It comes with the payout open to those who worked in UK for just three years.
A “wild loophole” has left foreigners and expats rushing to claim £230,000 worth of state pension top-ups from the Department for Work and Pensions ( DWP ). It comes with the payout open to those who worked in UK for just three years.
Taxpayers have just days left to take advantage of a scheme allowing them to fill gaps in their National Insurance contributions dating back to 2006. It could qualify eligible individuals for a UK state pension of up to £12,000 annually.
You’ll be eligible for a full State Pension if you’ve made National Insurance contributions for 35 years. If you’ve paid in for between 10 and 35 qualifying years, you could make additional contributions to top up your pot.
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The government scheme to make voluntary National Insurance contributions going back as far as the 2006/07 tax year has been extended. It will now run until 5 April 2025.
Critics have declared it a “wild loophole for expats”. The Australian Financial Review declared: “A $480,000 opportunity for Australians who did a stint in London.” Sir Steve Webb, a former pensions minister and partner at LCP, a pensions consultancy, commented on the unusual nature of the scheme.
“The intention [behind the voluntary contribution scheme] is that you have people who work in the UK, move abroad and come back you want them to be able to fill in gaps in their record,” he said. “What’s odd is this business of going back so long.”
“Hundreds of thousands of Irish people . . . eligible for the top-up,” The Irish Times added. If you do have gaps in your NI record, you can make up the shortfall with voluntary contributions. These allow you to increase the State Pension you eventually receive, and for some people they could be an excellent investment.
Currently, Class 3 NICs cost £17.45 per week or £907.40 per year. Each year represents 1/35 of the full State Pension, and one year’s additional top-up alone could boost your weekly income by £6.32 a week or £328.64 a year (based on the 2024/25 State Pension).
However, a person with 10 years of missing contributions would be able to boost their State Pension by £3,286 per year in return for a one-off payment of £9,074 by taking advantage of the government’s offer before it runs out.
