MANY West Cork residents who worked in the UK may be unaware of their entitlement to a UK state pension, or ability to increase their entitlement, with a deadline to buy up cut-price contributions fast approaching.
By leveraging voluntary national insurance (NI) contributions (the equivalent of PRSI), individuals can now ‘buy back’ missing pension years at a reduced rate, and significantly boost their retirement income.
‘Former UK workers can secure a full UK state pension, with no impact on their Irish or other state/ private pensions, said John Ring, operations director of document-processing company XtraPension, which has already processed over 5,000 applications.
‘Yet, many of those who returned to Ireland after working in the UK forget the pension entitlements they left behind. For those who qualify, this is a once-in-a-lifetime opportunity to secure a UK pension potentially worth up to €280,000 over a typical 20-year retirement,’ he said.
The deadline to buy back is April 5th, with a chance to buy up to 18 years contributions at a cheap rate.
‘This could be worth up to €14,000 annually from the age of 67, and if you lived and worked in the UK for three years, you’re eligible.
‘You may also be eligible if you paid just one full year of NI contributions in the UK, followed immediately by work (where you paid social insurance) in any EU country to bring you over the three-year threshold,’ said Mr Ring.
The opportunity to buy back up to 18 years of NI contributions is unprecedented and time-sensitive because after April 5th, the opportunity to purchase more than six years will no longer be available.
To get the full UK state pension, you need to have 35 years of NI contributions which is available for most people who left the UK years or decades ago.
You need a minimum of 10 years of NI contributions to get any UK pension income; and many people think they need 10 years of UK work to get any UK pension but in most cases, years working outside the UK count towards this 10-year minimum.
If an application is received by HMRC after April 5th, people will only be able to buy six past years of pension entitlements.
