NI Contribution Changes for UK Expats: What’s Happening After the Budget

Written By Brett Sargent

The latest UK Budget brings important changes to National Insurance contributions, especially for people living in New Zealand. These updates affect how you top up your UK State Pension — and they matter more than most people realise.

Here’s a simple breakdown of what’s changing and what it means for you.

1. Class 2: The cheap option is being restricted

Class 2 voluntary contributions have long been the most cost-effective way for expats to build their UK State Pension — around £180 per year, compared with ~£907 for Class 3.

HMRC is now closing Class 2 for most people living overseas.

Who can still use Class 2?

A very narrow group:

  • You work abroad for a UK employer, or

  • You were self-employed in the UK immediately before leaving, and can show that your self-employment continued abroad.

Who can’t use Class 2?

If you live in New Zealand and:

  • work for a NZ employer,

  • are self-employed in NZ,

  • have been out of the UK system for several years, or

  • have no ongoing UK employment link,

…then Class 2 is no longer available.

Simple rule of thumb:

If your work and tax life are now fully in New Zealand, you will be using Class 3, not Class 2.

2. Class 3: Still available, but HMRC is tightening it

Class 3 is still open to expats, but HMRC is making the process more demanding. People are seeing:

  • More requests for evidence

  • Stricter checks on backdated years

  • Slower processing and delayed allocations

  • More letters asking for clarification

Nothing has changed in the legislation, but the practical experience has clearly tightened.

3. You can still buy past years — until April 2026

This is the key point.

HMRC has extended the top-up window until April 2026, meaning:

You can still buy missing NI years going back to 2006.

After April 2026, the rules return to normal:

You’ll only be able to buy the last 6 years.

So right now you have a one-off chance to fill historic gaps — but HMRC is clearly introducing more friction ahead of that deadline.

4. What this means if you live in New Zealand

Most people will now use Class 3

Class 2 is restricted to very specific circumstances.

Class 3 is still valuable

A full UK State Pension is worth £11,500+ per year, inflation-linked, for life — so even at a higher cost, topping up often still makes sense.

The April 2026 deadline matters

With Class 2 closing and Class 3 tightening, the next 12–18 months are important for anyone wanting to secure a full UK State Pension.

Don’t assume you can sort it later

The UK regularly adjusts pension and NI rules. Flexibility rarely increases over time.

The direction is clear:

  • Cheap Class 2 is being closed to most expats

  • Class 3 remains available but is getting more admin-heavy

  • The extended backdate window ends in April 2026

  • Future changes are unlikely to make things easier or cheaper

If you’re planning to top up your NI record, it’s better to act while the current rules still apply.

Brett Sargent
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