What Happens to My NI Payments When I Emigrate?
Q.
I will be moving to Australia within the next year and was wondering what happens to my national insurance payments that I have been paying.
I am a British citizen from birth and am 23. I will be moving there indefinitely and will NOT be coming back. Do I get these payments back?
A.
Conceptually, National Insurance is, as the name suggests, an insurance scheme. So, just as if you had bought theft insurance for your house but never had to claim on it because your home was never burgled, you would not expect to be given the money back, the same is true for National Insurance payments in the UK. Insurance is a hedge against uncertainty, against bad things which could happen, but often don’t. Part of what you pay for with insurance is the intangible peace of mind.
However, you may be unaware that, if you have built up an entitlement to a British pension, which you must have done to some extent if you have been paying National Insurance contributions, you can still claim that pension from outside the UK, even if you emigrate on a permanent basis and become a citizen of another country. If you have not made payments over the whole course of your life, it will be a partial pension rather than a full one. Unfortunately, for this to be possible, the minimum period of time for which you need to have contributed is 25% of your working age years, or specifically 11 years if you are male. If you are only 23, you will not have been able to reach that minimum threshold. When you move abroad, though, you do have the option of continuing to make voluntary National Insurance Contributions in Britain build up your pension entitlement here. If you did this for a few more years, you would soon reach the minimum 25% level. Then, when you eventually reached retirement age in Australia, you could claim your 25% pension from the UK.
It’s worth noting that Australia is one of those countries where the value of the British pension is not uprated in line with inflation each year, so it tends to depreciate in value over time.
If you are interested in continuing to pay National Insurance Contributions for a few years to continue building up your right to a UK pension, you should fill in form CF 83 from HMRC. The payments can be made by post, through a bank or via an agent (someone who acts for you in the UK).
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