UK State pension - Am I class 2 or Class 3

[DannyBoyD]

How much does it cost to make a voluntary contribution?
Most common is either Class 2 or Class 3 contributions: Class 2 will be cheaper, but even if you are assessed as Class 3 it's still worth doing.

Class 2 Annually: £163.80 (GBP) - £3.15 per week
Class 3 Annually: £824.20 (GBP) - £15.85 per week

Which will I pay: Class 2 or Class 3?

Living and working abroad	Class 2 - but only if you worked in the UK immediately before leaving, and you’ve previously lived in the UK for at least 3 years in a row or paid at least 3 years of contributions
Living abroad but not working	Class 3 - but only if at some point you’ve lived in the UK for at least 3 years in a row or paid at least 3 years of contributions

 

[DannyBoyD]

Class 3 is still worth paying for most people.

Each year will cost you £824
Each year purchased will get you an extra £275 a year in state pension.

If you are 65, getting an immediate return of £275 a year on £824 is great value. You will break even in 4 years.

If you are 30, paying £824 now to get £275 a year in 35 years is probably not worth it.

Brendan

 

[RedOnion]

Is it possible to add explainer of who qualifies for class 2 vs class 3 contributions? Especially if someone had breaks in employment history, are there circumstances where you move between classes depending on your employment status in Ireland after leaving UK?

 

[tiegan]

A bit confused about the class2/class3 contributions thing. I worked in the uk for 9 years, came to Ireland in 1988 and worked here ever since. So I think I should be eligible for class 2 contributions. However, when I check the missing years out on the gov.uk website, all the payments are for class 3 £800 plus - how do I check this out? As I am looking at paying the max of 16 years contributions it makes a huge difference!

 

[DannyBoyD]

A bit confused about the class2/class3 contributions thing. I worked in the uk for 9 years, came to Ireland in 1988 and worked here ever since. So I think I should be eligible for class 2 contributions. However, when I check the missing years out on the gov.uk website, all the payments are for class 3 £800 plus - how do I check this out? As I am looking at paying the max of 16 years contributions it makes a huge difference!

Complete the CF83 Form, add a covering letter with all your details and that you believe you should be able to pay Class 2; given how long they are taking to reply, I'd send it by recorded delivery. Once you have proof that you applied before the deadline, they will honour that & you can make your back payments. In the meantime start saving as you'll have to make the back payments in a lump sum.

 

[partnership]

Interesting to look at the National Insurance record on the portal. IN my pension estimate I was told I have 7 full years. When I look at the record on the portal it says 7 years but when I look at the breakdown it is 4 years. I wonder whether they give you pre-credits. It shows that I need to make payments of about £824 from 2006 but I assume this is class 3 and when they look at my form I will pay class 2 as I have been working in Ireland, was working before I left the UK and also spent more than 3 years in the UK.

 

[cremeegg]

The UK govt website tells me
re 2006 and subsequent years.

Why is it asking me for the class 3 amount rather than the class2 ?

Can I just make a payment or do I need to send in a CF83 form first.

Thanks to all who are sharing here.

 

[DannyBoyD]

In the key post there's a description of the difference in assessment between class2 and class3.

If you believe you should be Class 2, complete the CF83 form with a covering letter explaining why. Given their delay in correspondence, I would send by recorded delivery. Once you have proof that you have applied within the deadline they will honour that.

 

[SimonP]

Even without looking at that, if you can pay Class 2, I'm 100% certain it's the best investment you could make pensions wise.

Yes agreed, I'm quite sure it should make a difference.... I'm registered etc on the website and I have my letter from last year saying I've been accepted to pay class 2 but for some reason my contributions records page on the website only shows the class 3 amounts under the details of each year - about £800 per year for 16 years!

 

[davy200]

My understanding is-I last worked in the UK in 1989 but can't buy back from then to 2006. I can 9nly buy back from 2006 on. If you check each year on your account it will tell you if you can buy back.

yes that's exactly right. when you create and login to an account, each year will have a note in the 'details' of whether you can make contributions for that year or not, and if so, how much it would be. My list allows for additional contributions for as far back as tax year 2006-07, and any earlier year than that is marked "It’s too late to pay for this year. You can usually only pay for the last 6 years."

Don't look a gift horse in the mouth as they say! If you can pay Class 2 now so much the better

Totally agree DannyBoyD. The whole thing is a no brainer and well done on kicking off the great discussion. I was only clarifying the question about whether years of study counted as "Full years" in how they calculate it. I posted off my Form and cover letter today (registered post €9.70). I do find the Category 2 and 3 discussion a bit hard to follow. Sometimes it seems Cat 2 relates only to self employed folks, other times it could be taken to mean Full time employed as well. I've made my case for Cat 2 in my cover letter. Let's see. If it helps in figuring some of this stuff out, it's worth noting that I am from the North originally and therefore had a Uk National Insurance number automatically. I went to college in England, then stayed there and worked in Full time employment for 5 years before moving to permanent residence in ROI in 2001. My gov.uk account shows me with 8 "Full years", 3 from college, then the 5 from the employment afterwards. I see the £824.20 buyback figure for every year from 2006-7 to 2021-22, though obviously these are the Cat 3 figures. For some reason it shows the buyback amount for 2020-21 as slightly less at £795.60) and 2021-22 has a figure of £800.80 (maybe due to 2020 being a leap year??)

