PSA: UK Pension Buyback - have you worked in the UK for more than 3 years?

Hi, bit of a PSA for anyone who has worked in the UK for more than 3 years. You can buy back 15 years of pension contributions for a small amount, up until April of next year. Then it reduces to 8 years retrospectively.

From april on, you can also pay an amount to HMRC, and after 35 years of contiributions (15 you've bought retrospectively plus another 20 from now on), you will get the full UK state pension worth around 9k STG per year, tax free - including tax free in Ireland.

The amount you'll have to pay in annually may vary but it could be as low as 150 GBP per year for the next 20 years.

I didn't know any of this and only found out this week. Maybe it's advertised on this site, but not very well - as I never picked it up before. Hope it will help someone else.

Would act quickly though, the timelag between documentation may take up to 3-4 months so not long to meet the April deadline to get your 15 years retrospectively.

There are Irish companies which can assist in this process, don't want to advertise specifically any but google Irish, UK pension, buyback and you should find one.

I’ve frequently covered this point but it still amazes me how many people seem to be unaware of the planning opportunity.

Good to highlight that the window is closing down significantly in April next year

Marc said:

I’ve frequently covered this point but it still amazes me how many people seem to be unaware of the planning opportunity.

Good to highlight that the window is closing down significantly in April next year

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UK State Pensions - Time is running out to top up If you are looking to maximise your income in retirement, a good place to start is with your State Pension entitlement. Many Irish residents will have worked for some time in the UK and will have a UK National Insurance record. Its highly...

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Hi Marc -

I agree fully.

I consider myself better than average at money matters Marc and I had no idea of the benefits. Wish there was a sticky for this, to include other tricks such as paying 3k per year per child into an investment pot for them, to get around the lifetime tax free gift allowance limitation. (I don't even know fully how that works, whether you can open an investment account for your child.)

What other 'tricks' for wealth building should I be aware of?

There are lots of other posts about this in this Forum, and it's well worth doing.

However, from April next year, the limit will be 6 tax years (not 8), and the pension is not tax-free (though that would be nice) - it's taxable like any other income. It will be paid gross, but has to be declared as income here in Ireland.

I thought that up until next April, one could go back to the mid-noughties?

Yes 2005

Cheers Marc - the 8 years mentioned above could be a very, very costly "misunderstanding" for some folk!

What about if you only worked in the UK for a year ? Can you still apply ?

You need at least 3 years of contributions

The title should be worked in the U.K. rather than just England.

No sense in upsetting the remaining sane countries

Mamamia22 said:

What about if you only worked in the UK for a year ? Can you still apply ?

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I think they add pre employment credits ref like they do here, Which might assist in adding up to the 3 years. You should get a pension forecast asap as it takes so long for responses.

How many years contributions do you need for full U.K. state pension ?

How do you apply ? What are pre employment credits ?

Babby said:

How many years contributions do you need for full U.K. state pension ?

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35 IIRC

Mamamia22 said:

How do you apply ? What are pre employment credits ?

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I'm going via an 'agent' or some dude who knows the process. 500 EUR all in. No idea what pre employment credits are.

I spoke to an advisor at HMRC about this. His advice was, though, I could pay £2400 backdated contributions to fill in gaps. It wouldn't be worth it. As I've enough time before retirement to reach the full 35 years paying class 2 National Insurance Contributions of £163.80 a year. (About 22 more years when I'd be in my late 50s).
My worry would be that they'd stop letting me do it down the line. So better to take what I can now.

Mamamia22 said:

What about if you only worked in the UK for a year ? Can you still apply ?

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Mamamia22
Were you able to get a successful application through back in the day.

I only worked in the UK for 3 months in 1995 + one week on Jobseekers, but still managed to get a successful application through. When the first contribution was made, I was automatically given 3 years of “starter credits” (also known as “juvenile credits”) under regulation 4 (part 1) of the Social Security Regulations 1975. Those 3 years allowed a successful application for permission to back pay Class 2 contributions back to 2007.

So if you have not applied, maybe pursue it again.