Three years in Britain can snare you a 30-year pension

It looks like I will get the British pension and am able to top up at the cheaper Class 2 rate. None of this would have happened without your help and advice! Thankyou so very much – you are really doing an awesome job. [Name withheld]

Now, I don’t usually publish success letters such as yours – and I get a few. After all, this is supposed to be a column about problems.

But this letter is about a rapidly closing opportunity that I highlighted last year for thousands of other Aussies who have also worked in Britain for as few as three years, to secure a cut-price British pension for perhaps three decades. And there are probably only days to act.

Here’s how it worked in this very satisfying case…
The person is an Australian passport holder (British too, but that’s not necessary) who lived in Britain from 2002 to 2008 while in her late 40s and early 50s and worked as a visual artist. Over that time, she chalked up seven years of National Insurance contributions – compulsory premiums deducted from employees’ salaries to fund state benefits.

She then left without giving that a second thought until, in 2018, she chanced upon my article about how to turn a working holiday into a work-free payday.

“I was given the choice [by Her Majesty’s Revenue and Customs] to top up form three years to eight years and I’m going to top up eight years – it’s so worth the money!”

In fact, for an outlay of just over $2,000, from age 66 she will receive an annual pension that is today $6391. Did you catch that the last figure is annual?

This is because they were about to convince HMRC she should be allowed to contribute at a cheaper (Class 2) rate of National Insurance, an ability scheduled to disappear on April 6. (Note they will initially quote you far more expensive Class 3 contributions.)

Could this work for you too?
Pension Transfer Specialists, the company I quoted in my story and [name withheld] used to arrange her pension, says: “We have had people top up who lived in the UK a very long time ago.

“Three years either living or working in the UK will allow you to purchase additional years… and it’s certainly a worthwhile exercise to see if you can top up at the cheaper Class 2 contribution rate.

“I haven’t had any rejected based on leaving the UK a long time ago – HMRC may take some months to respond but the UK will generally still accept a top up”

And that’s your urgency – there are about 11 weeks of this British fiscal year left.

But hooray: the Brexit turmoil and impact on the pound means additional contributions are now far cheaper…if you have confidence Britain will honour/be able to honour its pension commitments.

Written by Nicole Pedersen-McKinnon