There are changes that have occurred regarding individuals being able to purchase back previous National Insurance credits to maximise and increase their current entitlement to a UK State Pension.

The new weekly UK National Insurance (voluntary) contribution rates for 2019/2020 are Class 2 – £3.00 and Class 3 – £15.00. 

The British System now allows people to pay up to thirteen years’ worth of previous National Insurance contributions, from the 2006/2007 tax years onwards as a one-off lump sum payment, in addition to purchasing annual future years to maximise and increase their current entitlement at the lower Class 2 rates.

Therefore, anyone who has a current ten-year entitlement which equates to £48.17 a week ($4,508.85 pa) may choose to purchase back thirteen previous tax years for approximately $3,656.52 which would increase their weekly pension entitlement to £110.79 ($10,370.35) pa, an increase of $5,861.50.

The cost of previous years has also increased, so if you have already obtained confirmation of the voluntary contribution rates, these would only have been valid until the 5th April 2019 and the new rates will now apply.

To be eligible, you do not need to be a UK national – If you have previously worked in the UK for three years in a row and paid three years’ worth of National Insurance contributions, then you can purchase back previous and forward credits.

It would be worthwhile taking advantage of the ability to purchase the thirteen years back which will enable securement of thirty-five years’ worth of National Insurance credits sooner and at a cheaper rate.

For further information, please contact Kensington Financial Group on (08) 9427 1777 or email  pensions@kensingtonfg.com.au