So, heard the discussion re UK pension entitlement on the radio earlier this week and went ahead and completed form CF83 as suggested and went through process of registering online with my biometric passport. Pleasantly surprised and delighted to learn that I already have 11 years of UK credits (despite actually making only 8 years of contributions - some of them only partial years). As It stands, even before buying back years it informs me I'm entitled to a UK pension of approx £63 p/w when I turn 67. It also shows when one clicks on buying back additional years as a default Class 3 contributions (or buypack of approx £820 per year) even though like others here I feel I should be qualified for Class 2 having worked here in Ireland for the past 22 years.
Anyway, my question is a pleasant one, regarding the very favourable situation I find myself in, based on discussion with someone that worked in selling AVC's, in that they said all your combined pensions on retirement can't exceed 2/3 of your final salary on retirement.
I have a public service pension entitlement of over 20 years having bought back some years in the past. If I work to 65 I'll have approx 33 years of contributions in total.
I've also been paying into an AVC for the past 19 years and in recent years I've upped the payments to that which should leave me with a AVC fund of approx €95k at retirement.
If I buy back years 2006 to 2023 in the UK and continue making further contributions in the coming years, I can achieve the 35 years required for a full UK pension at 67.
If I'm at risk of coming near this 2/3 limit of pensions vis a vis final salary before retirement should I:
1. Consider early retirement before 65?
2. Reduce my AVC contributions?
3. Contact an independent financial advisor?
With regard to 3 above, I deal with a very good financial advisor promoted through my department HR. However, as with all such agents acting on commission, he tends to have a bias towards getting you to contribute towards AVC's and other investment vehicles (Zurich funds) and has a relatively limited knowledge (or possible deliberate blind spot) on the subject of buying back years or supplentary pension "available to retirees in order to make up the shortfall in pension for the period between the date of retirement and the age of eligibility for the State Contributory Pension." His position was that even though I would be forced to retire at age 65 when I would be entitled to my occupational pension, I wouldn't be elegible for the state contributionary pension until 66/67 and would likely have to sign up for job seekers in the intervening year(s) to make up the shortfall.
In reality it would seem I may be able to retire before 65 and qualify for the supplementary pension although those benefiting from AVC contributions aren't likely to tell you that.
I don't want to go buying back years in the UK pension if it means a full UK pension would bring me above the 2/3 limitation when I turn 67, whereby I may not be able to avail of it at all? (or does it it just mean any excess would be subject to extra income tax?) However, buying back UK years would seem to be a much better investment either to buying back years in a public service pension or contribution to an AVC (in spite of the associated tax relief).
Anyway, sorry for the lengthy post but any insights or knowledge of the 2/3 rule appreciated.
Anyway, my question is a pleasant one, regarding the very favourable situation I find myself in, based on discussion with someone that worked in selling AVC's, in that they said all your combined pensions on retirement can't exceed 2/3 of your final salary on retirement.
I have a public service pension entitlement of over 20 years having bought back some years in the past. If I work to 65 I'll have approx 33 years of contributions in total.
I've also been paying into an AVC for the past 19 years and in recent years I've upped the payments to that which should leave me with a AVC fund of approx €95k at retirement.
If I buy back years 2006 to 2023 in the UK and continue making further contributions in the coming years, I can achieve the 35 years required for a full UK pension at 67.
If I'm at risk of coming near this 2/3 limit of pensions vis a vis final salary before retirement should I:
1. Consider early retirement before 65?
2. Reduce my AVC contributions?
3. Contact an independent financial advisor?
With regard to 3 above, I deal with a very good financial advisor promoted through my department HR. However, as with all such agents acting on commission, he tends to have a bias towards getting you to contribute towards AVC's and other investment vehicles (Zurich funds) and has a relatively limited knowledge (or possible deliberate blind spot) on the subject of buying back years or supplentary pension "available to retirees in order to make up the shortfall in pension for the period between the date of retirement and the age of eligibility for the State Contributory Pension." His position was that even though I would be forced to retire at age 65 when I would be entitled to my occupational pension, I wouldn't be elegible for the state contributionary pension until 66/67 and would likely have to sign up for job seekers in the intervening year(s) to make up the shortfall.
In reality it would seem I may be able to retire before 65 and qualify for the supplementary pension although those benefiting from AVC contributions aren't likely to tell you that.
I don't want to go buying back years in the UK pension if it means a full UK pension would bring me above the 2/3 limitation when I turn 67, whereby I may not be able to avail of it at all? (or does it it just mean any excess would be subject to extra income tax?) However, buying back UK years would seem to be a much better investment either to buying back years in a public service pension or contribution to an AVC (in spite of the associated tax relief).
Anyway, sorry for the lengthy post but any insights or knowledge of the 2/3 rule appreciated.
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