Retirement Planning: UK Budget 2025 – Expats No Longer Eligible for Class 2 Voluntary National Insurance Contributions

How Topping Up UK NI Records Has Supported Expats’ Retirement Plans

For many UK expatriates, Voluntary National Insurance Contributions (VNICs) have played an important role in strengthening retirement income. Although the state pension alone is insufficient for a comfortable retirement, the full amount for 2025-2026 (£230.25 per week) remains a valuable addition to broader retirement planning.

UK state pension entitlement depends on qualifying NI years. Ten years provides a reduced pro-rata amount, and 35 years secures the full pension (£230.25 per week for the 2025-2026 tax year). Until now, many expatriates have been able to pay Class 2 VNICs at a rate of £3.50 per week (2025-2026 tax year), providing a straightforward and inexpensive way to maintain or enhance their NI record. It has also been possible to backpay up to six missing years and, more recently, to fill gaps dating back to 2006.

This option has offered strong value. One extra qualifying year adds £343 to future annual pension income, increasing with inflation and paid for life. Even Class 3 contributions, at £923 for a full year, can deliver good long-term returns, while the lower Class 2 rate has been particularly advantageous. For anyone living into later retirement, the cumulative benefit will generally outweigh the upfront cost.

UK Budget 2025: Changes To Voluntary National Insurance Contributions For Expatriates

In the November 2025 Budget, Chancellor Rachel Reeves confirmed that Class 2 contributions for those living abroad will end from 6^th April 2026. The government argues that these rules allowed individuals with only limited recent UK ties to build pension rights at a rate intended for those still closely connected to the UK.

After April 2026, expatriates will no longer be able to make Class 2 payments under any circumstances. Access to Class 3 contributions will also narrow. Only those who lived in the UK for at least ten years before leaving will be able to continue topping up, a significant tightening compared with current practice.

The Budget also signalled a broader review of voluntary contributions, with a call for evidence expected in the new year, suggesting that further changes could follow.      

Advice For Expatriates Looking To Maximise UK State Pension Rights

With voluntary NI rules tightening from April 2026, expatriates who have not yet reached 35 qualifying years still have a limited window to strengthen their UK state pension record by backpaying six years and any remaining weeks of the 2025-2026 tax year. Acting sooner rather than later will be essential, as processing times are long.

Class 3 contributions, currently £17.75 per week, will remain available for eligible expatriates beyond April 2026. Whether these offer good value will vary according to individual circumstances, especially given the possibility of further reform.

If you are affected by these changes, we strongly advise making an appointment to see your financial adviser. Understanding the implications early will help you make the most of the options available while they remain open.