Buying back years to qualify for Brit pension

A financial advisor is offering advise for those who have queries on British pensions having worked in the UK, even for a short period.

Patsy Kilgannon of IPS Financial Advice said: “While working in the UK, it is highly likely a person made National Insurance contributions, similar to PRSI contributions here.

“These entitle you to a proportion of the UK state pension provided you have a minimum of 10 years contributions at the date of retirement.

“The maximum UK State pension is currently £164.35 per week or £8,575.78 per annum. To get the maximum pension, you need 35 years in paid national Insurance contributions.

“If you have at least one year in paid National Insurance contributions, you may get per- mission to buy back additional years to get you to at least the 10-year minimum requirement.

“If you have 10 or more years, you may well wish to buyback additional years to increase your pension entitlement, or you may be satisfied to leave things as they are.

“The price at which a UK state pension contribution year is purchased may vary significantly depending on your employment status and tax position.

“Hence, it may be wise to seek professional advice from an HMRC authorised broker in Ireland who will act on your behalf.

He says now is a good time to start buying back contributions. “The cost of buying back years is set to substantially increase.

“This has been subject to much recent speculation in the British press. Currently the standard rate for buying back a year is £741 but it is possible to pay a cheaper rate.

“To buy back years you need to have paid PRSI here in Ireland since you returned from the UK. Each year bought back will give you an additional pension of £237 per year.

“You are entitled to the two pensions if you have paid National Insurance contributions in UK and PRSI in Ireland.

“At the moment, UK State Pensions can be paid through the Irish Social Welfare payment system and if any tax is due, it is deducted at source.

“There is an expectation of ‘no change’ to the way UK state pension benefits will paid to Irish residents after Brexit.