Is it worth for a younger person?

I

irishfinanceguy

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We all know this makes a lot of sense for the older generation, but for us younger lot surely the rules could change a lot by the time we reach retirement age

Personally I'm considering paying for class 2s as theyre cheap but otherwise I feel its too risky

Curious how others feel?

Also wanted to say thanks for all who contributed to this UK state pension pages, yee are lifesavers for many
 
DannyBoyD said:
This is always the case for any product.

Having said that, whilst it may be closed for future entrants, it is unlikely to be cut off once you are in the system.
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The class 3s aren't cheap so I thought against paying for them, personally I am gonna pay for the class 2s and leave it at that with the intention of meeting the minimum 10 year threshold

Only God knows how future government will manage state pensions in many decades to come, its gonna get spicy
 
Just resurrecting this thread - wanted to get a sense check

I'm 38 and have been approved with 3 recent years of NI contributions to pay Class 3. So, realistically I'll need to pay 28 years plus (if retirement age moves) to get closer to max entitlements. I will have a full Irish state pension (as it is currently calculated) as I maintained a PRSI presence during those 3 years.

This is approximately €1200 per year for the next e.g. 28 years which is €33,600
At retirement I would be entitled to €12,650 per year

I will have a substantial public sector pension and private pension all of which is currently maxed out, so I won't have any tax credits.
I see this is an easy way to purchase an annuity type income for my retirement.

My total outlay would be a bit less than €35,000 for around €7,000 per year after tax as an annuity.

Has anyone else come to a different conclusion? I appreciate that all might change - means testing, rejoining the EU etc

Does anyone think it's not good value if most contributions ahead of you?
 
Only my view but it has to be worth it. Based on an annuity of say 6% that €35000 will get you €2100 before tax or say €1200 after it so looks well worth it compared to putting money into a bog standard pension. Now you'll get tax relief on the €35000 and you'll get all those years of growth tax free but the UK pension rate should also increase every year. I think how cheap the Class 2 was is making people wonder if this is still a good deal in comparison but that was an amazing offer and probably shouldn't be used in comparison.
 
mt1975 said:
Only my view but it has to be worth it. Based on an annuity of say 6% that €35000 will get you €2100 before tax or say €1200 after it so looks well worth it compared to putting money into a bog standard pension. Now you'll get tax relief on the €35000 and you'll get all those years of growth tax free but the UK pension rate should also increase every year. I think how cheap the Class 2 was is making people wonder if this is still a good deal in comparison but that was an amazing offer and probably shouldn't be used in comparison.
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Yes, I estimated (at 6%pa growth) I'd have gotten around €100,000 over the 28 years for equivalent growth, but my private pension is maxed out and I can afford to spend this money, so it would have been an after tax investment with no tax relief and approx 40% on gains.

That might leave me with 65k approx - so after 10 years I'd have surpassed that. Will I live past 77? Most likely...

Not to mention I get a bit of currency hedging, guaranteed income (although that is covered with PS pension)
 
Id be concerned that if a united Ireland were to happen in our lifetime that there would be implications on drawing down both an Irish & UK State pension.
 
irishfinanceguy said:
The issue is there is a relatively high risk of pension reform, so I don't think it's wise to assume too much regarding future payouts. I'm referring to younger people.
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There are always gloom and doom predictions but the best decisions you can make, barring having a crystal ball, are based on the current regulations. If you're entitled to pay class 3 for a UK pension, I'd say do it. Everything may go tits up but the British State, with all its problems is still probably one of the most reliable bets out there. They still have a monarch for God's sake, they don't do revolutions. It's a country in which natural law still matters. The CTA means that our two countries are pretty much joined at the hip. Every other overseas pension contributor will have been shafted long before the reciprocal rights of people in the CTA will be under threat. There are simply too many of them here and too many of us there to make it worthwhile.
 
Lamps said:
concerned that if a united Ireland were to happen in our lifetime
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AI or Climate Change will do for us before that happens.

In my view, paying the voluntary NICs is a no brainer - even if Class3 isn't as sweet a deal as Class2 was.
 
Lamps said:
be concerned that if a united Ireland were to happen in our lifetime that there would be implications on drawing down both an Irish & UK State pension
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Its more the break up of UK that would be an issue, although this is highly unlikely , its all talk at this stage. However if there was a breakup who would pay out the pension then?
I think if all this talk about break up of UK or NI leaving UK the whole issue of pensions would be used as a political weapon to keep it altogether.
Would you be prepared to let your UK pension go for a United Ireland, No.
 
Other states have dissolved in the past without OAPs being left to die in the gutter. Do you remember hearing any sob stories about Czech or Slovak pensioners when Czechoslovakia separated? No, me neither.

For that matter, the UK has already broken up — in 1922, remember? The obligations of the former United Kingdom of Great Britain and Ireland were divvied up on an agreed basis between the two successor states. Nobody got shafted. If NI were to leave, or Scotland were to leave, the same thing would happen again.
 
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