One important financial consideration you may overlook when you relocate is your UK State Pension. To ensure you’re entitled to the full benefits upon retirement, it’s essential to make sure you NI contributions are up to date.

Why NI Contributions Matter for Expats

The UK State Pension is built upon your history of National Insurance contributions. To qualify for the full state pension, you need at least 35 years of contributions. If you don’t meet this requirement, the amount you receive will be reduced. The full state pension is worth £221.20 a week in 2024-25.

Can Expats Continue to Pay National Insurance?

There are four main types (or ‘classes’) of National Insurance: Class 1 is payable by employees and employers, Class 2 is a flat rate payable by the self-employed or those working abroad (subject to conditions), Class 3 is voluntary contributions paid by people who want to complete their National Insurance record for benefit purposes, but are not otherwise liable to pay National Insurance, and Class 4, which payable on profits above a set level by the self-employed.

Expats can continue to make NI contributions, even if they are no longer working or living in the UK. These payments are known as voluntary contributions and fall under two primary categories: These are Class 2 and Class 3 contributions.

• Class 2 NI Contributions: If you’re working abroad and employed or self-employed, you may be eligible to pay Class 2 contributions, which are lower and more cost-effective. To qualify, you must have worked in the UK immediately before moving abroad.
• Class 3 NI Contributions: These contributions are typically for individuals who are not working or earning a qualifying income but want to keep their State Pension growing. Class 3 contributions are more expensive but can be paid by anyone who wants to make up missing years.

To pay Class 2 or Class 3 voluntary contributions you must have either:

• previously lived in the UK for 3 years in a row
• paid contributions or had Class 2 contributions treated as having been paid for at least 3 years

To pay Class 2 voluntary contributions both of the following must also apply:

• you worked in the UK immediately before leaving
• you’re currently working abroad (or you worked while you were abroad)

NB: Between November 2017 and April 2019, HMRC’s guidance was incorrect. It said all these conditions must be true. If you did not apply or your application was refused because of the incorrect guidance, you may be able to pay at the original rates. Explain your situation when you apply.

Checking Your NI Record

You can get a State Pension forecast from the Gov.uk website here. As well as checking your State Pension age, a forecast can tell you how much you could get and how it might be possible to increase it.

You can also keep tabs on how your entitlement to the State Pension is building by monitoring your NI contribution record, which again you can check at Gov.uk. Here you can see your history of NI credits received and any gaps in contributions or credits. It’s often possible to pay voluntary contributions to fill these gaps, either for a full year or a partial one where you have paid some NI but not enough to gain a credit.

Before making any decisions about voluntary contributions, it’s crucial to check your current National Insurance record to see how many qualifying years you already have.

You can check the following:

• How many qualifying years of NI contributions you’ve accumulated.
• Any gaps in your contribution history.
• Your estimated State Pension based on your current contributions.

You check this by logging into your personal account on the UK Government’s website, by contacting HM Revenue & Customs (HMRC).Or by using their new online tool.

A revised tool has been launched by HMRC and the Department for Work and Pensions (DWP) which allows those under state pension age to view gaps in their National Insurance (NI) record and pay for voluntary contributions online. The government has enhanced its existing ‘check your state pension forecast’ tool, which you can access via gov.uk or the HMRC app. If you have a personal tax account, you need to log in using your existing Government Gateway details; alternatively, you will be able to register to set up an account. Not everyone is able to use the tool. This includes people already getting the state pension or those looking to fill gaps from when self-employed. The same applies if you’re within four months and eight days of state pension age.

How to Make Voluntary Contributions as an Expat

Once you’ve checked your NI record and determined that you need to make voluntary contributions, the process is fairly straightforward. Here are the steps to follow:

• Contact HMRC: Notify HMRC that you’re living abroad and wish to continue contributing to your NI. You can do this online, by phone, or by writing to them directly.
• Choose Your Contribution Class: Based on your employment status abroad, decide whether to contribute as Class 2 or Class 3. Remember, Class 2 contributions are cheaper but may not always be available depending on your work situation abroad.
• Make Payments: You can make payments either monthly or quarterly, depending on your preference. Payments are typically made through direct debit, international bank transfer.
• Keep Up to Date: As your circumstances change, whether you retire, move to another country, or return to the UK, stay informed about your NI contributions and make adjustments where necessary.

