Pay old Class 3 contributions or just recent Class 2?

mountainsandoceans

I was hoping for some advice. I finally got a call back from DWP (as well as submitting a CF83 form) and although they accidentally cut me off and I didn't get to finish asking these questions, I recently received a letter detailing years that I can make voluntary pension payments for.

I have three years from 2022-2025 when I moved abroad where I will be able to pay Class 2. I am very happy with this and will make that payment asap.

Am I right in understanding the recent changes, if I make that payment before April 5th then I won't be affected by the changes removing Class 2 (yet) and that I will also be able to pay Class 2 for the year 2025-26?

But that from 2026-27 regardless of previous class 2 payments and job status, everyone living abroad will have to pay Class 3?

My second question is that since the system for people living abroad is changing to Class 3 only, the earlier years that I could make top up payments for have suddenly started to look more interesting again. I had previously decided that if I only needed to pay Class 2 payments while living abroad then it made no sense to top up earlier years after all.

But with the system changing, and having to pay Class 3 moving forwards, I wonder if it makes sense to top up two years specifically:

2008-2009: £412.10

2012-2013: £475.50.

I have 9 years completed payments in total and need to make another 26 years of payments to receive the full state pension. I have another 31 years until I reach state pension age.

Since the system has changed recently, I'm aware that it could change again, so I'm wondering if these years may be cheaper than what I need to pay going forward.

Thank you in advance for any recommendations you can give.

Suhusa

Have you returned from abroad? In that case the changes don't affect you. If you still live abroad you're also in the clear for the most part - you applied before the deadline to continue to pay under the old rules. As long as you pay the 2024/25 year (that's the one that counts for the rule change in your case, obviously it would make sense paying the others as well) in the 2026/27 financial year, you will be able to continue to pay for future years (at class 3 rates from 2026/27).

That's because the change from class 2 to class 3 is actually the smaller part of the rule change: To continue to pay at all you need to have 10 years of class 1, 2 or 3 contributions paid, or treated as paid, while in the UK. You only have 9. You also need to have applied for the 2024/25 or 2025/26 fy before the end of this fy (which you have), pay either of those two years in 2026/27 (which you clearly think of doing) and apply to pay Class 3 going forward also in 2026/27. You should get a letter in July that explains how to apply for Class 3.