The government has announced it will be removing access to class 2 voluntarily national insurance contributions (VNICs) for expats to prevent them from claiming the UK state pension cheaply.
The change will come into effect from 6 April next year, alongside an extension to the initial residency or contributions requirement to 10 years. The government said the move would “put an end to those living abroad being able to buy cheap access to a UK state pension.”
Expats can currently claim UK state pension by paying class 2 VNICs to fill in gaps in their record. You must generally have been employed or self-employed in the UK before leaving and have lived in the UK for at least 3 years to qualify.
But from next April, UK nationals living abroad will generally only be able to pay the more expensive class 3 VNICs to build their state pension record, and only if they meet the new 10-year initial residency/contributions requirement.
In its Budget documents, the government said: “From 6 April 2026, the government will remove access to pay voluntary Class 2 NICs abroad and increase the initial residency or contributions requirement to pay voluntary NICs outside of the UK to 10 years.
“These changes will be made via secondary legislation laid before parliament ahead of April 2026. The government will also launch a wider review of voluntary NICs with a call for evidence in the new year.”
Apparently I’m able to make some voluntary contributions as I’ve got some gaps since moving in 2020. Not sure if these are the Class 2 or Class 3 type though. How can one tell?
Given the rate of £900 rather then the class 2 rate of £180, it looks like they are class 3
The best way to check if you are eligible for the lower rate before April 2026 is to complete the CF83 form and get this sent back to HMRC as soon as possible. They will then clarify what rate you can pay to fill the gaps (Sometimes different from the rate show online!)
I can understand and appreciate the ten year qualification being applied to ‘top up’ but removing the class 2 is just the politics of envy, punishing those who have chosen (for many reasons) to live overseas.
It’s also deeply unfair on those who have been genuinely self employed. Working for yourself doesn’t offer you paid sick leave or holiday pay & is fraught with the stress of uncertainty of income. Yes, the contributions are less but even if your business is not making money they still need to be paid (& if you are making money then you start paying Class 4 proportionately too).
I’ve dodged a bullet on all this as I got my top-up sorted earlier this year. Interestingly the HMRC adviser I first spoke to about form CF83 was at great pains to make sure that my Class 2 entitlement got correctly recognised.
As Badger said very unfair on those who were/are self employed in France and not a burden on the UK healthcare or welfare system. It’s an easy tax grab although I doubt it would make much of a dent in the ever changing black hole that the government have been banging on about since they came to power.
It isn’t the politics of envy - it’s the politics of 'you chose to emigrate and benefit from living in another country, and are not contributing to the UK’. It doesn’t matter why someone chooses to live abroad - it was a choice. Whether it was fully informed is another thing.
I’m not sure why people who emigrated from the UK ever thought they have a god given right to just pay a few measley pounds in national insurance in the UK each year and get the benefit of a full UK pension years down the line. Does anyone truly believe that if someone has spent just three/ten years of their whole life the UK and were at one point employed or self-employed, the country should fund that person’s retirement as thought they’d been contributing to the country their whole life? If the same thing happened in France I’d rightly be thinking it’s a poor use of government funding, when we too are in a financial black hole.
Someone who was self-employed in the UK should have paid NI or voluntarily paid them each year as part of their self-assessment. I was self employed for over 20 years - and yes, there were years when my earnings were low, and yes, I was entitled to no sickness benefits, or holiday pay. The arguments on whether the system is fair is another thing. And being self-employed in France I’m paying into a state pension here.
Obviously everyone has their, “Yes, but … me” scenario but immigrants live under the laws and policies of their chosen country, and shouldn’t get to pick and choose benefits from their country of origin that they weren’t entitled to when they left. National insurance doesn’t cover the cost of state pensions in the UK, so well done Labour for starting to tackle some outdated practices and policies. And will it fill the black hole? Of course it won’t. But just because all of these little things in themselves make little difference, doesn’t mean they shouldn’t be doing it. If we all took that attitude we’d never bother doing anything.
I’m inclined to agree with @Steph , despite being one of those “lived and worked abroad” folks.
I spent most of my career in the UK and was fully paid up with NI (mostly from self-employment) so I do now get the full State Pension.
But while this will be unwelcome news to some, it does seem fair that those who have spent most of their time overseas should pay a reasonable amount if they want a UK state pension.
Even at £900 per year it’s still a steal. Especially if you have a female life expectancy and don’t expect to be in a high tax bracket in retirement once the UK state pension is factored in.
There are many in the UK who have contributed the minimum (currently 10 full years of NI contribution) and will expect a pension, indeed many will then apply for pension credit (as they live in the UK) and will therefore achieve almost a full pension, compared to those who have worked all their lives (35 years now to obtain a full ‘new state pension’).
Remember, most folk can only top up 6 years (normally, although that changed due to back logs). I do agree that there should be a minimum number of years resident in the UK and making contributions before those who then decide to move overseas are able to add the maximum additional 6 years. If they qualify to make Class 2 NI payments whilst living in the UK, then the overseas folk should be given the same right.
With a minimum of 10 years contributions whilst living in the UK, then the max additional of 6 years only equals 16 years, less than half of the current state pension (16/35ths). I do not think that is unreasonable to expect to receive that pension having paid in.
@PeterJ Totally agree with the fact you should receive the equivalent to what you’ve contributed. If someone paid in 10 years before emigrating they should expect their 10 years equivalent pension. As you say the rules are that people should only be able to top up NI for 6 years, but the question is why should someone who has chosen to emigrate be able to buy any years. The rules for contribution top up were set up when there was a commonwealth and people were working there; and when women stayed at home caring for children. They weren’t designed for the modern age.
@ChrisMann Similarly, having ‘earned’ a full state pension in the UK before emigrating I wouldn’t have expected to get a pension in France (especially as you have to contribute for eight more years here); but as it’s earnings based if you contribute here you do get a pension of some sort. You can’t just buy years in France which seems a much fairer system in relation to managing the country’s finances. The UK seems to be one of the only European countries where you can buy contributions to secure a full state pension. If no one else is doing it it suggests the UK are either genius or daft!
In my case I had a full 30 years contributions but the increase to needing 35 years forced my hand. I’m not denying that paying for those extra years is a very good investment.
As the full UK state pension is low compared to similar countries I have no guilt about getting it plus my (much smaller) French one.
I imagine if someone were to end up working in Europe for instance on a fixed term contract with no pension contributions, on their return to the UK they may have wanted to ‘top up’ to get their contributions back in line to be able to achieve a full pension at retirement. I am sure there have been many circumstances where people have returned to the UK after a few years away.
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