UK state pension exploited by foreign claimants

Thousands of pounds from the UK state pension are going to people who may have never worked or paid taxes in Britain due to a loophole being promoted on social media platforms like TikTok and YouTube. Foreign citizens who have lived in the UK for just three years can top up their National Insurance contributions to qualify for the pension, even if they have never held a job or paid income tax in the country. In the run-up to the April 5th deadline, at least 138,000 people topped up their state pension, according to HM Revenue and Customs (HMRC). However, the tax authority is unsure how many of these contributors were from outside the UK. Videos on TikTok and YouTube have been found encouraging Irish and Australian citizens to pay into their state pensions before the deadline, calling it a “no-brainer.” One Irish pension advice website told potential claimants that purchasing the maximum pension could offer lifetime earnings of £192,000, a return on investment of 5,599 percent. The state pension costs the UK government over £140 billion annually, similar to the combined budgets for education and defense. Workers need 35 years of National Insurance contributions to get the full pension but can claim part of it with just ten years.

Foreigners exploit pension loophole

Since 2013, HMRC has let people backfill missed years. Until April 5, 2025, the government allowed purchases of up to 18 qualifying years at once, but this has been reduced to six years. Someone buying 15 missing years might spend as little as £2,730 for an annual inflation-protected income of £5,100 from British taxpayers. HMRC admitted it could not determine how many foreigners are topping up their National Insurance contributions. About 8.5 percent of state pension recipients live overseas, and the many advice videos for foreigners suggest non-British citizens are exploiting this loophole. John O’Connell, chief executive of the TaxPayers’ Alliance, said, “Brits will be outraged that people with minimal ties to the UK can buy cut-price pensions funded by taxpayers. This loophole is being marketed abroad as a cheap route to generous British benefits, while HMRC claims it can’t track who’s cashing in. The government must get a grip and put a stop to this exploitation of the system.” Image Credits: Photo by Alexander Grey on Unsplash