Have you topped up a UK pension to cover gaps?

[andye]

Can you specify which years you want to pay for? My understanding is that you pay a lump sum into the HMRC bank account and then they allocate it - but I can't see anything that tells me how they do this (ie will they allocate to Class 2 years first or Class 3)? My wife is in a similar situation with a mix of class 2 and 3, but she only needs to top up the class 2's to get her full 35 years.

I was wrestling with this as she has 3 class 3 years when not working in Aus before the Class 2s to date.

I called and they said not to worry and they would allocate the best way.

I am not 100% confident they will do it to best advantage but apparently the advice is to wait the 6-8 weeks for the record to update then there is a process where you can ask for the payment to be reallocated if you don't like what's happened

 

[SydneySwan]

Could you simply not make multiple payments, one for each year that you wish to pay? If it comes down to reallocating - at least you can argue it should have been obvious that you were paying a year at a time for the cheapest years.

 

[aplmac]

Just as an observation of the UK pension system: I've just come off the phone to them (1hr 6mins on hold) to query why my 2023-2024 year for National Insurance contributions is showing as "year not full".
I received my contributions invoice dated 6th April 2024 by snail mail, and paid it upon receipt 14th May 2024. So six months ago.
When I finally spoke to a human, he advised me that yes, my payment had been received 14th May, and was sitting in my NI account, just not allocated to the tax year. So I asked when that would that happen, and he said that if he sends in the enquiry to the "specialist team that does the allocations" TODAY, the estimated backlog time for them to look into it would be MID-AUGUST 2025!!! (by which time I'll have got my notice for the 2024-2025 tax year) so if my record isn't showing updated by mid-August 2025, please to give them a call back then so they can escalate it!!! Pip pip cheerio!!
Honestly, there are no words.....!!!!

 

[kelvedon]

Exactly

Just as an observation of the UK pension system: I've just come off the phone to them (1hr 6mins on hold) to query why my 2023-2024 year for National Insurance contributions is showing as "year not full".
I received my contributions invoice dated 6th April 2024 by snail mail, and paid it upon receipt 14th May 2024. So six months ago.
When I finally spoke to a human, he advised me that yes, my payment had been received 14th May, and was sitting in my NI account, just not allocated to the tax year. So I asked when that would that happen, and he said that if he sends in the enquiry to the "specialist team that does the allocations" TODAY, the estimated backlog time for them to look into it would be MID-AUGUST 2025!!! (by which time I'll have got my notice for the 2024-2025 tax year) so if my record isn't showing updated by mid-August 2025, please to give them a call back then so they can escalate it!!! Pip pip cheerio!!
Honestly, there are no words.....!!!!

Exactly the same for me. Paid in May, not showing on my NI contributions record so called them in August. Was told that yes, they had received the payment but it would take 8 weeks to be reflected on my records……still not showing.
The time frame is not a concern to me, but interestingly my estimated maximum pension (at 67) has been reduced by the equivalent of one year, though the current eligibility amount remains the same. I.e. they seem to have reduced by existing “years of contribution” by a year.

 

[aplmac]

Exactly

Exactly the same for me. Paid in May, not showing on my NI contributions record so called them in August. Was told that yes, they had received the payment but it would take 8 weeks to be reflected on my records……still not showing.
The time frame is not a concern to me, but interestingly my estimated maximum pension (at 67) has been reduced by the equivalent of one year, though the current eligibility amount remains the same. I.e. they seem to have reduced by existing “years of contribution” by a year.

Shrinkflation!

 

[Rebus]

Can you specify which years you want to pay for? My understanding is that you pay a lump sum into the HMRC bank account and then they allocate it - but I can't see anything that tells me how they do this (ie will they allocate to Class 2 years first or Class 3)? My wife is in a similar situation with a mix of class 2 and 3, but she only needs to top up the class 2's to get her full 35 years.

Both my wife and I are approved to make NI contributions at the Class 2 rate. She made an initial payment of 1 year as a dummy run. We assumed that it would be allocated to the oldest outstanding year but it was filled against the current FY. We then made another payment equivalent to 3 years and sent a hard copy letter (yes, really) to confirm that we had made the payment and stipulating the years against which the payment was to be allocated. A few months later we could see that her NI record had been correctly updated. HMRC also sent a hard copy letter to confirm payment receipt and allocation.

My take away from this is that each time we make a payment we are going to send a letter via snail mail to confirm and state the years to which it refers. It may be the case that each incoming letter has to be scanned, allocated to an employee and actioned.

