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Re: U.K. Class 2 National Insurance to be abolished
Posted: Wed Nov 22, 2023 9:33 pm
by Wales4rugbyWC23
Roger Van Zant wrote: ↑Wed Nov 22, 2023 3:19 pm
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!
The British state pension is far from funded, very much run of as pay as you go scheme. Agree it is better than Japanese pension, in value terms.
Re: U.K. Class 2 National Insurance to be abolished
Posted: Wed Nov 22, 2023 9:50 pm
by Beaglehound
From UK government website:
The weekly Class 2 NICs – the flat rate compulsory charge which is currently £3.45 paid by self-employed people earning more than £12,570 - will effectively be abolished, with no-one required to pay from April 2024. Access to contributory benefits will be maintained and those currently paying voluntarily will still be able to do so at the same rate.
Will need to wait for more detail but sounds promising.
Re: U.K. Class 2 National Insurance to be abolished
Posted: Wed Nov 22, 2023 10:50 pm
by goodandbadjapan
Beaglehound wrote: ↑Wed Nov 22, 2023 9:50 pm
From UK government website:
The weekly Class 2 NICs – the flat rate compulsory charge which is currently £3.45 paid by self-employed people earning more than £12,570 - will effectively be abolished, with no-one required to pay from April 2024. Access to contributory benefits will be maintained and those currently paying voluntarily will still be able to do so at the same rate.
Will need to wait for more detail but sounds promising.
Yes, that does sound hopeful. I saw this on BBC: 'self employed people will no longer have to pay a separate category of NI called Class 2 contributions.'
The
'have to' could be important, as none of us
have to pay anything. So I am trying to be positive and hoping voluntary contributions might not be affected!
BBC also says of the non-requirement for self-employed people to pay Class 2 that this will save self -employed people 192 pounds a a year 'without damaging their NI contributions record or benefits entitlement.'
How does that work, then? You stop paying but don't lose out? Seems odd.
Re: U.K. Class 2 National Insurance to be abolished
Posted: Wed Nov 22, 2023 11:35 pm
by northSaver
Beaglehound wrote: ↑Wed Nov 22, 2023 9:50 pm
Will need to wait for more detail but sounds promising.
Yes, I've just found this on
https://www.gov.uk/government/publicati ... -factsheet:
"Those with profits under £6,725 and others who pay Class 2 NICs voluntarily to get access to contributory benefits including the State Pension, will continue to be able to do so. The weekly rate they pay will be frozen at £3.45 for 2024-25, rather than rising by CPI to £3.70."
And in the section
"0.5 Key National Insurance Rates and Thresholds from 6 April 2024":
"Class 2 Rate (for those paying voluntarily) £3.45 (per week)"
Very good news for expats. And the 8.5% annual pension increase is amazing too
Re: U.K. Class 2 National Insurance to be abolished
Posted: Wed Nov 22, 2023 11:53 pm
by beanhead
RetroNewbie wrote: ↑Wed Nov 22, 2023 2:48 pm
Though I guess doing so would mean getting a pension forecast, and I wonder if that'd even arrive before April 2024.
This page has someone from HMRC quoting backlog timeframes of 32 weeks. That was last year.
https://community.hmrc.gov.uk/customerf ... 155d9c7b3d
Re: U.K. Class 2 National Insurance to be abolished
Posted: Thu Nov 23, 2023 4:18 am
by Roger Van Zant
Tkydon wrote: ↑Wed Nov 22, 2023 3:58 pm
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...
Sorry, but it's a fivefold increase, not four.
Re: U.K. Class 2 National Insurance to be abolished
Posted: Thu Nov 23, 2023 4:20 am
by Roger Van Zant
northSaver wrote: ↑Wed Nov 22, 2023 11:35 pm
Beaglehound wrote: ↑Wed Nov 22, 2023 9:50 pm
Will need to wait for more detail but sounds promising.
Yes, I've just found this on
https://www.gov.uk/government/publicati ... -factsheet:
"Those with profits under £6,725 and others who pay Class 2 NICs voluntarily to get access to contributory benefits including the State Pension, will continue to be able to do so. The weekly rate they pay will be frozen at £3.45 for 2024-25, rather than rising by CPI to £3.70."
And in the section
"0.5 Key National Insurance Rates and Thresholds from 6 April 2024":
"Class 2 Rate (for those paying voluntarily) £3.45 (per week)"
Very good news for expats. And the 8.5% annual pension increase is amazing too
My goodness, I sure hope you're right!
Re: U.K. Class 2 National Insurance to be abolished
Posted: Thu Nov 23, 2023 4:26 am
by adamu
Roger Van Zant wrote: ↑Thu Nov 23, 2023 4:18 am
Tkydon wrote: ↑Wed Nov 22, 2023 3:58 pm
500% of the current Class 2, so a 400% increase...
Sorry, but it's a fivefold increase, not four.
If something increases by 100% it doubles, 200% triples, etc.
Re: U.K. Class 2 National Insurance to be abolished
Posted: Thu Nov 23, 2023 4:44 am
by Roger Van Zant
adamu wrote: ↑Thu Nov 23, 2023 4:26 am
Roger Van Zant wrote: ↑Thu Nov 23, 2023 4:18 am
Tkydon wrote: ↑Wed Nov 22, 2023 3:58 pm
500% of the current Class 2, so a 400% increase...
Sorry, but it's a fivefold increase, not four.
If something increases by 100% it doubles, 200% triples, etc.
Oh, fair enough.
Re: U.K. Class 2 National Insurance to be abolished
Posted: Thu Nov 23, 2023 8:23 am
by Tkydon
Roger Van Zant wrote: ↑Thu Nov 23, 2023 4:18 am
Tkydon wrote: ↑Wed Nov 22, 2023 3:58 pm
Roger Van Zant wrote: ↑Wed Nov 22, 2023 3:38 pm
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...
Sorry, but it's a fivefold increase, not four.
5 x 3 = 15 but the first 1 of 5 is the original 3,
so the increase is (5-1) x 3 = 12
5-1 = 4
So the increase does not include the original 3, so is 400%...
0% Increase = 3 still
100% Increase = 6
200% Increase = 9
300% Increase = 12
400% Increase = 15