India-UK social security pact: Will your PF balance grow under the new deal?
While the India-UK trade pact has attracted attention for opening up markets and reducing tariffs, the social security agreement could have an equally meaningful impact for Indian professionals.
The India-UK Comprehensive Economic and Trade Agreement (CETA) came into force on July 15, granting Indian exporters duty-free access on nearly 99% of tariff lines in the UK. In return, India will phase out or reduce tariffs on 90% of tariff lines for British goods. Alongside the trade pact, another agreement is set to directly benefit thousands of Indian professionals working overseas.
A major change has come into effect for thousands of Indians working in the UK on temporary assignments. Along with the India-UK CETA, the two countries have also implemented a Double Contribution Convention (DCC) from July 15, 2026.
This agreement exempts eligible Indian employees and their employers from paying social security contributions in the UK during temporary assignments for up to five years.
For many professionals, this raises an important question: Will this help their Employees' Provident Fund (EPF) savings grow?
HOW DOES THE NEW AGREEMENT WORK?
Earlier, many Indian professionals sent to the UK by their employers had to contribute to the UK's social security system while also remaining covered under India's social security framework. This often meant paying into two systems at the same time.
For employees returning to India after a few years, this was not ideal. Since they usually did not stay long enough to qualify for UK social security benefits, a part of their salary went towards contributions they could not fully use.
The new agreement changes that. Eligible employees on temporary assignments of up to five years will now be exempt from making social security contributions in the UK. The exemption period has also been extended from three years to five years, giving greater flexibility to professionals working abroad.
WHO WILL BENEFIT?
The Agreement on Social Security, entering into force alongside the Agreement, exempts Indian workers and employers from making dual social security contributions in the United Kingdom during temporary assignments. The period of exemption has been increased from three years to five years.
“More than 75,000 Indian professionals and over 900 companies are expected to benefit. The Agreement will support mobility and continued social security coverage of the employees on temporary overseas assignments. This will enhance India-UK partnerships in the service sector, leveraging the high skills and innovative service sectors of both countries,” stated the government in a press release.
The biggest beneficiaries are likely to be professionals in sectors such as information technology, consulting, engineering, finance and other services, where companies regularly send employees to the UK for short-term projects.
The agreement applies to temporary assignments and is intended to support employee mobility between the two countries. It does not automatically apply to Indians who permanently relocate to the UK or join local employers there.
SO, WILL YOUR EPF BALANCE INCREASE?
For many employees, the answer is likely to be yes. However, the agreement does not increase the EPF contribution rate or provide any additional government benefit. Also, as eligible employees will no longer have to contribute to the UK's social security system during temporary assignments, they can continue contributing to India's EPF without losing a part of their earnings to another country's social security programme.
This means that their retirement savings can remain in India and earn interest under the EPF scheme. Over a five-year assignment, this could result in a larger retirement corpus than under the earlier system, where part of the employee's earnings went towards UK social security contributions.
The exact benefit will depend on an individual's salary, employment contract and whether the employee continues to contribute to EPF during the overseas posting.
WHY IS THIS CONSIDERED A MAJOR GAIN?
Union Commerce and Industry Minister Piyush Goyal said many Indian professionals working in the UK for two to five years were earlier paying social security contributions without receiving any meaningful long-term benefit.
According to him, around a quarter of their salary was effectively going towards contributions that they could not fully utilise because of the limited duration of their stay. Under the new agreement, eligible workers on temporary assignments of up to five years will no longer have to make those contributions in the UK.
This allows employees to retain more of their earnings and continue building their retirement savings in India.
In other words, while the India-UK trade pact has attracted attention for opening up markets and reducing tariffs, the social security agreement could have an equally meaningful impact for Indian professionals.
By removing the burden of dual social security contributions, the agreement makes overseas assignments more financially rewarding. It also helps Indian companies reduce employment costs while allowing employees to continue building their long-term retirement savings through EPF.
The India-UK Comprehensive Economic and Trade Agreement (CETA) came into force on July 15, granting Indian exporters duty-free access on nearly 99% of tariff lines in the UK. In return, India will phase out or reduce tariffs on 90% of tariff lines for British goods. Alongside the trade pact, another agreement is set to directly benefit thousands of Indian professionals working overseas.
A major change has come into effect for thousands of Indians working in the UK on temporary assignments. Along with the India-UK CETA, the two countries have also implemented a Double Contribution Convention (DCC) from July 15, 2026.
This agreement exempts eligible Indian employees and their employers from paying social security contributions in the UK during temporary assignments for up to five years.
For many professionals, this raises an important question: Will this help their Employees' Provident Fund (EPF) savings grow?
HOW DOES THE NEW AGREEMENT WORK?
Earlier, many Indian professionals sent to the UK by their employers had to contribute to the UK's social security system while also remaining covered under India's social security framework. This often meant paying into two systems at the same time.
For employees returning to India after a few years, this was not ideal. Since they usually did not stay long enough to qualify for UK social security benefits, a part of their salary went towards contributions they could not fully use.
The new agreement changes that. Eligible employees on temporary assignments of up to five years will now be exempt from making social security contributions in the UK. The exemption period has also been extended from three years to five years, giving greater flexibility to professionals working abroad.
WHO WILL BENEFIT?
The Agreement on Social Security, entering into force alongside the Agreement, exempts Indian workers and employers from making dual social security contributions in the United Kingdom during temporary assignments. The period of exemption has been increased from three years to five years.
“More than 75,000 Indian professionals and over 900 companies are expected to benefit. The Agreement will support mobility and continued social security coverage of the employees on temporary overseas assignments. This will enhance India-UK partnerships in the service sector, leveraging the high skills and innovative service sectors of both countries,” stated the government in a press release.
The biggest beneficiaries are likely to be professionals in sectors such as information technology, consulting, engineering, finance and other services, where companies regularly send employees to the UK for short-term projects.
The agreement applies to temporary assignments and is intended to support employee mobility between the two countries. It does not automatically apply to Indians who permanently relocate to the UK or join local employers there.
SO, WILL YOUR EPF BALANCE INCREASE?
For many employees, the answer is likely to be yes. However, the agreement does not increase the EPF contribution rate or provide any additional government benefit. Also, as eligible employees will no longer have to contribute to the UK's social security system during temporary assignments, they can continue contributing to India's EPF without losing a part of their earnings to another country's social security programme.
This means that their retirement savings can remain in India and earn interest under the EPF scheme. Over a five-year assignment, this could result in a larger retirement corpus than under the earlier system, where part of the employee's earnings went towards UK social security contributions.
The exact benefit will depend on an individual's salary, employment contract and whether the employee continues to contribute to EPF during the overseas posting.
WHY IS THIS CONSIDERED A MAJOR GAIN?
Union Commerce and Industry Minister Piyush Goyal said many Indian professionals working in the UK for two to five years were earlier paying social security contributions without receiving any meaningful long-term benefit.
According to him, around a quarter of their salary was effectively going towards contributions that they could not fully utilise because of the limited duration of their stay. Under the new agreement, eligible workers on temporary assignments of up to five years will no longer have to make those contributions in the UK.
This allows employees to retain more of their earnings and continue building their retirement savings in India.
In other words, while the India-UK trade pact has attracted attention for opening up markets and reducing tariffs, the social security agreement could have an equally meaningful impact for Indian professionals.
By removing the burden of dual social security contributions, the agreement makes overseas assignments more financially rewarding. It also helps Indian companies reduce employment costs while allowing employees to continue building their long-term retirement savings through EPF.
