Britons living abroad will no longer be able to pay class two voluntary National Insurance contributions system, in a major crackdown on state pensions paid to overseas claimants.
Chancellor Rachel Reeves annouced the policy change in her Autumn Budget. She told the Commons: “Taxpayers’ money should not be spent on pensions for people abroad who only lived here for a couple of years and may never have paid a penny in tax.
“The Conservatives allowed thousands of people living abroad buy their way into the state pension for as little as £3.50 a week, debasing the purpose of our pension system.
“And so I will abolish access to class two voluntary national insurance contributions for people living abroad, increasing the time that someone has to live or work in Britain to 10 years and increasing the contributions they must pay.”
You typically need 35 years of National Insurance contributions to get the full new state pension, which is currently £230.25 a week, or £11,973 a year.
Labour confirmed today the triple lock will apply for next year’s state pension increase, increasing payments by 4.8 percent.
Thanks to the 4.8 percent increase, the full new state pension will rise to £241.30 a week, or £12,547.60 a year, meaning an increase of almost £575 a year.
As the costs of the state pension ever increase, there are growing concerns the triple lock will soon be unaffordable for the Treasury.
Gerard Boon, managing director of Boon Brokers, said: “It is increasingly becoming less practical and ultimately unsustainable, pushing pension income ahead of wage growth. With an ageing population, more taxpayer money will be channelled into pensions, leaving less for other public services.
“As a result, it’s only a matter of time before the Government has to reconsider how the triple lock works and review its fundamental principles. For pensioners who are struggling to cover essential costs, practical steps such as claiming Pension Credit, checking council tax reductions, and accessing energy support can all make small but meaningful differences.”