At the time of writing (February 2026), if you are a UK expat living in Australia, you have been able to top up your UK State Pension entitlement by paying Class 2 National Insurance contributions (NICs).
This has always been a useful facility, as it has enabled you to increase the value of your UK State Pension, which provides a regular, guaranteed-for-life income.
However, in the UK 2025 Autumn Budget, it was announced that expat access to Class 2 NICs will be withdrawn from April 2026.
Read on to learn how this could affect you and what you need to do.
What’s being changed?
The cost of topping up your State Pension will rise in April
Class 2 voluntary NICs currently cost £3.50 a week or £182 a year (2025/26 tax year). This has made topping up your UK State Pension entitlement highly affordable and financially advantageous, given the extra State Pension you can access.
From April 2026, you will need to make voluntary Class 3 contributions, which are significantly higher at £17.75 a week, or £923 a year.
Historically, Class 2 NICs have been a cost-effective way to top up your UK State Pension if you’ve previously lived in the UK, but the increased cost could now make this prohibitively expensive.
You’ll need to have been a UK resident for at least 10 years to make voluntary National Insurance Contributions (NICs)
From April, the UK is also introducing stricter rules for people living outside the UK. This means you must have been a UK resident for at least 10 years before leaving the country in order to make voluntary contributions.
You should also be aware that you generally need 10 qualifying years of NICs to receive any of the new UK State Pension.
However, the number of years required to receive the full State Pension is more nuanced than the commonly quoted “35 years” and depends on when you were born and your previous National Insurance record.
Why this matters
The current maximum UK State Pension is £230.25 a week (£11,973 a year). From April 2026, this will increase to £241.30 each week, equivalent to £12,548 a year.
This is probably not enough income to live comfortably on, but it does give you a regular income stream in Australia. However, you should be aware that Australia does not have a reciprocal uprating agreement with the UK. This means that your State Pension will stay at the same amount you were receiving when you first moved to Australia, or first claimed it from abroad, so you will not benefit from the UK triple lock.
With a deadline of 6 April 2026 to act, you only have a limited window to consider how the increased cost of Class 2 NICs could affect you and take steps to mitigate the effect.
Here are three things you should do:
1. Check your NI record and State Pension entitlement
Before deciding on the best course of action, you can review the necessary details on the UK government website, including your NI record and the State Pension you are currently entitled to when you retire.
This will help you determine whether to make voluntary contributions.
2. Make additional NICs before the deadline
Any Class 2 contributions for periods before 6 April 2026 can still be paid under the old rules up to a maximum of the six previous years.
You will need to complete Form CF83, which is available on the government website.
You can submit this digitally and make any required payment online.
3. Start planning for future additional NICs.
If you still need to fill gaps in your NI record, make sure you understand the higher cost and new eligibility rules for Class 3 contributions.
It’s also worth seeing these changes as a prompt to conduct a detailed review of all your UK-based pension arrangements.
For example, if you plan to retire in Australia and still have private or workplace pension assets in the UK, it may be highly advantageous to transfer them to an Australian super fund, provided you are eligible.
We would normally recommend that you do this as part of a wider review of your retirement income planning, which considers all your sources of income once you have stopped working, as well as your plans and objectives.
Read more: Can you transfer your UK pension to Australia?
Why you could really benefit if you transfer your UK pension to Australia
Get in touch
As a cross-border financial advice firm with offices in both the UK and Australia, we are ideally placed to help you create a robust retirement plan and avoid any of the common pitfalls that UK expats in Australia often encounter.
If you want to discuss any of the issues you’ve read about in this article, please get in touch with us.
Please note
The value of your investment can go down as well as up, and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
This article is for information only; it does not take into account your personal objectives, financial situation, or needs.
Please do not solely rely on anything you have read in this article, and ensure that you conduct your own research to ensure any actions you may take are suitable for your circumstances.
All contents are based on our understanding of HMRC and ATO legislation, which is subject to change.