Axing The "Ex"

[Wally]

You can only go back 6 years I think in terms of paying to catch up. So let's say you had 7 years from when you were in the UK (it should be on your national insurance record), pay back 6 years as a lumpsum, and pay for the next 15 years (assuming you are 52) you will achieve 28 years, entitling you to 28\35 of the full pension at age 67.
All details are on gov.uk.
Of course if you are not planning to live past 67 then there isn't much point!

I had about 23 years of pension contributions in the UK through NI (National Insurance) before I came to Indonesia. I continued the contributions voluntarily, which was not very expensive, and became entitled eventually to a full peinsion. I deferred the pension for almost 10 years and now get almost a double pension (over £1,300 per month). This does not rise annually because I am non-resident, but it is also not taxed.

 

[pantaiema]

I had about 23 years of pension contributions in the UK through NI (National Insurance) before I came to Indonesia. I continued the contributions voluntarily, which was not very expensive, and became entitled eventually to a full pension. I deferred the pension for almost 10 years and now get almost a double pension (over £1,300 per month). This does not rise annually because I am non-resident, but it is also not taxed.

I understand in the UK most people will start getting the state pension at the age of 67yo nowadays.
For £1,300 per month this must be for a couples and/or state + Private/personal pension Combined ?
The full new State Pension in the UK based on 35 qualifying years is £185.15 per week or £740.60 per four weeks.

If you are still a few years away from the state pension entitlement, but you already stop working, and now living in Indonesia, Is it still possible to contribute to your NI National Insurance to increase your qualifying years up to the age of 67?
If there is any link leading to this information, it will be very much appreciated.

 

[Wally]

I understand in the UK most people will start getting the state pension at the age of 67yo nowadays.
For £1,300 per month this must be for a couples and/or state + Private/personal pension Combined ?
The full new State Pension in the UK based on 35 qualifying years is £185.15 per week or £740.60 per four weeks.

If you are still a few years away from the state pension entitlement, but you already stop working, and now living in Indonesia, Is it still possible to contribute to your NI National Insurance to increase your qualifying years up to the age of 67?
If there is any link leading to this information, it will be very much appreciated.

I could have drawn my pension at 65 years old but deferred it for almost 10 years as I was still working and didn't need the money. At that time the pension rose by 1% for every 5 weeks it was deferred. So deferring for 10 years doubled my pension. The rules have changed for pensions due after 2016 (I think). The pension only goes up about 0.5% for each 5 weeks of deferment.
I paid voluntary contributions, which were about £30 per month. I actually paid more than 35 years, as I didn't cancel payments when I should.
You can pay voluntary contributions for a limited number of years. Whether you are working doesn't matter. But your age might. Here is a link to the UK government website: https://www.gov.uk/voluntary-national-insurance-contributions/deadlines

 

[Helpful Herbert]

I had about 23 years of pension contributions in the UK through NI (National Insurance) before I came to Indonesia. I continued the contributions voluntarily, which was not very expensive, and became entitled eventually to a full peinsion. I deferred the pension for almost 10 years and now get almost a double pension (over £1,300 per month). This does not rise annually because I am non-resident, but it is also not taxed.

Out of interest, how do they check you are still alive? I'm sure there must be families who might prefer to keep picking up the pension indefinitely!

 

[jstar]

How do they check you’re still alive

The Dutch have a Social Insurance organisation which is responsible for the governmental benefits and allowances as state pensions. They send a letter to the pensioner, often yearly, which then needs to be signed by the Netherlands embassy in the country.

In Indonesia there’s an interesting system; for the (widow’s) public servants check my mother-in-law has to start an app on her phone every couple of months. Then the camera is activated and she has to follow instructions as “move your head to the left” or “say Ah”.