Apply to Pay Voluntary National Insurance

Contact HMRC (external link) if you want to check your eligibility.

Read leaflet NI38 (external link) and fill in form CF83 (found at the back). Send it back to HMRC using the address on the form.

Benefits of Continuing NI Contributions

• Qualify for the Full State Pension: By ensuring you have at least 35 qualifying years of NI contributions, you can claim the full State Pension. If you’ve already accumulated a significant number of years, contributing as an expat helps fill any gaps to reach the full entitlement..
• Peace of Mind: Knowing that your retirement finances are secure regardless of where you live provides a sense of security and can help you plan more effectively for the future.

Will you benefit from increases to your state pension in retirement ?

Finally – It’s worth checking whether the country where you plan to retire is included on the list of countries that will receive increases in the UK state pension. In the UK, pensioners benefit from something known as the “triple lock”.

As a result of this, State Pension payments will increase during your retirement years by the greater of 2.5% price inflation or average wage growth. However, only some countries will benefit from these increases. For many of those who retire outside the UK, State Pension payments are permanently frozen at either the date the individual retired or the date that they arrived in their country of residence.

The following is a current list of countries that will not benefit from the Triple Lock.

Afghanistan; Albania; Algeria; Andorra; Angola; Anguilla; Antarctic Territories (British); Antigua; Antilles (Netherlands); Argentina; Ascension Island; Australia; Bahamas; Bahrain; Bangladesh; Barbuda; Belize; Benin; Bhutan; Bissau (Guinea); Bolivia; Botswana; Brazil; Brunei; Burkina Faso; Burma (Myanmar); Burundi; Cameroon; Canada; Cape Verde Islands; Cayman Islands; Central African Republic; Chad; Chile; China People’s Republic; Colombia; Comoro Islands; Cook Islands; Costa Rica; Cote D’Ivoire; Cuba; Democratic Republic of the Congo (Zaire); Djibouti; Dom Commonwealth (Dominica); Dominican Republic; Ecuador; Egypt; El Salvador; Equatorial Guinea; Ethiopia; Falkland Islands & Dep; Faroe Islands; Fiji; Gabon; Gambia; Ghana; Greenland; Grenada; Guatemala; Guinea; Guyana; Haiti; Honduras; Hong Kong; India; Indonesia; Iran; Iraq; Japan; Jordan; Kampuchea; Kenya; Kiribati; Kuwait; Laos; Lebanon; Lesotho; Liberia; Libya; Macau; Malagasy Republic; Malawi; Malaysia; Maldive Islands; Mali; Mauritania; Mexico; Monaco; Mongolia; Montserrat; Morocco; Mozambique; Namibia; Naura; Nepal; Nevis, St Kitts-Nevis; New Caledonia; New Zealand; Nicaragua; Niger; Nigeria; Norfolk Island; North Korea; Oman; Pakistan; Panama; Papua New Guinea; Paraguay; Peru; Principe and Sao Tome; Qatar; Republic of Armenia; Republic of Azerbaijan; Republic of Belarus; Republic of Georgia; Republic of Kazakhstan; Republic of Kyrgyzstan; Republic of Moldova; Republic of Tajikistan; Republic of the Congo; Republic of Turkmenistan; Republic of Uzbekistan; Republic of Yemen; Russian Federation; Rwanda; Sabah; San Marino; Sarawak; Saudi Arabia; Senegal; Seychelles; Sharjah; Sierra Leone; Singapore; Solomon Islands; Somalia; South Africa; South Korea; Sri Lanka; St Helena & Deps; St Lucia; St Vincents & Grenadines; Sudan; Surinam; Swaziland; Syria; Tahiti; Taiwan; Tanzania; Thailand; Togo; Tonga; Tours (Individuals on Tour); Trinidad & Tobago; Tristan Da Cunha; Tunisia; Turks & Caicos Islands; Tuvalu; Uganda; Ukraine; United Arab Emirates; Uruguay; Vanuatu; Vatican City State; Venezuela; Vietnam; Virgin Islands (British); Western Samoa; Zambia; Zimbabwe

* Provided by the Department of Work and Pensions (DWP).