Did you know that you can increase and maximise your current entitlement to a UK State pension by making additional voluntary National Insurance contributions, even if you are not a UK national?  

Due to recent legislation changes, if you have less than 10 complete UK Tax years of National Insurance contributions, then you will NOT be eligible to claim the UK State pension.  

However, if you have lived in the UK for 3 or more years consecutively and have a minimum of 3 complete UK tax years of National Insurance contributions on your record then you will be eligible to pay Voluntary contributions from abroad.

Providing you increase your entitlement to a minimum of 10 years of National Insurance Contributions you will be eligible to receive the UK State Pension, which is payable from the UK Government, once you reach UK retirement age, even if you are no longer living in the UK.

The UK State Pension is a credit-based system, unlike the Australian Age Pension which is a means tested benefit provided by Centrelink.  The amount of UK pension you will receive depends on the number of National Insurance years you have been credited with.

There are pending changes to the UK State Pension which can dramatically impact the amount of pension eligible individuals can receive in retirement. 

On 31 July 2023, the ability for expats to top up and maximise their current  entitlements to the UK State pension will be significantly reduced.

You will now only have the option to purchase up to six years of previous contributions as a lump sum and then top-up each year going forward whilst you remain in Australia until you have the maximum entitlement, or reach State Pension Age, whichever is sooner to fill in the gaps in your National Insurance  record and then purchase one year at a time going forward until you reach UK State Penson age which is between 65 – 67 at present dependent on your date of birth.

If you have been thinking about making additional voluntary National Insurance (NI) contributions to increase your entitlement, now is the time to act before you potentially miss out.

Enhance Your UK State Pension

If you meet certain criteria, you may be eligible to top up and maximising your UK State Pension entitlement by paying additional voluntary National Insurance Contributions from abroad at the lower Class 2 rates.  If you do not meet the criteria to pay the lower Class 2 rates, then you can still top up by paying Class 3 contributions.

The rate that you would pay to top up (Class 2 or Class 3) depends on a few factors. Class 2 rates are preferable as they present a cheaper option compared to Class 3. Once you top up your National Insurance record when you reach UK State Pension age, you’ll receive a pension based on the number of National Insurance contributions you have made, with 35 years being required for the maximum UK State pension entitlement.

Topping up your National Insurance contributions means a nominal outlay now, for an attractive return once you reach state pension age with the maximum basic state pension slated to be increased from the weekly current rate of £185.15 by more than 10% in April 2023.

From April 2023 payments will be:

• £203.85 a week (up from £185.15) or the full, new flat-rate state pension (for those who reached state pension age after April 2016)

• £156.20 a week (up from £141.85) for the full, old basic state pension (for those who reached state pension age before April 2016)

Men and women born between 6 October, 1954 and 5 April, 1960 can start receiving their UK State Pension at the age of 66.

But for people born after this date, the state pension age is gradually increasing to 67 by 2028 and 68 by 2046. 

Our administration team will be able to assist you with this process, however, we cannot guarantee Class 2 Rates will be accepted by HM Revenue & Customs as each case is assessed on everyone’s individual circumstances.