 

[pantaiema]

I could have drawn my pension at 65 years old but deferred it for almost 10 years as I was still working and didn't need the money. At that time the pension rose by 1% for every 5 weeks it was deferred. So deferring for 10 years doubled my pension. The rules have changed for pensions due after 2016 (I think). The pension only goes up about 0.5% for each 5 weeks of deferment.
I paid voluntary contributions, which were about £30 per month. I actually paid more than 35 years, as I didn't cancel payments when I should.
You can pay voluntary contributions for a limited number of years. Whether you are working doesn't matter. But your age might. Here is a link to the UK government website: https://www.gov.uk/voluntary-national-insurance-contributions/deadlines

"Your State Pension increases by the equivalent of one per cent for every nine weeks you defer. This works out as just under 5.8 per cent for every 52 weeks."
https://www.nidirect.gov.uk/articles/deferring-state-pension-and-what-you-will-get

So unfortunately, it is only 5.8%/52=0.11% per week (not 0.5%) nowadays.

Imo, It will only make sense to defer it if you are still working earning a decent income, or you have a generous private pension so when topping up with the state pension, it might put you above the tax threshold.

But when you die earlier, before even taking a penny of your state pension you are just subsidising other people who never contribute to the benefit system. That chance is reasonably high when you already reach the state pension age of 67yo.

Keep in mind people who never contribute to NI (e.g have never worked), may still be eligible for the State Pension if they have received certain state benefits, for example carer's allowance or Universal Credit.

 

[Wally]

Out of interest, how do they check you are still alive? I'm sure there must be families who might prefer to keep picking up the pension indefinitely!. Not sure with

With my teachers pension I have to log in every so often to confirm I'm still alive and kicking. I'm not sure with the State Pension!

 

[Helpful Herbert]

Imo, It will only make sense to defer it if you are still working earning a decent income, or you have a generous private pension so when topping up with the state pension, it might put you above the tax threshold.

The state pension is about £10,600 and the tax threshhold is £12,570, so almost anything else you get on top of the state pension will be taxable at at least 20%.

 

[Wally]

The state pension is about £10,600 and the tax threshhold is £12,570, so almost anything else you get on top of the state pension will be taxable at at least 20%.

If you are a UK non-resident you can choose either to be taxed the same as a resident including a tax free allowance and with investment income being taxed, or alternatively to be taxed as non-resident, in which case there is no tax free allowance of £12,750 but investment income and capital gains on shares are not taxed. But in the latter case the State Pension is not taxed. There is also an agreement with the Indonesian government that UK government paid pensions will not be subject to Indonesian tax.

 

[pantaiema]

The state pension is about £10,600 and the tax threshold is £12,570, so almost anything else you get on top of the state pension will be taxable at at least 20%.

The median salary in Indonesia is 11,400,000 IDR (788 USD) or US$9,456pa

What is the average salary in Indonesia in 2023?

Find out the average salary in Indonesia, salary comparisons, and the benefits of outsourcing to the country.

www.timedoctor.com

The full State Pension in the UK will rise to £203.85 per week in April 2023, so it is about £10,600 pa. The tax threshold of £12,570 is actually still higher than more than 50% of people income actively working in Indonesia.

If you are a UK non-resident you can choose either to be taxed the same as a resident including a tax free allowance and with investment income being taxed, or alternatively to be taxed as non-resident, in which case there is no tax free allowance of £12,750 but investment income and capital gains on shares are not taxed. But in the latter case the State Pension is not taxed. There is also an agreement with the Indonesian government that UK government paid pensions will not be subject to Indonesian tax.

For people residence of Indonesia who keep their money in ISA and only need to withdraw pension of lower than £12,750 per year, given that they could choose where to be taxed it is better to choose non-residential tax. Otherwise your £12,750 per year will be taxed at @15% in Indonesia.

You could top up this state pension to reach £12,750 tax free allowance threshold by using 25% of tax free allowance from your private pension.
AFAIK, money taken out from Cash/S&S ISA is not taxable. You top up your living and accommodation expenses for anything you need above £12,750pa while living in Indonesia by taking it from your ISA, tax free.
So based on this, you could actually have £20k (say) tax free while living in Indonesia. Have I missed something here ??

 

[SamR]

Wow, I forgot I started this thread. I nearly started another thread with the same topic.

