Poles paying UK national insurance in hope of a big pension

Published on Friday 27 November 2009 21:39

THOUSANDS of Polish small business owners are opting to pay their national insurance contributions in the UK instead of Poland in the hope of securing a larger pension, the country's labour ministry has revealed.

The ministry said large numbers of self-employed people and small-business owners such as taxi drivers and hairdressers were closing their accounts with the Polish state insurance company and beginning to make contributions in Britain.

A key motive, the ministry said, is the desire to get a bigger pension than the Polish one, which can be as little as 130 a month. But a British pension might be hard to get.

"This is a short-sighted calculation," said Jolanta Fedek from the Polish labour ministry.

"An entrepreneur paying the minimum contribution abroad will not generate enough for a pension. And they won't have a domestic one as they will have accumulated nothing in Poland."

Another reason for taking the British option is the high level of social insurance contributions people have to pay in Poland that can amount to more than 180 per month for a self-employed person.

While many of those who opt for Britain may have registered for national insurance while working in the UK at one point, the ministry has warned of unscrupulous firms offering to form front companies through which national insurance contributions are channelled.

Some of the firms, which make money by charging a fee, claim that by paying 10 a month a person could get eventually get a monthly pension worth 384.

HM Revenue & Customs has warned that using a fictitious company as means of gaining access to national insurance benefit is illegal.