UK State Pension - Guide to Contributing Overseas

A lot of our clients have been asking recently whether it's a good idea to make voluntary contributions to top up their UK state pension entitlements. This article will explain how that works, why it's potentially useful, the process involved, but also why it is time sensitive.

The UK state pension requires at least ten qualifying years of National Insurance contributions to receive a minimum state pension, up to a maximum of 35 years for the maximum state pension. Each year on your record can increase your weekly income by up to ￡5.29 from your state pension age, which generally speaking will increase in line with inflation. The current maximum of 35 years gives you a weekly income of around ￡185.

Here's why it's time-sensitive: The UK government recently extended the deadline for catch-up contributions to the financial year 2006-2007 up to the last financial year. From August 1 onwards this year, you'll only be able to buy back the previous five or six years with missing contributions, and you won't ever be able to catch up on those missing years.

To get started, go to gov.uk and log in to their gateway portal. You might need to register with your National Insurance number and a few details. Ultimately, you're looking for your personalized state pension entitlement, which shows your record and lists each year that you've been accredited, as well as each year that is missing.

Next, print off a C F 83 form from the gov.uk website. There are instructions on how to complete the form and where to post it, but it's also advisable to include a personalized cover letter and any letters from HR confirming your years of employment. This can help you avoid having to make up missing class three financial contributions, which generally cost ￡824. Class two voluntary contributions only cost ￡164 per missing year. The government will tell you which years you're able to pay in which class of contribution, so the more proof you can provide, the better.

Once you get your answer back from the government, you can make the contribution and decide how many years you want to try and make up. Please note that this is not financial advice, but rather a call to action or a guide. I hope you find it useful, and I encourage you to look into it now to make sure you give yourself every chance to catch up.