Now...for 'practical' reasons. Keeping my US assets (retirement accounts, etc) is easier with my citizenship...and although social security ain't much, but it'll be nice to receive it when the time comes vs zero pension in Indonesia.

Downsides to being WNA for me so far: The hassle of dealing with KITAP/MERP, and not to mention...costs associated with them. Also, not being able to inherit the family business (without making it a pt pma which i a hassle)... I have no intention in inheriting anyway...once my parents move on from this life, very likely I'll just cash out whatever shares/portion, get bought out whatever possible and just retire..

Thanks for this posts, it's helped to make me think about my situation. For me all that's mentioned in the quote above are part of my FOR regaining my WNI:

-I don't have any assets abroad unless you want to count a bank account. No social security etc. So I won't feel or I won't lose anything if I were to regain the WNI.

-The whole thing with Imigrasi is not so much the hassle but the game-playing part of it. Long story short, for me at least, unless you come across as knowledgeable and assertive, people (officials and agents alike) will direct you to what's good for them (1 year Kitas) when you're already qualified to apply for something else.

-The legal stuff (inheritance, owning property etc.) is something I haven't even scratched the surface of. But on a superficial level the impression I got is that the WNA status makes things more complicated. Unless I find something out that make things workable on this front, it's another reason for regaining the WNI.

I would have thought the work permit \imta would be the most annoying part, trying to find an employer willing to do that

Oddly enough I've tried applying for an office job just for the hell of it in my time here. Did well in the interviews to the point of being verbally accepted to the job in a few of the interviews but immediately crashed and burned when I disclosed my status. "Wow this is more complicated than we expected but we'll check what our options are regarding that" was the uniform response followed by radio silence. One asked "Did you say you're on a Kitas or a Kitap?" before radio silence and I'm wondering if being on a Kitap would make it easier to apply for these jobs because the employee would only have to pay for the IMTA instead for the Kitap as well.

The whole grey area/informal work/Manpower Law says you can't work without a permit but Immigration Law says you can so pay attention to that comes across to me like a temporary but not a permanent solution. If that grey area/informal work begins to grow and expand, you would want to be on more firmer ground, right?

If something significant was to happen on the legal and work fronts for WNAs, the case for regaining the WNI would significantly weaken because it's mostly the legal and economic rights that I'm concerned about now.

For the sake of balance, the arguments AGAINST regaining the WNI:

-Less hassle when going overseas (I've been on trips where I'm the only one in the group that doesn't have to worry about applying for a visa or having to show how much funds I have in my bank account).

-The "What if something like May 1998 happens again and you need to move overseas?" or "What if Indonesia collapses and you need to move overseas?" hypotheticals that have come up in conversation with family members.

 

[SamR]

The "What if something like May 1998 happens again and you need to move overseas?" or "What if Indonesia collapses and you need to move overseas?" hypotheticals that have come up in conversation with family members.

Well what do you know, had a conversation with my Dad over the weekend, talked about regaining the WNI or not and this came up as not only "a" major reason for not regaining the WNI status but "the" reason for not regaining WNI status. Wanted to say that it's just a hypothetical and "How do you know that that's going to happen?" but got checkmated with "How do you know it's not going to happen?".

 

[pantaiema]

Well what do you know, had a conversation with my Dad over the weekend, talked about regaining the WNI or not and this came up as not only "a" major reason for not regaining the WNI status but "the" reason for not regaining WNI status. Wanted to say that it's just a hypothetical and "How do you know that that's going to happen?" but got checkmated with "How do you know it's not going to happen?".

IMHO, apart from, hypothetical question whether it is going or not going to happen in the future, people could also see the current advantages and drawbacks of maintaining status quo. There are some discussions of the benefits and the drawbacks stated in this forum.

People circumstances might be different. But I think the ultimate decision making question here is that is it one way process or you could still be reversed in the future when needed. Just look at for insrance what happen in Sri Lanka, Russia, Ukraine now, but people who can still regain their former nationality will be different with the one who do not.