this trap when they do not save/invest outside of base nenkin. A UK colleague of mind even laughed off the suggestion of trying for the UK class 2/3 pension as he would have to "pay" into the system.

He will have about 6-7 man a month ... if he works for 40 years cumulatively. One of his kids goes to a private school, and hes tapped out monthly.

He is on the same path.