In its 2025 Budget the government announced updates to voluntary National Insurance contributions (NICs) for time spent abroad.

From 6 April 2026, voluntary Class 2 NICs for periods spent abroad will be abolished. The reforms aim to ensure that those building entitlement to the UK state pension from outside the UK have a stronger connection to the country and contribute at a fairer rate.

Under the current system, some overseas individuals are able to pay voluntary Class 2 NICs, which are significantly cheaper than Class 3 contributions, in order to maintain their state pension entitlement. However, from the 2026/27 tax year onwards, voluntary Class 2 contributions for time spent abroad will no longer be available. Individuals wishing to maintain their National Insurance record while overseas will instead need to pay Class 3 voluntary contributions.

It is important to note that these changes do not affect voluntary contributions relating to periods before 6 April 2026. Individuals will still be able to make voluntary payments for earlier tax years under the existing rules.

Those who currently pay Class 2 contributions while abroad do not need to take immediate action. HMRC will contact affected individuals from July 2026 with further information. If payments are made by Direct Debit, the instruction should remain in place, as HMRC will collect the final Class 2 payment for the 2025/26 tax year on 10 July 2026.

Individuals who already pay Class 3 voluntary contributions from abroad will not need to reapply and can continue paying as before.

Alongside these changes, new eligibility rules will apply for individuals wishing to start paying voluntary contributions while overseas. From April 2026, new applicants to pay voluntary Class 3 NIC will generally need to demonstrate a stronger connection to the UK by either having lived in the UK continuously for at least 10 years or having paid at least 10 years of National Insurance contributions in the UK. Applications will continue to be made using form CF83.

These reforms are expected to affect UK expatriates and others living abroad who rely on voluntary contributions to maintain or improve their UK state pension entitlement. In many cases, the removal of the lower-cost Class 2 option will result in higher contribution costs for individuals overseas.

The government has also confirmed that further guidance and details on transitional arrangements will be published, alongside a wider review of the voluntary national insurance contribution system to ensure it remains fair and effective.