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U.K. Class 2 National Insurance to be abolished
Posted: Wed Nov 22, 2023 1:33 pm
by Gareth
In the Budget today in the U.K., it was announced that Class 2 will be abolished….
Re: U.K. Class 2 National Insurance to be abolished
Posted: Wed Nov 22, 2023 1:41 pm
by Roger Van Zant
Gareth wrote: ↑Wed Nov 22, 2023 1:33 pm
In the Budget today in the U.K., it was announced that Class 2 will be abolished….
Damn.
Can't believe they let us expats get away with it for so long, to be honest....
I wonder how much we'll be looking at per month going forward?
Also, I bet HMRC make us all reapply from scratch again, as they'll want to means-test it....oh, the joy!
From the BBC website:
"The state pension will increase by 8.5% from April 2024 to £221.20 a week, as the government honours the triple lock."
I guess the 8.5% increase is good, but yeah, a bit worried about how much monthly premiums will have to rise.
Re: U.K. Class 2 National Insurance to be abolished
Posted: Wed Nov 22, 2023 1:49 pm
by Roger Van Zant
Also, from the BBC:
Class 2 National Insurance paid by self-employed to be abolished.
"We are abolishing Class 2 National Insurance altogether, saving the average self-employed person £192 a year," Hunt says.
So he's abolishing something which enables a self-employed person to get a state pension in the future?
I'm confused.
They'll save 192 quid per year, but what about people like us abroad who actually
want to make Class 2 payments?
Hmmm.
Re: U.K. Class 2 National Insurance to be abolished
Posted: Wed Nov 22, 2023 1:55 pm
by adamu
It's always been a bizzare loophole. I'm guessing everyone will be moved to Class 3 but suppose we'll just have to wait and see.
Re: U.K. Class 2 National Insurance to be abolished
Posted: Wed Nov 22, 2023 2:29 pm
by IloveJapan
So does the abolition of class 2 automatically affect contributors outside the UK? I don’t know if the announcement had the ulterior motive of ensuring it isn’t cheap for people like us??? Not that there was any mention of people outside the UK, since they’d be too embarrassed to say anything, wouldn’t they? Well, class 3 contributions for a frozen state pension sounds decidedly unattractive.
By comparison, I think the Japanese system has a fair amount going for it:
1) You get a generous tax deduction which you obviously won’t receive with the UK pension
2) Your family will receive sth if you pass away before receiving anything, and possibly even after, but please do your homework as I can’t remember all the rules. By contrast, with the UK state pension changes in 2016, your families won’t get a penny if you pass away!
3) Under certain conditions, your family is protected if you can’t work due to disability or serious illness.
4) Your pension rises with inflation. NOT perfectly, I admit, but some rise is better than a frozen pension!
Re: U.K. Class 2 National Insurance to be abolished
Posted: Wed Nov 22, 2023 2:48 pm
by RetroNewbie
Is this abolition from April 2024?
Is it worth looking into back-paying any class 2 payments for any gaps since 2006 asap? On the basis that paying years at class3 rates is a lot more expensive than at class2 rates.
Though I guess doing so would mean getting a pension forecast, and I wonder if that'd even arrive before April 2024.
I was literally in the middle of filling out the form to pay class2 contributions by direct debit when I saw this news. (due to forced UK bank account change)
Re: U.K. Class 2 National Insurance to be abolished
Posted: Wed Nov 22, 2023 3:19 pm
by Roger Van Zant
IloveJapan wrote: ↑Wed Nov 22, 2023 2:29 pm
So does the abolition of class 2 automatically affect contributors outside the UK? I don’t know if the announcement had the ulterior motive of ensuring it isn’t cheap for people like us??? Not that there was any mention of people outside the UK, since they’d be too embarrassed to say anything, wouldn’t they? Well, class 3 contributions for a frozen state pension sounds decidedly unattractive.
By comparison, I think the Japanese system has a fair amount going for it:
1) You get a generous tax deduction which you obviously won’t receive with the UK pension
2) Your family will receive sth if you pass away before receiving anything, and possibly even after, but please do your homework as I can’t remember all the rules. By contrast, with the UK state pension changes in 2016, your families won’t get a penny if you pass away!
3) Under certain conditions, your family is protected if you can’t work due to disability or serious illness.
4) Your pension rises with inflation. NOT perfectly, I admit, but some rise is better than a frozen pension!
Class 3 for even a frozen state pension is not that bad, really.
It's only frozen once you actually start claiming it. And until then, UK inflation and the subsequent pension rises will far outstrip any future increases in the Japanese pension. The Japanese pension is still pretty piss-poor compared to even a Class 3-funded UK pension.
Also, according to the news yesterday, soon you will require 45 years for a full Japanese pension, up from the current 40!
I sure plan to backpay any missing years at the Class 2 rates ASAP!
It wasn't a priority until today as I was on track to have 34 years paid in at Class 2 rates by retirement age....ho hum!
Re: U.K. Class 2 National Insurance to be abolished
Posted: Wed Nov 22, 2023 3:22 pm
by Tkydon
The rates are:
£3.15 a week for Class 2.
£15.85 a week for Class 3.
Re: U.K. Class 2 National Insurance to be abolished
Posted: Wed Nov 22, 2023 3:38 pm
by Roger Van Zant
Tkydon wrote: ↑Wed Nov 22, 2023 3:22 pm
The rates are:
£3.15 a week for Class 2.
£15.85 a week for Class 3.
Thanks for this.
So a 500% increase in how much I’ll need to send to the UK each month going forward….damn!
Re: U.K. Class 2 National Insurance to be abolished
Posted: Wed Nov 22, 2023 3:58 pm
by Tkydon
Roger Van Zant wrote: ↑Wed Nov 22, 2023 3:38 pm
Tkydon wrote: ↑Wed Nov 22, 2023 3:22 pm
The rates are:
£3.15 a week for Class 2.
£15.85 a week for Class 3.
Thanks for this.
So a 500% increase in how much I’ll need to send to the UK each month going forward….damn!
500% of the current Class 2, so a 400% increase...