On a side note, I echo the sentiments of others that if you are approved to backfill outstanding years at Class 2 rates it is a no-brainer. Yes, the income will affect your Australian age pension entitlement but the lack of means-test makes the UK age pension well worth having. I would also suggest to pay as many outstanding years as you can afford in case your cicrumstances change and you are not longer working. At that point you would have to pay at the Class 3 rate.

 

[kelvedon]

Be aware that UK age pensions drawn in Australia are frozen at the rate that they are first drawn. There is no increase in the amount paid, which with inflation diminishes the real value of the pension.

 

[FlyingFiona]

For those of you who have recently been approved and have made payments to cover gaps in your pension history, could you confirm a few things for me because I'm confused and have been sitting on things because I'm unclear how to proceed:

1) that you paid Class 2 and Class 3 separately

2) whether you paid from a UK or Australian bank account (if UK why? is it better to do it this way?)

 

[Rebus]

For those of you who have recently been approved and have made payments to cover gaps in your pension history, could you confirm a few things for me because I'm confused and have been sitting on things because I'm unclear how to proceed:

1) that you paid Class 2 and Class 3 separately

2) whether you paid from a UK or Australian bank account (if UK why? is it better to do it this way?)

1) I was approved to pay Class 2 but one year on my statement was shown at the Class 3 rate. This related to my last few months in the UK before emigrating. I intend to make my payment of all outstanding years early next year and will be doing so as a lump sum. However, as mentioned upthread I will be sending a letter with a breakdown of the years that my payment relates to. AFAIK the payments for Class 3 and Class 2 are both made to the same HMRC account.

2) We paid my wife's NI from our Australian bank account via the Wise money transfer service. I plan to do the same. I still have a UK bank account in my name but am not aware of any benefit in paying from it as opposed to my local one. As long as the payment reference is correct, HMRC should be able to allocate it against your NI account.

 

[dvt]

My take away from this is that each time we make a payment we are going to send a letter via snail mail to confirm and state the years to which it refers. It may be the case that each incoming letter has to be scanned, allocated to an employee and actioned.

That's good to know. I made a test payment this week so I'll write a letter to follow up. Did you send it to the FT operations address? Also, is your payment record updated periodically online? I had a look yesterday and I had the impression that they update at the end of each year.

thanks

 

[SydneySwan]

A primary benefit of using a UK bank account is when paying for future years. You can setup a direct debit so that DWP can debit your contributions for future years as they are due.

 

[SydneySwan]

Be aware that UK age pensions drawn in Australia are frozen at the rate that they are first drawn. There is no increase in the amount paid, which with inflation diminishes the real value of the pension.

My bolding. I don't want to be too pedantic but your pension is frozen from when you first become entitled to it. If you apply for it after you are entitled to it you don't get the benefit of increases that have happened in the meantime.

The best way to get pension payments unfrozen is to support those groups that are lobbying for change;

British Pensions in Australia - Home - British Pensions in Australia
Silver voices - Join Us | Silver Voices

There is also a petition on change.org everyone can sign.

I posted the above in July 2024. The movement to unfreeze pensions has gained a bit more momentum since and recently a 100 year old Canadian frozen pensioner flew to the UK to try and meet PM Starmer. You can read about it here.

A Personal Thank You for Your Incredible Support on My Mum’s 100th birthday

Today is my Mum’s 100th birthday, for which I would like to personally take the opportunity to thank each and every one of you who has taken the time to sign and share this petition. Your support was instrumental to making my Mum’s journey to Westminster this month so meaningful and shaping a...

www.change.org

 

[Telemachus]

A primary benefit of using a UK bank account is when paying for future years. You can setup a direct debit so that DWP can debit your contributions for future years as they are due.

Good point. And for those who no longer have a UK bank a/c and as non-residents are unable to open one, the options include a Wise a/c. UK is one of the countries for which Wise Australia can provide your own local bank a/c details (sort code + a/c number) even though it isn’t actually a bank a/c. You can set up direct debits from this virtual UK a/c and of course it will work for receiving the eventual pension payments from DWP and holding these and other funds in GBP if that suits your circumstances.

 

[Rebus]

That's good to know. I made a test payment this week so I'll write a letter to follow up. Did you send it to the FT operations address? Also, is your payment record updated periodically online? I had a look yesterday and I had the impression that they update at the end of each year.

thanks

I sent it to the PT Operations North East England address which was on the letter we received approving Class 2 payments.

Your NI record will be updated online but it takes a long time between them receiving your payment and it being reflected on your record. However, the date they receive the payment is what HMRC use to determine if it was made before the deadline.

 

[Rebus]

British Pensions in Australia - Home - British Pensions in Australia

I am a member of this organisation and would encourage others on this thread to do so. You receive regular newsletters and of course are supporting the group to conduct their lobbying efforts.