Key Post UK State Pension - Make voluntary contributions to qualify for UK pension on top of Irish pension

Status
Not open for further replies.
OK so does this mean that at the Class 3 rate it takes nearly three years to "break even" for each Class 3 year paid? Apologies if this has been covered before (I suspect it probably has more than once).

If this is the case, should I reconsider paying Class 3 for 2027, 2028, and 2029 (last year eligible), because I'd be "gambling" on living longer than 9 years in retirement (from age 67 when eligible for UK state pension)?

[obvs I do expect that :cool:]
 
Class 3 cost £923 approx per year going forward to receive £6.89 (extra benefit per week for every year paid) has approximate pay back 2.57 years.

In the very last year the figures change
-they quoted specific to my case a benefit £2 per week if I pay the final class 3 £923 which has a pay back 8.8 years so she advised against paying the very last year.
 
Last edited:
Millie* said:
Class 3 cost £923 approx per year going forward to receive £6.89 (extra benefit per week for every year paid) has approximate pay back 2.57 years.

In the very last year the figures change
-they quoted specific to my case a benefit £2 per week if I pay the final class 3 £923 which has a pay back 8.8 years so she advised against paying the very last year.
Click to expand...
Quick search indicates this is an issue only if you are near the maximum pension amount of £241/week i.e. have close to 35 years on record. My forecast says I will be at £193 a month if I pay through 2029 (which will about 29 years).
 
That's true, but when evaluating whether to make additional contributions you need to use your marginal (i.e. highest) tax rate, rather than your effective (i.e. overall) tax rate.

Because every extra euro of income you add will be taxed at your highest rate.

Many pensioners pay tax at the lower rate, but someone with a full Irish state pension, full UK state pension, and private pension could fall into a higher tax bracket (e.g. 43% income tax + USC)
 
Last edited:
99thFloor said:
OK so does this mean that at the Class 3 rate it takes nearly three years to "break even" for each Class 3 year paid? Apologies if this has been covered before (I suspect it probably has more than once)
Click to expand...
I think this question might have been missed. The answer is no. It’s approx 3 years to break even based on gross income figures no matter how many NI years you pay for. Deductions such as tax and USC lengthen the pay back period to around the 5 year mark. If you expect or hope to live for 5 years or more after retirement date then it pays off handsomely.
 
Hi,

My wife applied to buy back voluntary NI contributions in April 2025. As she only lived in the UK for 2.5 years, they wrote back requesting her national insurance history from Ireland. She sent this off and got a reply yesterday. It stated “you are not eligible to pay voluntary national insurance contributions, as you did not work immediately in Ireland as per your Irish Record you do not meet the criteria of having 3 years continuous residency.” As far as I know she did part time subbing primary teaching work when we came home but did not work during the summer. I am unclear as to how they make the claim “you did not work immediately in Ireland as per your Irish Record” because the Irish social insurance record only provides a figure for the total number of paid contributions for that year and no details of when these contributions were paid. I’m just wondering if anyone has come across this before and has advice on how to or is it worth appealing??

Thanks
 
Write a letter and set out your grounds for appeal, include a detailed timeline and copies of supporting documentation.
 
Charlie1 said:
As she only lived in the UK for 2.5 years, they wrote back requesting her national insurance history from Ireland. She sent this off and got a reply yesterday. It stated “you are not eligible to pay voluntary national insurance contributions, as you did not work immediately in Ireland as per your Irish Record you do not meet the criteria of having 3 years continuous residency.”
Click to expand...
The criteria were 3 years continuous residency or 3 years national insurance contributions. I also lived in the UK for 2.5 years approx but qualified as I had enough national insurance contributions for those tax years, although only one of them was a full year. I also left the UK in July but didn't start working as a sub teacher until mid September (I wasn't paid for that summer). I qualified for class 2 so it is definitely worth appealing.
 
Last edited:
Charlie1 said:
It stated “you are not eligible to pay voluntary national insurance contributions, as you did not work immediately in Ireland as per your Irish Record you do not meet the criteria of having 3 years continuous residency.”
Click to expand...
This seems odd to me. I don't recall the eligibility requirement to be working in a foreign country (immediately after arriving or after a gap) when I applied. There was a stipulation that one had to have been working in the UK immediately after leaving to qualify for Class 2 payments. Otherwise you were still eligible to pay voluntary NICS but had to pay Class 3.

My application to pay voluntary NICS (in 2022) showed a work history gap of two months between arriving in Ireland and starting work and I was deemed eligible to pay NICS ...and also at Class 2 rates. Maybe they have tightened up the rules since then.

As @DannyBoyD states, an appeal would seem a good tactic. Good luck.
 
Last edited:
I've requested a teaching service history, so hopefully that will show dates and will appeal. In the meantime I logged into the government gateway and it now says she can buy back the last 6 years at class 3. Im confused how this is there as the letter said she was not eligible?
 
The HMRC website quotes the gaps on her record that she can apply for and always quotes the default Class 3 rate. Separately then, you have to apply to HMRC to get approval to pay those voluntary contributions and you cannot pay them until you get that approval.

She should appeal the initial verdict from HMRC by providing a copy of her PRSI record here in Ireland.
 
When considering class 3 is worth contributing vs class 2, the question I’m asking myself is whether I am better off paying £923 for voluntary NI or putting it in as an AVC into my pension. I’m 54. Assuming 5% investment growth for 13 years is a multiplier of 1.89 so would increase my fund by £2901 by the time I’m 67.

According to Google AI, single life annuity rates in Ireland for a 67 woman are between 5.2% and 5.6%. So if I was to get an annuity at 5.6%, that would guarantee me an additional pension of £3.12 per week vs an extra £6.89 from the UK state pension.

So I’m getting more than double by paying the voluntary NI.

I know I might get more growth than 5% per year with an AVC but the UK increases the pension for inflation so that kind of evens out. And I might get less than 5%!

So long story short, I’m not thinking about it in terms of how long it takes to “break even” but is it a good way to increase my pension, which I think it definitely is for me.
 
Status
Not open for further replies.
Back
Top