Millions of foreign residents to claim full state pension due to loophole (2025)

Millions of foreign residents to qualify for full UK state pension (Image: Getty)

Millions of foreign residents will be able to claim a full UK state pension thanks to an “insanely generous” loophole, it has emerged. Those who have worked in Britain for as little as three years can take advantage of the scheme, receiving thousands of pounds yearly for life. Former British taxpayers have until April 5 to fill up to 19 years’ worth of gaps in their National Insurance (NI) contributions.

This allows for those who worked in the UK to make voluntary payments, starting at £3,400, to plug the missing years on their NI record. This scheme was originally set to end in 2023, yet was extended twice by the Department for Work and Pensions. International press outlets have hailed the scheme “too good to be true”, with an Australian broadcaster saying it “almost sounds like a scam". Similarly, an Irish financial adviser labelled the loophole "uniquely and insanely generous” - an estimated 250,000 individuals in Ireland could qualify.

Foreign residents who worked in Britain can backdate payments of up to 19 years to qualify (Image: Getty)

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To qualify for the full state pension of £230.20 a week, pensioners need to have made 35 years of NI contributions. To be able to access any state pension, a minimum of 10 years of payments is required.

In 2016, the Government changed the state pension rules so taxpayers would need 35 qualifying years to receive the maximum payout. At the same time, a temporary scheme was introduced, allowing people to fill in any gaps by making voluntary contributions dating back to 2006.

This loophole means a foreign resident who worked in Britain for just three years can pay to top up their NI record to meet a decade's worth of tax payments.

This would entitle them to a state pension of around £3,500 for life.

Pensioners need to have made 35 years of NI contributions to qualify for the full UK state pension (Image: Getty)

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Voluntary contributions cost £907.40 per year, meaning someone missing 10 years of NI payments could make a one-time settlement of £9,074 to qualify for a yearly pension of £3,286, according to St James’s Place.

Some people will qualify for cheaper class 2 contributions where payments - backdating for up to 19 years - cost just £179.40 annually, totalling £3,408.60.

Typically, voluntary contributions are only available for the previous six years, yet for men born after April 5 1951 and women born after April 5 1953, they have until this Saturday to fill in any gaps between 2006 and 2018. However, after April 5, everyone will only be able to backdate payments for the past six years.