Latest news with #voluntarycontributions
Telegraph
30-06-2025
- Business
- Telegraph
The countries where you can live abroad and still get the state pension
If you are thinking about relocating abroad on a permanent basis, you might assume you'll stop paying National Insurance contributions in the UK. You might then imagine that you'll need to pay 'social security' – or the equivalent – in your new country of residence. But what you might not realise is that there are a host of countries that have agreements with the UK in terms of National Insurance contributions. Under those 'social security agreements', there is the option to pay voluntary National Insurance contributions while living overseas which will count towards your state pension record back here in the UK. Adelle Greenwood, technical manager (tax) at the Institute of Chartered Accountants in England and Wales, said: 'Former UK residents who have moved abroad may wish to consider paying UK voluntary National Insurance contributions to secure future state pension and other benefits entitlement.' Here Telegraph Money takes a closer look at what's involved. National Insurance record and state pension Before we delve deeper into the possibility of making National Insurance contributions while abroad, it's worth reminding yourself of the state pension rules. Becky O'Connnor, director of public affairs at PensionBee, said: 'To get any state pension when you reach state pension age, you need 10 'qualifying years' on your National Insurance record.' However, if you have less than this, you may be able to use your overseas social security contributions to make up the 10 qualifying years. In other words, filling in the gaps in your National Insurance record could help you qualify for a UK state pension. Ms Greenwood said: 'With this in mind, you may want to review your National Insurance record to evaluate your contribution history and see if there are any gaps you wish to cover. 'Armed with this information, you can then make an informed decision about contributing while living outside the UK.' How does it work? The way in which living or working – or having lived or worked – in another country could affect your claim for the state pension depends on two key things: How many qualifying years you have in your National Insurance record; Which countries you have lived or worked in. In short, being able to use overseas National Insurance contributions is most likely if you have lived or worked in the European Economic Area (EEA), or Switzerland. But it's also possible in certain countries that have a 'social security agreement' with the UK – more on this below. Ms O'Connor said: 'If you work and contribute to the social security system in any of these countries, reciprocal arrangements mean that these years can be added to the qualifying years in your National Insurance record.' Understanding 'aggregation' It's worth getting to grips with the idea that while, in some countries, you may be able to 'aggregate' UK and local contributions for 'qualifying' purposes – this is not for the pension amount. In other words, where agreements are in place, years can be 'added', but the amount you get paid depends on the number of qualifying years in your UK record, not the years of work abroad. Ms Greenwood said: 'This means any contributions made in the other country will be taken into account when determining eligibility for state benefits – but not usually for the calculation of the amounts due.' Worked example The government website provides some examples of how this can work in practice. Say you have seven 'qualifying years' from the UK on your National Insurance record when you reach state pension age. But during your life, let's say you worked in an EEA country for 16 years, and paid contributions to that country's state pension. This will come into play. As a result of the time you worked abroad, you will meet the 'minimum qualifying years' to get the new state pension. That said, the amount of new state pension you actually get will only be based on the seven years of National Insurance contributions you made in the UK. Different rules apply to Canada, New Zealand and Australia Having got your head around this, it's important to note that for some countries, the rules are slightly different. Ms O'Connor said: 'The exception to this is, if you currently live in the UK, time spent living in Canada or New Zealand could be added to the qualifying years in your UK National Insurance record. Similarly, time spent living in Australia before April 5 2001 can also be added.' Be wary of other criteria Wherever you live, you will also have to meet other criteria. Whether or not you are eligible will be worked out by the Department for Work and Pensions (DWP) when you make a claim. Making voluntary contributions In order to pay voluntary Class 2 or Class 3 National Insurance contributions while abroad you must have either: Previously lived in the UK for three years in a row; Or paid contributions (or had Class 2 National Insurance treated as having been paid), for at least three years. The government website provides more information here. How to set yourself up If you are planning to pay National Insurance contributions while you are overseas, you may need to apply for a certificate called a CF83 confirming that you pay social security in the UK. Once you've sent the relevant paperwork to HMRC, you will be told whether you are eligible – and what class and rate you can pay. How will years get added? If you do meet the criteria – meaning years can be added to your record – you could be eligible for the state pension, provided you are over the 10-year threshold. As mentioned above, the actual amount you get paid will be calculated on the 'qualifying years' in your UK National Insurance record along with the time added on from the country you were living or working in. Note that you can only get paid up to the 'full rate' of the new state pension. Act with caution Before you proceed, you need to be aware that things can get a little complicated. Ms Greenwood said: 'Some people – in particular workers who have moved abroad for work purposes or who regularly work between the UK and another country – may still be liable to employee UK NIC on a mandatory basis.' Equally, there's also the possibility that a worker may now be liable to social security in the other country where they are living and working, instead of in the UK. Ms Greenwood added: 'This will depend on the country, and whether the individual's circumstances mean they come into the scope of any social security agreement in place.' Find out more here. Seek advice Matters to do with social security and National Insurance contributions can be complex – and especially for temporary non-residents. If you're not quite sure about the right approach for you, or if you have any questions, it may make sense to seek professional advice. A good starting point is the International Pension Centre. Remember, it won't increase the amount you get If you live or work in a country that has an agreement with the UK, you may be able to aggregate UK contributions and contributions you make in your 'new' country for qualification purposes. But this won't have an impact on the actual amount of pension you get. Don't assume you will get the annual uplift to the UK state pension Ms Greenwood said: 'Claimants should be aware that the annual uplift to the UK state pension does not apply if you are living in a country where there is no social security agreement with the UK – or where the provisions of the agreement do not protect the increase.' Think about the impact of moving abroad There's no escaping the fact that moving and working overseas can complicate your state pension entitlement. Ms O'Connor said: 'As a result, the payments you receive when you reach state pension age may be lower.' Moreover, if you then live overseas when you retire, this can also affect how much you receive. Ms O'Connor added: 'For anyone who lives and works abroad, this can have a noticeable impact on retirement income later on.' With this in mind, it's worth taking the time to make sure you understand the arrangements in the country you are moving to – and how these are likely to affect your retirement income.
