The UK New State Pension is a regular payment from the UK government that people can claim after reaching a certain age and paying enough National Insurance (NI) contributions.
The UK New State pension may be paid to anyone who is eligible regardless of where they reside. This means people residing in Australia who meet the eligibility criteria may receive a UK pension. Importantly, unlike the Australian system, the UK pension is not means-tested.
To be eligible for any kind of UK state pension, you’ll need to
- Have worked in the UK; and
- Paid National Insurance contributions (NICs) for at least 10 years.
While working in the UK, NICs are normally paid by your employer. But you don’t have to have worked in the UK for 10 years. You may be eligible to make voluntary contributions to top up gaps in your NI history, so that you are entitled to a UK part-pension.
A window of opportunity
Normally, you can only fill gaps in the past 6 years, but there is currently a window of opportunity where you can fill up to 16 years. This opportunity closes in April 2025 and reverts back to the standard 6 years.
Key things you need to know
- You’ll be eligible for a full State Pension if you’ve made National Insurance contributions for 35 years. (The pension is currently £221.20 a week, currently paid from age 67.)
- You must have at least 10 qualifying years to be eligible for any pension. (People with more than 10 years, but less than 35 years, would get a pro-rata payment.)
- If you have less than 35 qualifying years, you may be able to pay voluntary contributions to help you increase the number of qualifying years so you can receive more pension.
- You can check your National Insurance record to see how many ‘qualifying years’ you have. This can be done online here if you have sign in details, or you can fill in the form to request the information here. It’s worth noting:
- It can take up to 3 months to make a request and get a response (HMRC will generally not email you information – they will post it, or make it available online). If you wait for information by post, it may be too late to action by the 5 April 2025 deadline.
- To get information instantly online, you need a Government Gateway account. If you don’t have one already, it is a simple process to apply online, and you can verify your ID electronically using an Australia e-passport (i.e. one that contains an electronic ID chip). Once your gateway account is set up, you can download your own statement.
Is this the right course of action for you?
The UK pension system is somewhat complex and has many ‘exceptions’ to the general rules. Considering whether it’s worth topping up qualifying years to increase your potential future UK New State Pension entitlements is a very individual decision. As with all things of this nature, it is recommended that you speak with your adviser so your personal situation can be considered and you can feel confident that any decision you make is the right decision for you.