RetireJapan

A decent write-up of qualifying years by Low Incomes Tax Reform Group (LITRG):

A ‘qualifying year’ sounds as though you might need to have 52 weeks of working for it to count. In fact, for Class 1 NICs (those payable by employees), any tax year where you receive a minimum amount of earnings or credits (which you receive for example, if you cannot work because you are bringing up children who are aged under 12) can be a qualifying year. The 2022/23 tax year could be ‘banked’ as a qualifying year provided you have earned the equivalent of 52 x £123 (this amount is the weekly Lower Earnings Limit) – total £6,396. Please note that any pay periods in which you have earned under the Lower Earnings Limit will not count towards the total.

You could also make up a qualifying year for 2022/23 by, say, earning £123 for 40 weeks and then receiving NIC credits for the other 12 weeks.
https://www.litrg.org.uk/tax-guides/stu ... -insurance

I hope I'm not too late to the party on this one.

According to my records with HMRC, I have three full years of payments or credits. Two of these years were while at sixth form, so I believe they are credits and not payments.
If this gives me the 3 years necessary, I’ll go ahead and apply to pay for class two payments.

I’m hoping that I was employed prior to my date of departure but still trying to figure that out. I left the UK for Japan in the summer of 98. Since then I have had occasional short periods of work in the UK and on one occasion I signed on for a few weeks. The trouble is that I don’t know exactly when that was. The last time I had a short period in the UK was June 03. It was only about three weeks so I don’t think that would have been the time to sign on as it took a while to process a claim back then. There are also no records of national insurance contributions for this time. The last national insurance contribution records are for 2001.

My questions are these:
Even though I didn’t pay for three years, my record with HMRC shows that I have three full years of contributions from 92 to 95. Is this one of the qualifying factors for being eligible for class two payments?

Is there somewhere online where we can view our benefits history in the same way that we can view our national insurance contribution payments history?

Thank you for all the help. I've had so far in reading threads on this forum!

rabidwatermelon wrote: ↑Sun May 14, 2023 10:56 pm
My questions are these:
Even though I didn’t pay for three years, my record with HMRC shows that I have three full years of contributions from 92 to 95. Is this one of the qualifying factors for being eligible for class two payments?

Is there somewhere online where we can view our benefits history in the same way that we can view our national insurance contribution payments history?

Thank you for all the help. I've had so far in reading threads on this forum!

For the 1st question, the Wiki has consolidated most/all of the necessary information.

https://retirewiki.jp/wiki/United_Kingd ... te_Pension

Those 3 years would be for when you were 16,17, and 18 and in full-time education. These were the only years I had. I applied and I am able to voluntarily pay NI contributions.

Benefits - no idea. If there is nothing on the ukgov site, I would guess not.

rabidwatermelon wrote: ↑Sun May 14, 2023 10:56 pm I hope I'm not too late to the party on this one.

According to my records with HMRC, I have three full years of payments or credits. Two of these years were while at sixth form, so I believe they are credits and not payments.
If this gives me the 3 years necessary, I’ll go ahead and apply to pay for class two payments.

I’m hoping that I was employed prior to my date of departure but still trying to figure that out. I left the UK for Japan in the summer of 98. Since then I have had occasional short periods of work in the UK and on one occasion I signed on for a few weeks. The trouble is that I don’t know exactly when that was. The last time I had a short period in the UK was June 03. It was only about three weeks so I don’t think that would have been the time to sign on as it took a while to process a claim back then. There are also no records of national insurance contributions for this time. The last national insurance contribution records are for 2001.

My questions are these:
Even though I didn’t pay for three years, my record with HMRC shows that I have three full years of contributions from 92 to 95. Is this one of the qualifying factors for being eligible for class two payments?

Is there somewhere online where we can view our benefits history in the same way that we can view our national insurance contribution payments history?

Thank you for all the help. I've had so far in reading threads on this forum!

Welcome, and great timing to be applying for voluntary NICs.

