"Retired" early, can I pay Class 2?

[gluepack]

Sorry, if this has been covered before...

I left the UK (again, as I returned to the UK from Canada in 2000) to live in an EC country about 3.5 years before my state pension age which is October this year.

I worked in the UK since 2000 but, upon leaving, I haven’t worked since and have been living off an early Canadian state pension, an early UK local government pension and savings.

A few months back I got a UK state pension forecast that showed that I could boost my state pension by paying £421.20 for 2008-9, £626.60 for 2009-10 and, I assume, the same for 2010-2011. With the recession and being a bit financially strapped, I thought that I would leave paying them for a while.

I have now decided to pay but, because I am two months late on the 2008-2009 year, I have to pay £655.20 instead (that will teach me) which means a total of £1908.40. However, the good news is that, god willing, I’ll recover that in additional pension payments within four years.

The literature that came with the forecast said “You may be able to pay cheaper voluntary Class 2 NICs” which, I have discovered, would amount to only £382.10 total for the three years.

Why are these things never explained in layman’s terms, if you can find them even, on the HMRC website? Based on the above, do I qualify? Yes, I realise that only HMRC can tell me that but any educated guesses?

[pawncob]

If you're underfunded you can pay Class 3 contributions to make up the shortfall. You can't pay class 2 unless you're self employed (but I'm sure some do).
This is a very helpful site:http://www.pensioncalculator.org/pension-information/state-pension-the-basics/

[gluepack]

Well, I guess it depends on the definition of self-employment and how easy it is to obtain that status. How does unemployment (and not receiving benefits) differ from self-employment? It is self-funding.

Thanks for the link but it isn’t a government link and it doesn’t tell me any more than I know already.
The amounts I quoted are the class 3 contributions. However, the document I received, as I stated, said “You may be able to pay cheaper voluntary Class 2 NICs”. As they have quoted me for Class 3 contributions, and knowing my circumstances, why would they suggest that and, particularly, use the term “cheaper”? Almost encouraging me to do it. I realise that it is based on a form letter but surely the implication is that I could/can change my circumstances in order to pay the cheaper contribution.

Essentially the government is telling me “You may be able to pay cheaper voluntary Class 2 NICs” and I want to know how/if I can easily take advantage of that. It would reduce my payment for the last three years by over £1500.

I have thought of one thing. I am a partner in a non-trading company set up to buy the property in the country where I am living. Does/can that constitute self-employment?

[pawncob]

Are you sure that the quote is correct:You may be able to pay cheaper voluntary Class 2 NICs.
Class 2s aren't voluntary.
A non trading partnership isn't self employment, it's joint property ownership.

[mkp]

Hi gluepack
You can find information on paying Class 2 contributions from abroad in the link below:
http://www.hmrc.gov.uk/pdfs/nico/ni38.pdf
Good luck
mkp