# Pension drawdown strategy



## jim

Hi,

Is it possible to access my occupational pension at 55 and draw it down in such a way that the funds get used up by the time i reach state pension age? 

Prob seems a strange question, but i think this is what i would like to do.

If my pension pot at 55 is say €500k what type of lump sum and what type of annual income could i expect for the 13 years until 68, assuming that will be the age that state pension kicks in? Is it even possible to calculate?

Thank you


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## RedOnion

jim said:


> Prob seems a strange question, but i think this is what i would like to do.


It's a very unusual thing to want to do, unless you've very specific circumstances. Have you really thought about why you might like to do this?

Make sure you get advice in this, both financial and tax. You'll end up paying high tax drawing it down in a short period.

Once you've left the employment that the pension relates to, one option is you could transfer 63,500 to an AMRF, and the balance to an ARF, and then drawdown the ARF whatever way you like.


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## Thomas1

I’m in the same boat. By 55, I’ll have a decent DB pension accrued (payable at 65) and also a decent lump in an AVC (10 x salary). 

I’m thinking if I leave work at 55, move my AVC out and then ‘retire’ with the AVC to maintain my lifestyle for 10 years before the DB kicks in. State pension will then be another top up.

Does this sound reasonable? How will the tax free lump sum work at 55?


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## jim

Thanks Redonion. Basically i hope to have the full irish and the full uk state pension from my late 60s and those alone will be adequate for me as well as a rental property that i will hopefully still have.

Therefore, i hope to use my occupational pension from 55 until state pension age as well as rental income and possible small bit of consultancy work. That would be more than adequate for me. I will also have my mortgage fully paid off  by 55.
I would certainly get advice before doing this but wanted to sense check it here as well. I will read up on arf and amrfs. 

An online calculator that could show me projections re drawing down 500k from 55 to 68 would be ideal.


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## Sarenco

jim said:


> i hope to have the full irish and the full uk state pension from my late 60s


Are you sure that’s possible?

I’m pretty sure you need 35 years of contributions to qualify for the full State pension in the UK and bear in mind that we are due to move to a total contribution approach here in the coming years.


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## Conan

If we move to a “total contribution approach” in Ireland (as is proposed) then you will need 40 years of contributions to qualify for a full State Pension (whether at 66, 67 or 68). If less than 40 years, it would be a proportionally reduced pension. Cannot see therefore that the OP could qualify for a full pension both in the U.K. and in Ireland.


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## Conan

Thomas1 said:


> I’m in the same boat. By 55, I’ll have a decent DB pension accrued (payable at 65) and also a decent lump in an AVC (10 x salary).
> 
> I’m thinking if I leave work at 55, move my AVC out and then ‘retire’ with the AVC to maintain my lifestyle for 10 years before the DB kicks in. State pension will then be another top up.
> 
> Does this sound reasonable? How will the tax free lump sum work at 55?


If your AVC is linked to your main DB scheme, then you must access both at the same time. You cannot access your AVC separately whilst not drawing down your DB pension and lump sum.


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## Thomas1

Conan said:


> If your AVC is linked to your main DB scheme, then you must access both at the same time. You cannot access your AVC separately whilst not drawing down your DB pension and lump sum.



If I leave the company though, can I not move my own AVC contributions to a private PRSA or some other product?


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## jim

Thanks Sarenco and Conan for your replies.
Im buying back my gap years in UK at the cheaper class 2 rate. Havent done it yet but am planning to which, as i understand it, will entitle me to full uk pension.

At 60 yrs old ill have about 40 yrs contributions. At 55 if i retire then can i somehow continuee to make prsi contributions to ensure full pension? Like through my pension income?


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## Sarenco

jim said:


> Im buying back my gap years in UK at the cheaper class 2 rate.


How many years of contributions do you have in the UK?  It can’t be too many if you will have 40 years of contributions in Ireland by 60.

My understanding is that you can normally only go back six years to make top-up contributions in the UK.


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## mtk

jim said:


> At 60 yrs old ill have about 40 yrs contributions. At 55 if i retire then can i somehow continuee to make prsi contributions to ensure full pension? Like through my pension income?



one currently pays 4% prsi on the arf drawdown that covers state pension so under your scenario of takng a drawdown each year that would cover it from age 55 to 68.


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## jim

Yeah it would be touch and go.
I have 3 yrs contributions in uk and i have received confirmation that i qualify for class 2 contributions to bridge the gap. So i have the opportunity to obtain the full uk state pension.

I have been paying prsi since i was 15 with some gaps here and there so at 60 i might be close to the 40 years. Is it possible to somehow make up any shortfall in that regard? For example, can i pay prsi on my pension or other income so as to protect entitlement to full irish state pension? Actually i think MTK had mentioned it above, thank you.
So if im not mistake i will probably have the opportunity to obtain full pension in both jurisdictions and if this is the case then i would want to run down my occupational pension from as early as possible (i think its 55) to state pension age. I would seek tax advice re this when the time comes. Is there anyway to project the kind of annual pension i might get from the occupational pension if doing it this way? I would project a fund of about 500k by then.