Here are the Class 2 criteria from the wiki (which in turn are taken from primary sources):
https://retirewiki.jp/wiki/United_Kingd ... rom_abroad

Voluntary Class 2 NICs from abroad: eligibility criteria
All three of the below conditions must be met:
1. You’re employed or self-employed outside the UK, and
2. You’ve lived in the UK for a continuous 3-year period at any time before the period for which NICs are to be paid*, or
before going abroad, you paid a set amount in NICs for 3 years or more (this will be checked when you ask to pay Class 2 NICs*), and
3. Immediately before going abroad, you were ordinarily an employed or self-employed earner in the UK.

* time spent in the EEA, Switzerland or Turkey may count

In your case:

1. If you’re employed or self-employed in Japan, tick

2. You can qualify either by (a) 3 continuous years of living in the UK or (b) *paying* a set amount of NICs for 3+ years. Do you have a period of residency that meets the criteria for (a)? If so, the NICs paid/credited will be irrelevant... BUT #3 might be troublesome if you don't have a track record of NICs...

3. What were your employment circumstances in the UK in the 3 years prior to moving abroad? Given that your post suggests that you don't have (significant) NICs, I think it is unlikely that you'd qualify as 'ordinarily an employed or self-employed earner in the UK immediately prior to departure'.

Apologies if that is not good news, but my initial reading of the situation (and there could be nuances to your circumstances that keep the door ajar for Class 2?) is that you'd probably be ineligible for Class 2, but would probably be eligible for Class 3, provided that at any point (including in childhood) you have had a continuous 3yr period of residency in the UK:

Voluntary Class 3 NICs from abroad: eligibility criteria
One of the following conditions needs to be met:
1(a) You’ve lived in the UK for a continuous 3-year period at any time before the period for which NICs are to be paid*, or
1(b) Before going abroad, you paid a set amount in NICs for 3 years or more, or
1(c) You've paid Class 1 contributions for the first 52 weeks of your employment abroad

* time spent in the EEA, Switzerland or Turkey may count

Backpaying for years at the Class 3 rate is still a great deal. You currently have 3 years of credits, but your state pension would be zero, due to having fewer than 10 qualifying years. In the next 6 months you could potentially upgrade this to a pension of £5,750+pa at today's rates (via 16 new backpaid years + 3 qualifying years = 19/35ths of the full pension).

To circle back to the original questions:

Even though I didn’t pay for three years, my record with HMRC shows that I have three full years of contributions from 92 to 95. Is this one of the qualifying factors for being eligible for class two payments?

See above. 3+ years of *paying* a set amount of NICs can help meet the eligibility criteria, but credits don't appear to 'count' for this purpose.

Is there somewhere online where we can view our benefits history in the same way that we can view our national insurance contribution payments history?

https://retirewiki.jp/wiki/United_Kingd ... uest_(SAR)
An HMRC Subject Access Request (SAR) can include information about benefits.

I got an interesting letter from HMRC yesterday. It was dated 3rd June, so not bad for them (less than a month). It said:
"We've looked at your National Insurance record and you currently satisfy the National Insurance conditions for entitlement to at least the State Pension at the full rate. You do not need to pay any further voluntary contributions."

I've paid 37 years, by the way. The second sentence is a pleasant surprise. I thought that they'd have kept it quiet and left it up to me as to whether I kept paying or not. But no, they've actually confirmed that they don't want any more payments from me. Respect

Ominously though, they added a bit further down the page:
"Your State Pension could be affected by:
- any future changes in the rules
- your personal circumstances"

Hopefully this is just the usual disclaimer that things might change, and not a hint that new rules are being considered that affect retirees living abroad and/or have stopped paying voluntary NICs!

My Japanese wife has 10 more years to pay towards a full state pension (which in her case requires 35 years of contributions). But so far, so good.

northSaver wrote: ↑Fri Jun 30, 2023 1:48 am "You do not need to pay any further voluntary contributions."

Congratulations!

northSaver wrote: ↑Fri Jun 30, 2023 1:48 am
I've paid 37 years, by the way. The second sentence is a pleasant surprise. I thought that they'd have kept it quiet and left it up to me as to whether I kept paying or not. But no, they've actually confirmed that they don't want any more payments from me. Respect

Nice. May I ask how many years you paid in Japan, if you will be getting pensions from both countries?

