UK 2025 Autumn Budget: limit on state pension contributions to impact Britons in France
Britons abroad will need to have lived and worked in UK for 10 years and be limited to more expensive ‘class 3’ pension contributions
Class 3 contributions are five more more expensive than their class 2 counterparts
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Britons living abroad are soon to be limited on voluntary national insurance contributions they can make towards a UK state pension, after an overhaul of rules was announced as part of the UK’s 2025 Autumn Budget.
From April 2026, Britons living abroad will no longer be able to pay the cheaper class 2 voluntary national insurance contributions (voluntary NICs) and instead only have access to the more expensive class 3 variant.
They must also comply with the new extension to the initial residency or contributions requirement, which has increased from three years to 10.
Voluntary NICs let people fill gaps in their NI record caused by low-profit self-employment, time abroad, or periods without paying NI. By paying these contributions, they can increase their qualifying years and improve their eligibility - or entitlement to a higher amount - for the UK State Pension.
By paying enough voluntary NICs to cover the necessary weeks in a tax year - typically 52 weeks - a person can gain a qualifying year towards the UK state pension. You need 35 qualifying years to obtain a full UK state pension.
“Taxpayers' money should not be spent on pensions for people abroad who only lived here for a couple of years and may never have paid a penny in tax,” said UK Chancellor Rachel Reeves to the House of Commons.
More time in UK, higher payments
Currently, Britons living and working abroad – but who worked or lived in the UK for at least three years – can pay class 2 voluntary NICs at a rate of £3.50 per week.
In certain cases, people over the pension age were also able to pay class 2 voluntary NICs, but generally the option applies only to Britons under the pension age and working abroad.
However, the incoming changes will increase the rate a person was living and working in the UK to 10 years, and they will be limited to class 3 voluntary NICs.
These are more expensive, with a current weekly rate of £17.75.
Those currently eligible for class 2 payments can continue to make them until April 2026.
Further changes are possible, as the government is set to launch an enquiry into a future overhaul of the system.
Further impacts of budget
Outside of the change to voluntary NICs, there are no major elements of the budget aimed directly at Britons living abroad.
However, those with income or assets in the UK may still be impacted by certain changes, which we list below.
The UK state pension will rise by 4.8%. It means those on a basic, full, UK state pension will receive £241.30, up from £230.25 currently
‘Salary sacrifice schemes’ that allow workers to reduce taxable income earned by investing in workplace pension schemes will face national insurance tax after £2,000 of investment. Expats working for a UK employer or receiving UK income can sometimes use these schemes, based on agreement
A ‘mansion tax’ through increased council tax surcharges will see a flat-rate of £2,500 per year for properties worth more than £2 million, or £7,500 a year for those worth £5 million
Tax bands for UK income will be frozen until 2031. This means they will have remained at the 2021 rates for a decade, having been frozen by successive governments since the Covid pandemic
Taxes on properties, dividends and savings will increase by two percentage points each, and will apply to non-residents receiving UK income from these