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## Sarenco

jim said:


> I have 3 yrs contributions in uk and i have received confirmation that i qualify for class 2 contributions to bridge the gap. So i have the opportunity to obtain the full uk state pension.


So you would be buying 32 years worth of national insurance contributions - is that right?

I’m surprised that’s possible at any kind of reasonable cost.


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## jim

Yes thats my understand Sarenco and at class 2 rate i think its about £3 per week so 32 years would be about £5k which is obviously an excellent investment.


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## Sarenco

jim said:


> 32 years would be about £5k which is obviously an excellent investment.


It sure is!


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## jim

Is it possible to draw down occupational pension across a, for example, 13 year period? I dont think i want it to be an annuity for life which im assuming would result in a lower annual pension. Id prefer for it to be a defined amount per year for a set number of yrs resulting in a hopefully higher annual pension. I think an ARF would provide this?
Anyway its years away but just want to know what my options are.


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## Steven Barrett

Thomas1 said:


> If I leave the company though, can I not move my own AVC contributions to a private PRSA or some other product?



It will always be linked to the occupational pension scheme. You can't access the AVC's ahead of the main DB scheme


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## Steven Barrett

jim said:


> Is it possible to draw down occupational pension across a, for example, 13 year period? I dont think i want it to be an annuity for life which im assuming would result in a lower annual pension. Id prefer for it to be a defined amount per year for a set number of yrs resulting in a hopefully higher annual pension. I think an ARF would provide this?
> Anyway its years away but just want to know what my options are.



Yes, it is. You have to satisfy the guaranteed income requirement, so lets assume the first €63,500 is put into an AMRF. That leaves you with €436,500. Assuming growth of 4% per annum, you can draw down €43,712 per annum for 13 years. You will have withdrawn all the money from the ARF at that point. 

Steven 
www.bluewaterfp.ie


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## fayf

The Tax Free lump sum needs to be considered as well, which depending on service length etc, would reduce the ARF available for drawdown considerably. And as, has been said, high annual drawdown amounts = high taxes.
There is also an arguement, for keeping the annual drawdown amounts lower, and supplement this with the tax free amount, over time. This also allows for the  ARF continues to grow more over time. The cumulative effect, of growth over time can be significant.


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## 50andOut

I think there are 2 factors you need to consider.

1. What would happen if the rules change and the state pension in either country is reduced/altered or if UK and Ireland close this double state pension entitlement.
2 How will you fare in a market crash over those 13 years

If you are happy that the combined annual payment of 2 state pensions will be enough to sustain yourself (rent aside certeris parabus) then this would presumably be all you need to match as a drawdown from your ARF. So around €20k per year drawdown from your 436K This could help alleviate both points I guess and double the lifetime mentioned by Stephen


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## 50andOut

jim said:


> Yeah it would be touch and go.
> I have 3 yrs contributions in uk and i have received confirmation that i qualify for class 2 contributions to bridge the gap. So i have the opportunity to obtain the full uk state pension.



You cannot backdate 32 years. I think its usually only 6 years you can backdate, but there is currently an extended backdated period allowed due to brexit back to 2006 I think it is, but that wont cover half that period, so like the prsi, you will need to continue paying yearly. Admittedly its peanuts vs the gain (assuming it doesn't get pulled)


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## jim

@fayf
I would certainly avail of the maximum tax free lump sum.

@50andOut
Good points. Im conscious that pension rules may change but i think this is a good investment regardless. For about €5k now, ill buy an annuity of approx £8,800 per annum for rest of my life from state pension age which could be 70 by the time I arrive. Its a no brainer. Im aware as well re backdating but my understanding is that i can buy enough NI class 2 stamps to get full pension.

Two state pensions would sustain me as i plan to have other income, savings and a spouse with a good pension. Hope to be debt free with modest spend. Of course there may be unforseen spend and medical spend.

I would tske the higger occupational pension in those 13 years and enjoy it, i would have some going into savings too. But realistically a lower drawdown amount of €30k would work and would prolong the fund. To minimse market risk i would seek to have the fund in safer assets rather than equities.

Thanks for the pointers. Biggest concern, as you pointed out 50andout is pension rule change but hopefully they wouldnt be too radical.


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## Sarenco

jim said:


> Im aware as well re backdating but my understanding is that i can buy enough NI class 2 stamps to get full pension.


I really think you need to confirm that point as it seems to be fairly critical to your proposed strategy.

TBH it seems too good to be true that you can purchase 32 years of contributions for as little as €5k.


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## Thomas1

SBarrett said:


> It will always be linked to the occupational pension scheme. You can't access the AVC's ahead of the main DB scheme



Thanks Steven and Conan. Sorry Jim also for hijacking your initial query.

I see this in our company AVC manual under Leaving Service: "You may transfer the value of your AVC Account to a new employer’s scheme or to a qualifying pension policy with a life assurance company. Alternatively, you may transfer the value of your AVC Account to a Personal Retirement Savings Account (PRSA) in your name"

This seems at odds Steven with having to leave the DB and AVC together?

