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The government has announced changes to the existing voluntary national insurance contributions (VNICs) framework. The primary goal is to prevent individuals with a limited connection to the UK from accruing UK state pension entitlement at a lower cost while residing abroad. To achieve this, access to the cheapest Class 2 VNICs will be removed for individuals working outside the UK from April 2026. In addition, the initial residency or contributions requirement to be eligible to pay VNICs whilst outside the UK will be increased to ten years. Alongside these immediate adjustments, the government will launch a broader review of VNICs.
These changes will primarily impact UK expatriates and individuals living or working outside the UK who are currently making, or planning to make, VNICs to secure or enhance their UK state pension. Those with limited previous connection to the UK, who previously benefited from the lower Class 2 rates, will likely experience the most significant change. The increased ten-year residence or contributions requirement will also affect new applicants for VNICs who have not met this threshold.
Note: the changes do not affect those paying VNICs for time abroad before 6 April 2026.
The government intends to implement these changes via secondary legislation to be effective from 6 April 2026 and to launch a wider review of VNICs with a call for evidence expected in the new year. HMRC has also indicated that they will write to individuals affected by these changes from July 2026.
These changes will have an impact on some UK citizens living abroad who make VNICs to maintain their UK state pension entitlement. The removal of Class 2 VNICs for overseas individuals means that those affected will likely face higher costs to continue building their UK state pension. The increase in the initial residence or contributions requirement to ten years is noteworthy, although less likely to impact those with established connections to the UK.
Individuals potentially affected by these changes may wish to review their national insurance contributions records and consider their options for future contributions.