Originally Posted by obgyn65
Is it worth carrying on with UK national insurance contributions? I have 16 years of NI contributions towards my UK pension. I saw on the news that the UK is going to implement a GBP 140 per week flat rate pension for those who have 30 years of NI contributions.
Is anyone continuing paying in while living in the US ? Class 2 contributions are not expensive, but I am wondering what the implications on SS benefits will be (ie. Windfall Elimination Provision, double taxation, etc.).
Thank you for letting me know.
Consensus seems to be yes, especially if you're only paying Class 2 contributions. But, it's definitely a personal choice. The current benefit is £102.15/week ($163.44 at 1.60). This would convert to £54.48/week ($87.17) for 16 years of contributions. You now only need 30 years of contributions to qualify for the full amount.
The talk of it increasing to £140/week ($224) is only a target right now, and is not an action in place (in my understanding). The UK State Pension will never come close to US Social Security (debateable, depending on the future of both) in the size of benefits, but it's a tidy sum to have for occasional use.
Yes, it will result in reduced US Social Security benefits. It is WEPed. This is why it becomes a personal choice. Varying exchange rates on foreign income means it's rarely the same amount, month to month, if you live in the US. It brings with it some tax issues/possible reporting as well.
Further reading can be found at:
State Pensions - an introduction : Directgov - Pensions and retirement planning