The £259,279.80 Decision: Don't Leave Your UK State Pension Behind

Baron Barnett

17 Sep 2025 — 6 min read

Did you know you still get the UK new state pension every year even if you live abroad?

If you’re a Brit who now lives down under (or anywhere else abroad for that matter) I have some good news for you. All those years working hard in England, commuting in the rain and cold, fighting for the bus have a silver lining. Your UK new State Pension will still be paid to you every single year. Who said you can't have your cake and eat it too (especially if that cake is a stable income stream)? Back of the net!

What is the UK new State Pension and why should I care?

So, you've swapped a proper cuppa for a flat white. Good on ya! But don't forget about your future self.

Currently, the full new State Pension stands at a rather respectable £230.25 a week. That's about £11,973 a year. Or, in Aussie dollars, roughly AUD $22,748.70 per year (based on a casual £1 = AUD $1.90 exchange rate). Not too bad right?

You can start claiming this little pot of gold when you hit State Pension age, which is currently 66. The pension will pay you a yearly income come rain or shine, well until you pop your clogs that is.

Note, I mentioned income, this means you will be taxed on this as income by the Australian tax office.

Hold on, what’s the catch?

As they say, there’s no such thing as free lunch, but in this case the lunch is really cheap and it’s a buffet you can help yourself to as many times as you like once you’ve got your big plate.

Get your big plate and enjoy the retirement feast

In other words you make the National Insurance (NI) contribution once and in return you get a pension payment every year from retirement age until you cark it. As a tax paying UK citizen you’re entitled to the state pension, so don’t forgo it.

To qualify for the full amount you need 35 years of National Insurance (NI) contributions. Plus you need at least 10 years worth to get anything at all.

The good news is that you can make voluntary NI contributions for the years where you are not working in the UK and even for previous years (but only going back six years).

Let’s use an example to explain how this works:

Emily's Path to a Full UK State Pension

Let's check out Emily's situation. She's 40, a British citizen, and worked in the UK for 12 years, getting those all-important National Insurance (NI) contributions. Five years ago, at 35, she moved to Australia and loves it there! She's planning to stay put but still wants that full UK State Pension when she's old enough.

Emily's Current Status:

Age: 40
NI Contributions so far: 12 years
Years needed for a full pension: 35 years
Years left to contribute: 35 - 12 = 23 years

Emily's Game Plan to Fill the Gap:

To hit that 35-year mark, Emily needs to make voluntary NI contributions for 23 more years. Since she's living abroad, she'll use form CF83 (online) to apply for Class 2 National Insurance contributions.

Let's Talk Money (based on 2024/2025 rates - just for an idea):

Annual Class 2 NI contribution: £179.40
Total years to contribute: 23 years
Total cost for Emily: 23 years * £179.40/year = £4,126.20

What does this £4,126 buy Emily?

By consistently paying these voluntary contributions for 23 years, Emily will lock in her entitlement to the full new State Pension club and as we will see, this could mean a significant boost to her retirement income!

As we saw above the full new State Pension is currently about £11,973

If Emily didn't make these extra contributions, she would only have 12 qualifying years, meaning a much smaller pension. For example, if the full pension is based on 35 years, 12 years would only give her 12/35ths of the full amount, she'd only get roughly £4105 per year (12/35 * £11,973).

What is the Overall Payoff?

To illustrate the total Emily receives from retirement age to the time of her death, let's incorporate the average female life expectancy.

Assumptions

UK State Pension Age: Let's assume Emily's State Pension age is 67 (current projection for those born in 1985).
Average Female Life Expectancy: According to the Office for National Statistics (ONS), the average female life expectancy in the UK for someone born in 1985 is approximately 89 years.

Calculations

Years Emily Receives Pension (If she pays voluntary contributions): 89 (life expectancy) - 67 (retirement age) = 22 years
Total Pension Received (Voluntary Contributions): 22 years * £11,973/year = £263,406
Net Benefit (Voluntary Contributions): £263,406 (total pension) - £4,126.20 (total cost) = £259,279.80
Total Pension Received (No Voluntary Contributions): 22 years * £4,105/year = £90,310

Comparing With and Without Voluntary NI Contributions

	With Voluntary Contributions	Without Voluntary Contributions
Total Pension Received (Lifetime)	£263,406	£90,310
Net Benefit (after contributions)	£259,279.80	£90,310

The Difference

By making the voluntary Class 2 NI contributions, Emily's total lifetime pension income, based on average female life expectancy, would be much much higher. She would receive an additional:

£168,969.8

(£259,279.80 - £90,310)

That’s a big wodge of cash to help Emily enjoy her retirement compared to if she hadn't made those contributions.This shows a fantastic return on her investment in securing a full UK State Pension. Well done Emily.

Quiz time

Please choose your answer:

Yes please, I want more money when I’m old
No, I want to scrape by living on weetbix and water

If Yes - see next section

If No - do nothing and enjoy your weetbix (Aldi has the cheapest by the way)

I’m in, what do I do?

OK, good choice, here’s what you do next:

Step 1 - Check you UK state pension forecast, see https://www.gov.uk/check-state-pension

Step 2 - Check your NI contributions, see https://www.gov.uk/check-national-insurance-record

Step 3 - Apply to make voluntary NI contributions when abroad. You can now submit this online, see https://www.gov.uk/guidance/apply-to-pay-voluntary-national-insurance-contributions-when-abroad-cf83

Step 4 - Profit

Step 5 - Ditch the pints of VB for Chandon

Feedback

I’m going through this exact process of applying to make voluntary contributions and I’ll post here on my progress. Let me know how you get on and hopefully we can make this process as smooth and simple as possible for all British expats to receive their New State Pension entitlements.

Disclaimer

The figures used in these calculations are indicative only and may not be accurate.
The information presented here is general in nature and does not constitute personal financial advice.
This information is a summary of the rules based on publicly available UK government and financial guidance. The rules can be complex and are subject to change. Always consult the official GOV.UK website or contact HMRC directly for the most up-to-date and specific advice for your situation.
Figures do not take into account indexation on the pension income up to retirement age
Figures do not take into account increasing cost of type 2 NI contributions
Consider if it's worth it. Paying voluntary contributions isn't always the right choice. It may not increase your State Pension if you already have enough qualifying years to get the full amount (currently 35 years for the new State Pension). You can get a State Pension forecast to see if paying would benefit you.
Get professional advice. For complex situations, it is highly recommended to seek advice from a financial advisor or a pension specialist to determine if making voluntary contributions is the right financial decision for you.
Voluntary contributions are generally not refundable. This is a key point to consider before making a payment.

Heads Up for Emily

Applying is Key: She needs to submit CF83 online form to HMRC to pay voluntary NI from abroad.
Don't Miss Payments: Once approved, she'll need to keep up with those annual Class 2 contributions.
Rates Can Change: The Class 2 NI rate might go up or down in the future, so keep an eye on government updates.
Pension Age Might Shift: The State Pension age could also change, affecting how long she receives her pension.
Life Happens: This example assumes Emily stays in Australia and doesn't return to work in the UK. She should definitely review her situation and financial plans regularly!