Potential National Insurance Contribution actions for internationally mobile employees or their employers

From April 2026, International Mobile Employees (IMEs) will no longer be able to pay Class 2 NICs (at a rate of only £3.50 per week for the 2025/26 tax year) to maintain their NIC ‘history’ during periods spent overseas. Instead, IMEs will:

1. Be obliged to contribute Class 3 NICs (£17.75 per week in 2025/26), if they wish to continue accruing an NIC history and:
2. There are now much tighter ‘eligibility criteria’ for these voluntary contributions and will be tightened so that in future individuals will need to have lived in the UK for 10 consecutive years (or have paid 10 qualifying years of NICs), if they wish to make Class 3 NICs in future years, though there are some ‘grandfathering’ options for those who have been paying class 2 NICs previously and wouldn’t meet the new 10 year condition

The grandfathering provisions

For those individuals who are presently living overseas and who do not meet the new eligibility criteria – i.e. re 10 years of continual UK residence or 10 years of qualifying NICs but have had at least three years of continual residence or qualifying NIC contributions (i.e. they meet the old rules) – the new rules do allow a potential ‘easement’ which will allow individuals to continue making voluntary NICs (Class 3) from April 2026 onwards. However, they will need to meet three key conditions, namely:

• They apply to pay voluntary NICs for the 2024/25 or 2025/26 UK tax years before the end of the 2025/26 tax year (so by midnight on 5 April 2026);
• They pay these contributions in the 2026/27 UK tax year; and
• They also arrange to pay Class 3 NICs before the start of the 2027/28 UK tax year

The above conditions mean that individuals in this position must take clear steps to protect their NIC histories before 6 April 2026 if they wish to continue making voluntary contributions thereafter.

Other clarifications from the recent HMRC updates on the new NIC rules

Additional clarifications that come out of the updated HMRC guidance include:

• People who are currently overseas and paying class 2 NICs will receive their final class 2 bills in May 2026 (if they have been paying these as an annual payment) or in July 2026 (where the monies have been collected via direct debit);
• It appears that those paying class 2 NICs currently will need to make a new application to register for class 3 NICs in the 2026/27 tax year; and
• HMRC should write to these individuals presently paying class 2 NICs in July 2026 to explain the new application process

Summary

Overall, whilst the new voluntary NIC rules represent a significant increase in costs for those contributing (albeit still potentially being very reasonable when all things are considered), perhaps the key takeaway for those individuals who might have been planning to make voluntary contributions whilst overseas but who haven’t yet registered for class 2 contributions is that they could need to do this before 6 April 2026, to protect their longer-term position. This is clearly a very tight window and therefore requires immediate attention.

It should also be noted that whilst voluntary NICs are officially always paid by an individual, many UK employers have traditionally made these contributions on behalf of their employees, to help ensure that their IMEs are ‘protected’ from a UK state pension accrual perspective. Employers in this situation, therefore, should ensure that all eligible employees do get proactively registered by the deadlines given above.

Would you like to know more?

If you have any questions about the above or would like to discuss your specific circumstance, please get in touch with your usual Blick Rothenberg contact or Robert Salter using the form below.