Also, since you are a bit closer to receiving these pensions than me, how do you include them in your calculations?
If you think you need, say 5M yen in retirement and the pensions cover 3M, are your plans based on requiring 2M per year from investments (or annuities or dividends or whatever)?
The reason I ask is that, as you noted, pension payouts are always subject to change. Those of us 15-20 years away from receiving them need to be more cautious. I just wondered how that changes as you get closer to receiving state pensions.

beanhead wrote: ↑Fri Jun 30, 2023 2:09 am Also, since you are a bit closer to receiving these pensions than me, how do you include them in your calculations?
If you think you need, say 5M yen in retirement and the pensions cover 3M, are your plans based on requiring 2M per year from investments (or annuities or dividends or whatever)?

I think about these separately but keep them both in mind:

1. be aware of and calculate likely pension income
2. estimate future spending needs
3. estimate potential growth of investments and reasonable withdrawal rate

Right now I think we could live off 1. in a pinch, and 3. is likely to be far more than we need.

But I don't trust things not to change

northSaver wrote: ↑Fri Jun 30, 2023 1:48 am I got an interesting letter from HMRC yesterday. It was dated 3rd June, so not bad for them (less than a month). It said:
"We've looked at your National Insurance record and you currently satisfy the National Insurance conditions for entitlement to at least the State Pension at the full rate. You do not need to pay any further voluntary contributions."

I've paid 37 years, by the way. The second sentence is a pleasant surprise. I thought that they'd have kept it quiet and left it up to me as to whether I kept paying or not. But no, they've actually confirmed that they don't want any more payments from me. Respect

Ominously though, they added a bit further down the page:
"Your State Pension could be affected by:
- any future changes in the rules
- your personal circumstances"

Hopefully this is just the usual disclaimer that things might change, and not a hint that new rules are being considered that affect retirees living abroad and/or have stopped paying voluntary NICs!

My Japanese wife has 10 more years to pay towards a full state pension (which in her case requires 35 years of contributions). But so far, so good.

This worries me a bit. It's hard to see how they could justify, say, not paying out to people who have paid in, but at the same time if they made a new rule saying those living abroad are no longer entitled to a pension I'd imagine there would be very little pushback from those it didn't affect directly. We could kick up a fuss but the average Joe in the UK probably couldn't care less about emigrants. They might even support such a change!

I suspect if there were a change, it would be more likely to be stopping the class 2 and 3 reduced rates, rather than removing entitlement entirely.

beanhead wrote: ↑Fri Jun 30, 2023 2:09 am Nice. May I ask how many years you paid in Japan, if you will be getting pensions from both countries?

Also, since you are a bit closer to receiving these pensions than me, how do you include them in your calculations?
If you think you need, say 5M yen in retirement and the pensions cover 3M, are your plans based on requiring 2M per year from investments (or annuities or dividends or whatever)?
The reason I ask is that, as you noted, pension payouts are always subject to change. Those of us 15-20 years away from receiving them need to be more cautious. I just wondered how that changes as you get closer to receiving state pensions.

You mean the Japanese state pension? I only have 10 years of that since I didn't realise I had to pay it at first. And it's all kokumin, so not expecting much income from that at all. The full UK one is a different matter though, along with a UK company pension that's about the same size. As things stand, those will help my (our) retirement income a lot.

Yeah, I think about the retirement permutations quite a lot, and probably even more next week because I'll be running a full check for end of Q2. I use calculators such as cFIREsim (https://cfiresim.com/) to see how we might manage in various scenarios. This is powerful because it allows income to be inflation adjusted or not depending on how you set it. It's based on US data though, so not ideal for retirees in Japan. One of the worries I have about our UK pensions is the exchange rate. If GBP.JPY drops to all-time lows then it probably won't be enough. So it's best to run simulations based on low exchange rates as well as average ones, to cover all scenarios.

I'll try James Shack's UK calculator (see https://www.youtube.com/watch?v=d0DUV5noXus) next week to see how they compare. I think he uses US data too due to not enough historical data from other countries.

I might post more about this in July after I've crunched the numbers and thought about it some more. I'm still 11 years away from receiving my UK state pension, by the way