How UK Expats Could Top Up UK National Insurance For State Pension Savings And Benefits

ProACT Partnership National Insurance

UK state pensions can always be topped up by expats, and before the tax year end to avoid missing a year of pension credit. ProACT Sam discusses UK state pension post Brexit and how to top up a UK state Pension for UK Expats.

All UK expats should continue to contribute to their UK state pension when living and working abroad and should register to start paying when they first leave the UK to avoid losing state pension income benefits at retirement age.

Working Abroad
UK National Insurance is a Tax Efficient pension savings for expats running a business Living and Working Abroad.

If you do register to pay National insurance at the time of relocating Living and Working Abroad, then you could pay under class 2 rules which offer pension and some benefit entitlements. You must have been Living and Working Abroad in the UK prior to going expat and starting class 2 contributions.

When in business as a company or sole trader remember the social insurance can be a business expense.

Living Abroad
If Living but not Working Abroad you could only pay voluntary class 3 contributions assuming you have lived in the UK for at least 3 years and worked and paid national insurance contributions.

UK citizens or tax residents with 35 years of qualifying national insurance contributions could receive a full state pension, even if this includes periods, living and working abroad.

This could be in addition to a cyprus state entitlement.

WHAT IT COSTS in 2023/4
Working Abroad and topping up national insurance for UK State Pension, by Expats costs:
Class 2 –
New UK Expats Living and Working Abroad on contract could pay Class 2 National insurance at £3.45 per week £180pa

Living Abroad but not working or when topping up in later years your national insurance for UK State Pension, by Expats costs:
Class 3 –
UK Expats wishing to catch up buying back years National insurance contributions could pay voluntary Class 3 contributions at £17.45 pw £900 per year.

What is the UK state pension?
There has been many changes to the legislation and futures changes are possible.
Changes introduced over the last 15 years included a new state pension rate for all, which is indexed linked and paid for a lifetime.

There is no widows pension. When you die benefits are lost.

The replaced the basic pension which some receive at £156. In the past this was supplemented with earnings related to additional state pensions.

Some may receive these in payments but going forward only the new state pension is available at your state retirement age.

Currently the new UK state pension paid is:
per week : £204
per year : £10600

UK State Pension is index linked, benefits if you are tax resident in the UK, or certain other countries including European EEA countries including Cyprus.

For advice and guidance contact Pro ACT Partnership at:

Pension Savings Return Paid
For each year’s national insurance contributions paid in an increase of index-linked pension benefits of £300 per year is assured.

Working Abroad paying class 2 national insurance UK expat living and working abroad generates a pension benefit with a lower contribution and could also retain benefits for the expat including maternity, bereavement and support allowances.

Living Abroad paying class 3 voluntary rate national insurance as a UK Expat, living abroad will return your capital within three years of receiving state pension and then continue to pay indexed pension for life, with no benefits allowed.

National insurance back payments for Expats

  1. New Expats leaving the UK to work should register for class 2 national insurance payments when they first start living and working abroad
  2. Existing Expats or an expat not working abroad will always pay class 3 National Insurance payments for pension top up
  3. In any tax year, an expat can top up to 7 years, the current tax year end and the previous 6 years .
  4. Before 31/07/2023 an expat could backdate an additional 10 years of contributions, these contributions are offered under special rules which close absolutely after 31/07/2023
  5. UK Expats may be able to transfer SOCIAL or national insurance contributions made abroad to or from the UK to enhance the state pension benefit
    For help and guidance how to top up state pension benefits for UK Expats contact us

ProACT Know How. For more information and guidance contact ProACT Partnership.

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