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2025 UPDATE: New UK State Pension Top-Up Rules
Over recent years, eligible UK expats and Aussies that worked in the UK had been granted additional time to top up their UK State pension entitlements, with the deadline on rules impacting the amount able to be topped up was initially slated for 5 April 2023 and subsequently pushed back to 31 July 2023. The significant level of enquires received by HMRC and their ballooning turnaround times prompted them to extend the date again to 5 April 2025. There was no indication from HMRC in the lead-up to this date that it would be extended again, and now that the deadline has passed, many UK expats will find their maximum National Insurance (NI) contribution top-up amounts severely limited.
Given we’re now the other side of 5 April, here’s the state of play under the new rules, and what to do next.
Are You Eligible for the UK State Pension?
To determine if you qualify for the UK State Pension, you’ll need to assess your National Insurance record. If you have ever worked in the UK and paid National Insurance (NI) contributions, you will have an entitlement to the UK State Pension, even if you are not a UK national. To be eligible to claim a pension, you must have contributed a minimum ten years’ worth of NI contributions. If you have not reached this minimum, you can make voluntary contributions to fill any gaps, provided you have lived and worked in the UK for three continuous years.
The NI rate you pay to top up (Class 2 or Class 3) depends on a few factors – more on that below. Class 2 rates are preferable as they present a cheaper option compared to Class 3. After you top up your NI record and reach the UK State Pension age, you will receive a pension based on the number of NI contributions you have made. A maximum Basic State pension requires 35 years of contributions.
Previous UK State Pension Top-Up Rules
Previously, if eligible, you could make a one-off backdated NI contribution to cover missed years from 2006-07 onwards. By topping up your NI contributions, you made a small initial investment for a significant return once you reach the state pension age. This meant you could purchase a total of 16 years’ worth of NI contributions to fill gaps in your record ensuring you meet the minimum 10-year threshold, increasing your entitlement.
UK State Pension Top-Up Rules (as of 5 April 2025)
From 5 April, you will only be able to make voluntary backdated contributions for the past 6 years, as opposed to the previous maximum of 16. This rule change effectively reduces the amount that you can increase your entitlement or potentially render you ineligible for a UK State Pension if you have fewer than four qualifying years on your NI record.
Changes to UK State Pension Top-Up Rules
To illustrate the impact of your age and years worked in the UK on your top up eligibility and potential pension amount, we have highlighted a few key ages in the table below.
| Example 1 | Example 2 | Example 3 | Example 4 | |
|---|---|---|---|---|
| Age | 42 | 53 | 61 | State Pension age |
| Years worked in UK | 8 | 22 | 30 | 5 |
| Class 2 / Class 3 rates | Class 2 | Class 2 | Class 2 | Class 3 |
| Top up max years | 6 gap + 21 annual (£179.40 pa) | 6 gap + 7 annual (£179.40 pa) | 5 | 6 |
| Top up amount (£) | £1000 (gap years only) | £1000 (gap years only) | £900 | £5,544 |
| Yearly Pension Payment (£) | £11,973 | £11,973 | £11,973 | £3,762.94 |
To see the latest qualifying years chart (including the relative pension amount for each), please click here.
Next Steps & How We Can Assist
Navigating the UK State Pension system can be challenging, especially when eligibility and cost are affected by rule changes. If you have worked in the UK for three or more consecutive years and have not yet topped up your National Insurance record, you can still make additional contributions to maximise your UK State Pension income in retirement even though the 5 April deadline has passed.
Our colleagues at Pension Transfer Specialists can assist you in determining your eligibility for the UK State Pension, the top-up rate applicable to you, and submit the necessary information to HMRC on your behalf. Please don’t hesitate to get in touch with the PTS team on 08 9301 2200, or visit the UK State Pensions page on our website for more information.
written by:
Will Lyons
Will has 15 years industry experience working in both consultant and technical positions. Prior to becoming a qualified Financial Planner in Australia, Will worked as a pensions consultant in the UK gaining Advanced Diploma qualifications whilst working there. He has also attained an Advanced Diploma in Financial Planning and has completed the FASEA Financial Adviser Exam and Ethics qualification.
At McKinley Plowman, Will has progressed over the years from our UK Pensions Division all the way through to senior Financial Adviser and now Associate Director within the Wealth team – amassing invaluable experience and knowledge along the way.
Will is a keen cyclist and occasional triathlete that loves going out and socialising with friends.
Will is an Authorised Representative of Fortnum Private Wealth Ltd.
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