It appears the UK government has moved the goalposts on paying national insurance contributions while abroad.

I received a letter in this morning’s post that says I can no longer pay cheaper Class 2 contributions to boost my UK state pension but can continue to pay contributions at the higher Class 3 rate under certain conditions. Is this correct?

LT

Hundreds of thousands of Irish people who worked in Britain at some point have built up a national insurance record – social security, just like our PRSI – that might entitle them to a UK state pension on retirement alongside any right to an Irish state pension.

A glitch in the UK system saw them offer people, including Irish residents who had previously worked there, the chance to buy back up to 19 years of voluntary national insurance to fill gaps in their social insurance record, which determines if and how they will receive a UK state pension, if they applied before a deadline in April last year.

And if they had been working up to leaving the UK and in the country they moved to, they were being asked to pay just £182 (€209) for each year of national insurance they purchased.

That has now changed. Not surprisingly.

I suspect the UK authorities were taken aback by demand for take-up on the offer; perhaps they had simply been targeting their own expats.

Anyway they have now changed the rules. Those changes came in last April but many people are only becoming aware of it with letters that the UK tax authorities are sending out around now.

For people like yourself, who had previously applied to buyback voluntary national insurance, you can continue to do so for this and future years. However, the cost has risen.

You can no longer purchase Class 2 contributions; instead it is Class 3 and those now cost £957 (€1,119) for the year. That figure can change each year – last year, for instance it was £907.40.

Anyone who did work for a time in the UK but did not apply for voluntary national insurance purchase before now also faces a stiffer hurdle. Where three years of work/life in the UK previously made you eligible, you now need to have worked there for 10 years or lived there for 10 consecutive years.

That is likely to rule out a lot of folk who might have qualified under the old rules. Essentially, they have missed their chance.

John Ring, of Galway-based XtraPension, which has been actively working on behalf of people looking to boost their UK national insurance record, has said that just under a quarter of its customers would meet the new requirements. But you’d imagine those numbers might be skewed by the fact that such people with more to gain would already have acted on filling in gaps in their pension record.

The letters now going out to people on the new rules warn that they need to get in touch with UK authorities by April 5th, 2027, to say they intend to take up their rights to Class 3 contributions.

After that, it warns, “the rules will change and you may need to have spent more time living and paying contributions in the UK to be eligible to pay Class 3 NICs [national insurance contributions] for periods abroad”.

I am assuming this means the 10-year threshold will kick in for anyone who takes a break now in purchasing voluntary national insurance contributions.

To be fair, the new rules bring the UK system broadly into line with what is available in the Republic for people looking to pay for voluntary PRSI cover. In this State you need a minimum of 10 years’ paid PRSI stamps to qualify to buy back additional PRSI cover voluntarily.

You are also required to act within five years of the end of the last year in which you paid PRSI here and to date any voluntary PRSI back to when you stopped paying PRSI.