Buggered if I know…

Jeesh! I haven’t been employed, or resident, in the UK since Nov 2006. I advised Her Majesty’s Revenue and Customs service (HMRC) of this during 2007 - in fact I received a tax refund sometime mid-year (because I hadn’t work the whole year in the UK hence was over taxed).

Today I received a letter (posted from Sweden, no wonder Royal Mail is going broke!) from HMRC advising me that I have a National Insurance Contribution (NIC) shortfall for the financial year April 2005-April 2006 of £382.20… Their concern (sic) is that if I do not pay the shortfall that tax year won’t count toward my 30 years of NIC payment qualification required to receive a full state pension.  Apparently I have 7 years of qualifying service so far - which, in itself, is damned interesting - given I only lived in the UK for 5 years, and at most, was making NIC payments for 4!

And I’m just not sure why its taken them a full 19 months to figure this out…

What’s even more curious is, that if I read the information correctly, I will be entitled to a 4/30th’s of a state pension from the UK government when I reach retirement age… even though I haven’t lived or worked there for more than 20 years by that time…  well all gifts gratefully received but…

I honestly can’t quite see how a country like the UK can keep incurring liabilities like this for folks, like me, who were ‘passing through’ and just working in the UK for the experience for a few years.

The reason I say this is simple - using the UK State Pension site I estimate I would be entitled to £605.28/year (basic £87.30/week = £4539.60/year X 4/30th’s = £605.28/year) in today’s money - that’s about A$1400. State pensions are indexed so in 25 years time it’ll have about the same buying power as £600 has today.  Is this enough to bother keeping all this paper work, fill out a few forms and claim a benefit in 25 years - you bettcha!

Do I think it right that the UK taxpayer carry this burden of paying me a £600 pension every year from age 68 (the state pension age by the time I get there) until I die…

Buggered if I know…