National Insurance rebates

What National Insurance rebate can I get?

If you have made National Insurance contributions it is possible to get them back when you return to your own country.

National Insurance contributions are allocated to what is called the State Second Pension — a government-administered fund that foots the bill when you retire.

You can however get access to this pension by contracting out the State Second Pension scheme.


You must contract it out before the end of the financial year on April 5.


This means you’ll be choosing to direct your funds to your own personal pension fund, which will be set up as part of the National Insurance rebate process.
In order to qualify for a National Insurance rebate you need to:

  •  be working in the UK and making NI contributions;
  • have a permanent NI number;
  • not be self-employed.

You will only be able to receive the benefits of your investment at retirement age.


You must contact a UK pension provider or financial advisor and instruct them to contact the HMRC with the necessary paperwork authorising your National Insurance rebate.

And once you set this up, you won’t have to go through the process at the end of every financial year as your National Insurance contributions will just keep on being paid into your personal pension fund.

Unfortunately, it’s not possible to contract out your National Insurance directly to a superannuation or pension fund in Australia, New Zealand or South Africa.

But, depending on the type of fund you direct your National Insurance rebate into, you should be able to transfer the money to a fund at home when you leave the UK.

There are companies who will help you set your National Insurance rebate and will charge a managment fee which is normally a small percentage of the amount you have in your pension fund.

National Insurance Rebates for New Zealanders

While Australians and South Africans have to wait until they reach retirement to access their contracted-out National Insurance rebates, New Zealanders might be able to get a better deal.

In theory, it’s possible for New Zealanders to get 40 per cent of their NI contributions paid back to them in a cash lump sum on return to New Zealand. This is because of the way the law is interpreted in New Zealand.

Getting the cash is not as easy as it sounds.

Firstly, you are required to lock at least 60 per cent of your NI contributions into what’s called a Qualifying Recognised Overseas Pension Scheme (QROP). Only then is it possible to attempt to turn the remaining 40 per cent into cash.

This process can take years and for this reason, you’ll be hard pressed to find a financial advisor who would recommend that you even try to get your NI contributions back in New Zealand dollars.

Any questions?

See our money advice forum.