Irish Times
24-06-2025
- Business
- Irish Times
Mixed messages on State pension entitlement from two offices in same Government department
I have 356 'reckonable paid contributions ' for State pension purposes, made up of 204 S and 148 A1 contributions, as confirmed by the records section of the Department of Social Protection in Buncrana, Co Donegal. In addition, I have been registered as a homemaker for a period of five years leading up to July 2019 by the Homemakers Section, also based in Buncrana. In July 2024, I was presented with the opportunity of purchasing voluntary contributions for the four years 2019–22 inclusive and again, recently, in respect of the year 2024 by the Client Eligibility Services Section of the Department of Social Protection in Waterford, with a 12-month limit for payment. I am finding it difficult to establish whether I have sufficient contributions paid to qualify for the lowest level of State pension once I take up the offer of purchasing the five added years. READ MORE Finally, I should point out that I have approximately seven years to run before I reach my 66th birthday. Ms MT The problem when you are dealing with Government departments, as you have discovered, is getting a clear answer in plain English. I'm not suggesting there are not challenges involved. These matters are governed by legislation where language is both very precise and, unfortunately, arcane but the whole point of having customer-facing staff in these departments is that they are able to interpret sometimes complex rules to provide simple answers that are clear and can be easily understood. Your problem here, as I understand it, is that you have been given two entirely contradictory messages from two separate offices within the same Government department. The client eligibility service section of the Department of Social Protection has, you say, offered you the chance to purchase voluntary PRSI contributions covering the four years from 2019 to 2022 as long as you make the payment by next month – July 2025. It subsequently came back to you to offer the option of buying voluntary contributions for 2024. I can see no way that you would be eligible to buy any of the years offered – at least on the basis of the advice I have been given by the Department Just one of the many oddities in your situation is that they seem to have ignored 2023 altogether. On the other hand, the Department separately says that you cannot purchase voluntary social insurance contributions at all. Under the Social Welfare and Pensions Act 2012, anyone looking to purchase voluntary PRSI since April 6th, 2015 – 10 years ago – must have at least 520 paid contributions. As you note yourself, you have just 356 stamps. Some of those are Class S, which covers self-employment and the rest are Class A, the most common PAYE class of PRSI. Both classes count towards the State pension so you are all right there, but you are 164 weekly contributions short of the minimum for buying voluntary PRSI – three years shy, in fact. There are other issues. You must apply within 60 months (five years) of the end of the last year in which you made either paid contributions or are covered by Home Making relief. That means if you are applying now for 2019, you would be declined as it is over five years ago. Five years from the end of 2019 would have taken you up to the end of 2024, not July 2025. And given the five-year deadline and the fact that you have no contributions for 2020 one way or the other, I can see no way that you would be eligible to buy any of the years offered – at least on the basis of the advice I have been given by the Department. Just to further muddy the waters, the Department tells me that 'in very exceptional circumstances, this period may be extended at the discretion of the Minister'. However, as you are three years shy of the basic 520-stamp threshold, I would not entertain much hope on that front. I would suggest you enquire about appeal processes and use those processes to the full I had wondered whether the more recent Home Caring relief – which actually credits you with PRSI stamps for time out of the workforce caring for family – might be more useful to you as it would get you to the 520-stamp limit than Home Makers, which simply discounts those years of caring from your PRSI record without actually crediting you with stamps. However, the Department assures me Home Caring cannot be used to meet the 520-stamp threshold that would allow you to purchase voluntary PRSI. I also enquired what would happen if you did in good faith take the client eligibility service section up on its offer of buying the PRSI cover even though, technically, you are not entitled. Would they honour it, I asked? And if not, when would you get the money you had paid in good faith back? The Department tells me that when people apply and meet the eligibility requirements, they will be included in a billing cycle after which they have 12 months to accept. Even though you have been given that 12 month notice, I can only assume from this that when you formally apply to take up your rights as offered, the Department will come back and say that, regretfully, you do not meet the criteria. However, it is so messy that I wouldn't bet on it. Moving on to the nub of your query – will you be able to qualify for the lowest level of contributory State pension? Well, not on the basis of voluntary PRSI purchase, it appears. And not on