As a worker in the UK, you may be entitled to a workplace pension, but did you know you can also set up a personal pension to boost your retirement savings? And, with the right approach, you can do so without breaking the bank. In this article, we’ll guide you through the steps to setting up a personal pension alongside your Irish one, offering a cost-effective way to secure your financial future. Read on for your step-by-step guide to buying a second pension in the UK.
During the 1980s and after the 2008 financial crash, hundreds of thousands of people migrated from Ireland to the UK in search of a new life, working various jobs such as road building, teaching, nursing, and finance. However, many who returned to Ireland believed they had left their UK state pension behind them. Luckily, a temporary concession now allows Irish citizens who worked at least three consecutive years in the UK and paid national insurance to buy back up to 16 extra years to their UK pension, instead of the usual six. This concession can be combined with continued voluntary national insurance contributions, potentially granting individuals both a full Irish and full UK state pension in retirement.
To qualify for the minimum UK state pension, you must have 10 qualifying years on your national insurance record, and if you want the full pension you need 35 years on your record. Even if you have not worked the required amount of time to reach the minimum 10 years, you can make voluntary contributions to increase your record, as long as you have already made three years of contributions. The deadline to pay voluntary contributions to make up for gaps between 2006 and 2016 is July 31; after this deadline, you will only be able to pay contributions to cover the previous six years.
The application process requires your national insurance number and passport, along with filling out the CF83 application form and sending it to HMRC by registered post. The UK government introduced changes to its state pension in April 2016, requiring a 35-year record of paying national insurance contributions to qualify for the full new pension. However, transitional arrangements allow people to plug any missing years from the 2006/2007 tax year onwards until July 31, 2023. Despite Brexit, both Irish and UK citizens living in Ireland can still benefit from social insurance contributions made when working in the UK.
In summary, the opportunity to build a second pension while working in the UK is a valuable option for Irish citizens. By following the steps outlined in this guide, individuals can easily and affordably invest in their future financial stability. As you navigate your career in the UK, don’t forget to consider the benefits of a second pension – it could make all the difference in your retirement years.
