Expats Abroad: Class 2 National Insurance Contributions End—Class 3 Now Only Option
From 6 April 2026, self-employed expatriates and UK residents living abroad can no longer pay cheaper voluntary Class 2 National Insurance contributions. They must now use the costlier Class 3 scheme, nearly five times more expensive.
A change announced in the 2025 Budget means that, as of 6 April 2026, individuals can no longer pay voluntary Class 2 National Insurance contributions for periods abroad. Instead, anyone wishing to make contributions for time spent abroad for the tax years 2026-2027 onwards must pay voluntary Class 3 contributions.
Cost Impact
From 6 April 2026, class 2 contributions will no longer be permitted for time spent abroad. Only the more expensive Class 3 contributions will be allowed. This increases the cost of maintaining a national insurance record from £3.50 per week to £18.40 for those impacted.
Who Is Affected?
To make voluntary contributions, applicants must have either lived in the UK consecutively for 10 years or paid UK NICs for at least 10 years. Paying voluntary class 2 NICs while living abroad allows individuals to maintain their UK state pension entitlement and access certain benefits. Gaps in national insurance records can reduce future pension or eligibility for payments such as jobseeker's allowance.
Action for Expats
This change significantly affects the cost of maintaining UK National Insurance records while abroad. Over a year, the difference is substantial: Class 2 would cost roughly £182 annually, while Class 3 now costs approximately £957—a jump of £775 per year. Those who moved abroad and can no longer access the cheaper option should evaluate whether maintaining UK pension contributions remains financially worthwhile and consider the long-term impact on their state pension eligibility.
If you are a UK expatriate or self-employed and living abroad, contact HMRC or an accountant immediately to understand your contribution options and budget accordingly. The change takes effect 6 April 2026. Working years abroad without maintained contributions will reduce your eventual UK state pension entitlement.
Sources
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