 

[Skipper76]

Okay two questions.
1) The biometric passport stuff is that for the Government Gateway or is there extra ID requirements for the NI top-up? I already have a UK Government Gateway account so do I need to do more to access NI top-up?
2) If I just go Class 3 and full 16 years can I pay that online without any faffing about? I moved here in 2006 to look after elderly parent returnees and never worked in Ireland as thankfully they are heading towards a hundred but obviously take all my time up.

 

[davy200]

Okay two questions.
1) The biometric passport stuff is that for the Government Gateway or is there extra ID requirements for the NI top-up? I already have a UK Government Gateway account so do I need to do more to access NI top-up?
2) If I just go Class 3 and full 16 years can I pay that online without any faffing about? I moved here in 2006 to look after elderly parent returnees and never worked in Ireland as thankfully they are heading towards a hundred but obviously take all my time up.

The Biometric passport stuff is part of the process of creating a Government Gateway user account. From memory, it was just the passport check and NI number that I needed to create the account. After creating that, when I login, I could see all my historical NI data, going back 30 years. Are you able to see that view? I go in via this link https://www.gov.uk/check-state-pension and after entering Government gateway user ID and password, the page I land on is called "Your State Pension summary", with a big green box showing my predicted pension entitlements for the future, based on my record to date. Are you able to see that view??

I wouldn't rush to pay class 3 if there was a decent chance you could be eligible for class 2, as thats 80% reduced. In 30 mins yesterday i filled out the CF83 form and wrote a quick covering letter and sent it off.

 

[DannyBoyD]

moved here in 2006 ....and never worked in Ireland

Pretty sure you'd be class 3 in that case. Still worth doing - 800 per year investment for 9k per year return.

 

[Ash21]

Both my husband and I worked in the UK. I have 2 questions:

My husband (British) worked for10 years till 1998 and then about 2 years in the mid 2000's - so class 2
I lived in the UK but only part of 3 years; lived part of and did not work in 2006, worked and lived 2007, worked part of 2008 and returned in the summer of said year. I accessed my details online and seems I am class 3, could I qualify for class 2?

We will fill in the forms, but how do make the backdated voluntary payments? we may decide to only pay for some years.

 

[davy200]

I thought that within EU, a person could choose only one state pension from a country not two.

My husband is from a staunch conservative area, huge shift particularly in the last year. Wouldn't surprise me, or at least joining a version of the SM.

Both my husband and I worked in the UK. I have 2 questions:

My husband (British) worked for10 years till 1998 and then about 2 years in the mid 2000's - so class 2
I lived in the UK but only part of 3 years; lived part of and did not work in 2006, worked and lived 2007, worked part of 2008 and returned in the summer of said year. I accessed my details online and seems I am class 3, could I qualify for class 2?

We will fill in the forms, but how do make the backdated voluntary payments? we may decide to only pay for some years.

I am still not clear on the class 2 v class 3 thing. On your last question, I guess by filling out the forms and submitting them with covering letter, that you must at some point end up in a back and forth dialogue with someone in the Pensions office and they will guide you through that part. I only sent off my paperwork yesterday so I am not at that point yet. I guess that it would be good if anyone on here who has been a long way through the process, could advise on what the steps were along the way. Have you created your account and seen the view of your Ni contribution status/history?

 

[Sarah1006]

Question, I worked in the UK for 4 yrs, left in 2012, moved back to Ireland to start a degree followed by a masters (6 yrs). In full employment since. Does this mean I won't qualify for class 2?

 

[NoRegretsCoyote]

worked and lived 2007, worked part of 2008 and returned in the summer of said year. I accessed my details online and seems I am class 3, could I qualify for class 2?

My employment history very similar to yours and I could only pay Class 3. It is still worth contributing.

I thought that within EU, a person could choose only one state pension from a country not two.

Not so. You can claim as many pensions as you are entitled to. In certain circumstances you can aggregate contributions to claim a single pension in one country that would leave you better off than if you claimed in both.

 

[Protocol]

Which will I pay: Class 2 or Class 3?

Living and working abroad	Class 2 - but only if you worked in the UK immediately before leaving, and you’ve previously lived in the UK for at least 3 years in a row or paid at least 3 years of contributions
Living abroad but not working	Class 3 - but only if at some point you’ve lived in the UK for at least 3 years in a row or paid at least 3 years of contributions

Class 2 vs. class 3 seems to be based on what you did on your return to Ireland after the UK? IS that correct?

Worked in UK, returned to Ireland, then never worked = class 3 - is that correct?

 

[DannyBoyD]

Worked in UK, returned to Ireland, then never worked = class 3 - is that correct?

that would appear to be the case

 

[Protocol]

Pretty sure you'd be class 3 in that case. Still worth doing - 800 per year investment for 9k per year return.

I don't understand this.

Buying one year at class 3 rates costs 824.20 GBP once-off payment.

That adds 5.29 per week to the pension, or 275 GBP per year, for each year past age 67.

Isn't that correct?