New pension rules for expats draws mixed views

Jersey Consumer Council's Carl Walker said the previous scheme was "ridiculously cheap"

A decision by the UK government to tighten pension rules for expats has drawn a mixed reaction.

People who previously left the UK after three years had paid £182 a year for 35 years to qualify for a full state pension, but from April 2026 the amount is changing to £910, and people will be expected to live there for at least 10 years.

Jersey Consumer Council described the move as "unsurprising" but a tax expert in Guernsey said expats "had earned" their access to the pension.

The UK government said people building a pension outside of the UK should have "a sufficient link" to the country and "pay a fairer price".

UK Chancellor Rachel Reeves revealed in her Budget on Wednesday that from April 2026 people would now need to live in the UK for 10 years to meet the threshold for a full pension and when living outside the UK pay Class 3 contributions rather than Class 2.

Carl Walker, from the Jersey Consumer Council, said: "If ever you worked in the UK you are already a part of the pension scheme and have contributed to your state pension.

"Now, it might be miniscule and not even worth drawing, but what this had allowed you to do was fill up until you got to 35 years and then you could claim the full state pension from the UK as well as the full pension from Jersey."

Mr Walker said the previous policy had allowed people to "make a lot of money out of the UK government".

"On the face of it, it was ridiculously cheap," he said.

"To pay that every year to claim £230 a week would mean you'd be in profit within about six months of retiring.

"It was a great opportunity for people to take advantage of a very unusual policy which allow people to make a lot of money out of the UK state pension, and it's no surprise it's been shut."

'Perfectly right'

Graham Parrott, from Fitzroy Tax Services in Guernsey, said being a part of the scheme was "always a gamble because none of us know how long we are going to live".

"I have to confess it's been something I've been looking to do for my family," he said.

"But you have until April, so someone entitled to a UK state pension has a few extra months to boost that pension."

He said some people argued "if you're not living in the UK you should not have the pension".

"But I think it's perfectly right because you earned it while you were there," he added.