the basis of your current PRSI record. However, you do have almost seven years of paid PRSI stamps and you tell me you have another seven years before you hit State pension age. If you were to work just over three of those years, you would hit the magic 520 threshold at which you would qualify for a minimum pension – in your case 25 per cent of the full rate. On the basis of today's weekly payment of €289.30, that would mean a weekly payment of €72.33. Of course, you could work the whole seven years in which case you would get closer to €100 a week. You must apply within 60 months (five years) of the end of the last year in which you made either paid contributions or are covered by Home Making relief I know from talking to you that you are totally confused and frustrated at this point over the inability to get a simple straightforward yes or no answer from the Department. While, understandably, they are not prepared to discuss individual cases with me – and I would not in any case be able to give them your details without your express permission – they do tell me that they are happy to look into this matter for you. I have now passed a number on to you which, hopefully, will put the issue to rest once and for all. Given the hopeless confusion that has reigned here, whatever happens I would suggest you enquire about appeal processes and use those processes to the full, outlining the catalogue of mixed messages you have received over the past year. It may get you nowhere, but at least that is no worse than where you now stand. Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to with a contact phone number. This column is a reader service and is not intended to replace professional advice
Japan Times
28-05-2025
- Business
- Japan Times
WHO restructures and cuts budget after U.S. withdrawal
The World Health Organization tried to stabilize its finances at its annual assembly which ended on Tuesday, but still remains well short of reaching its already reduced target. Hit by the withdrawal of its biggest donor, the United States, the WHO trimmed its already smaller 2026-2027 budget from $5.3 billion to $4.2 billion. The U.N. health agency's program budget for 2024-2025 was $6.8 billion. The slimmer budget plan was approved during the World Health Assembly, which serves as the WHO's decision-making body. But a funding gap of some $1.7 billion remains. How WHO funding works WHO budgets run in two-year cycles. Founded in 1948, the agency initially received all its funding through "assessed contributions": nations' membership fees calculated according to wealth and population. However, the WHO became increasingly reliant on "voluntary contributions," which only go toward outcomes specified by the donor. By the 2020-2021 cycle, assessed contributions represented only 16% of the approved program budget. And the organization had long been over-reliant on voluntary funding from a few major donors. 2026-2027 budget In 2022, member states agreed to increase their assessed contributions to represent 50% of the WHO's core budget by the 2030-2031 cycle at the latest — giving the WHO more stable, flexible and predictable income streams. They increased membership fees by 20% as part of the 2024-2025 budget. At this year's assembly, countries approved another 20% increase in membership fees, which should represent an additional $90 million in revenue per year. They also endorsed the WHO's 2026-2027 budget of $4.2 billion. "Your approval of the next increase in assessed contributions was a strong vote of confidence in your WHO at this critical time," the organization's chief Tedros Adhanom Ghebreyesus said Tuesday in closing the assembly. Most of that money is already assured. "We have now secured 60% of our base budget for 2026-2027; a remarkable result in today's financial climate," said Hanan Balkhy, the WHO's Eastern Mediterranean regional director. But that means the agency is still $1.7 billion short, despite the reduced budget. Pledges At a pledging event last week, donors put in an additional $210 million for the 2025-2028 investment round, supporting the WHO's base budget. That included $80 million from Switzerland, $57 million from the Novo Nordisk Foundation, $13.5 million from Sweden and $6 million from Qatar. "In a challenging climate for global health, these funds will help us to preserve and extend our life-saving work," said Tedros. United States Upon returning to office in January, U.S. President Donald Trump started the one-year process for leaving the WHO, and had frozen virtually all U.S. foreign aid. The United States was traditionally the WHO's largest donor. Washington's departure, and its refusal to pay its membership fees for 2024 and 2025, has left the WHO reeling financially. Washington did not attend the World Health Assembly. However, U.S. Health Secretary Robert F. Kennedy Jr. sent a video message in which he branded the organization as bloated and moribund, and urged other countries to "consider joining us" in creating new institutions instead. Kennedy said the U.N. agency was under undue influence from China, gender ideology and the pharmaceutical industry. Reorganization The budget cuts have forced the WHO to reorganize. It is reducing its executive management team from 14 to seven due to the dramatic U.S. funding cuts. The number of departments is being reduced from 76 to 34. The WHO has not yet announced any large-scale layoffs, unlike other U.N. agencies.