Cheers
Tom


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## Steven Barrett

Thomas1 said:


> Thanks Steven and Conan. Sorry Jim also for hijacking your initial query.
> 
> I see this in our company AVC manual under Leaving Service: "You may transfer the value of your AVC Account to a new employer’s scheme or to a qualifying pension policy with a life assurance company. Alternatively, you may transfer the value of your AVC Account to a Personal Retirement Savings Account (PRSA) in your name"
> 
> This seems at odds Steven with having to leave the DB and AVC together?
> 
> Cheers
> Tom



No it doesn't. It will be a PRSA AVC, still linked to your employer scheme.


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## jim

@Sarenco  this is my understanding. Ill confirm and post back here.


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## 50andOut

jim said:


> @Sarenco  this is my understanding. Ill confirm and post back here.



Again as I mentioned above you cannot buy back this amount. you can currently buy back years from 2006-2020, so 15 years is possible.
This will bring you over the 10 year threshold and allow you a reduced pension. 

However in order to get the full pension you need 35 years and so will need to continue purchasing each year going forward.

That said, whilst it is not possible to purchase in one go, it is possible to purchase and the price is correct @Sarenco, the reduced stamps at class 2 for a person living abroad is ridiculously cheap. SHHHH!


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## Sarenco

Interesting.

Do you need to have already made some minimum level of contributions or can anybody apply?


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## 50andOut

ha! nice thought, but no, you have to be on the system to begin with and have a National Insurance (PPS) number.


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## Sarenco

According to this link, somebody living outside the UK is only eligible to make voluntary contributions if they worked in the UK immediately before leaving, and they previously lived in the UK for at least 3 years in a row or paid at least 3 years of contributions -
https://www.gov.uk/voluntary-national-insurance-contributions/who-can-pay-voluntary-contributions

I'm sure there are plenty of folks living in Ireland that previously worked for at least 3 years in the UK that are blissfully unaware of this option. It really is extraordinarily generous of the UK taxpayer.


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## Sadim

50andOut said:


> You cannot backdate 32 years. I think its usually only 6 years you can backdate, but there is currently an extended backdated period allowed due to brexit back to 2006 I think it is, but that wont cover half that period, so like the prsi, you will need to continue paying yearly. Admittedly its peanuts vs the gain (assuming it doesn't get pulled)



At the moment you can pay arrears of NI for a 14 year window (2006/07 - 2019/20). That is a concession arising out of changes to the UK state pension in April 2016. That extended window grows further up until 5th April 2023 when the rules revert to the normal 6 historical year maximum. You also have to be in "insurable employment abroad (Ireland)" to continue be eligible for the cheaper Class 2 rate. 

I still can't see how mathematically you can achieve a full standard Irish and UK state pensions if your intention is to retire shortly. After retirement you will not be eligible for teh Class 2 rate and instead will avail of the Class 3 rate (which costs roughly 5 x the Class 2 rate).


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## Sadim

Sarenco said:


> According to this link, somebody living outside the UK is only eligible to make voluntary contributions if they worked in the UK immediately before leaving, and they previously lived in the UK for at least 3 years in a row or paid at least 3 years of contributions -
> https://www.gov.uk/voluntary-national-insurance-contributions/who-can-pay-voluntary-contributions
> 
> I'm sure there are plenty of folks living in Ireland that previously worked for at least 3 years in the UK that are blissfully unaware of this option. It really is extraordinarily generous of the UK taxpayer.



Indeed it is Sarenco and I have availed of it! BY any annuity comparison the payback is extraordinary. Of course there is always a risk with state pensions as the rules can change abruptly but you take your chances!


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## SGWidow

If I wanted to go back 10 years - the first half of which I was working in Ireland and the last 5 years I wasn't working. Do I pay Class II for the first 5 years and Class III for the latter 5 years or would it all be subject to Class III?


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## jim

@Sadim im a long way from retirement, just planning ahead. It seems i do qualify for class 2 as i said above and i can go back some years and then fwd for the remaining which i think requires me to buy each remaining year as it comes up.
I project i will have enough prsi contributions in ireland also thereby entitling me to both pensions.

I didnt know about the class 3 rate if not in insurable emp. Still, small price to pay.


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## Thomas1

SBarrett said:


> No it doesn't. It will be a PRSA AVC, still linked to your employer scheme.



Thanks Steven. I’ll look into starting a completely separate PRSA and direct my existing AVC contributions there instead.


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## Steven Barrett

Thomas1 said:


> Thanks Steven. I’ll look into starting a completely separate PRSA and direct my existing AVC contributions there instead.



If you are a member of an occupational pension scheme and you also contribute to a personal plan yourself, you are not allowed to claim any tax relief on the contributions that you make. 

Steven
www.bluewaterfp.ie


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## Thomas1

Pensions make my head hurt! So what’s the best way for a person entitled to a decent (but not huge) DB pension at 65 to make a separate arrangement to retire before 65? I wouldn’t be interested in property and it seems bananas to pay 52% tax and leave the pension tax relief on the table to invest in funds outside of a pension scheme.


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## Sadim

SGWidow said:


> If I wanted to go back 10 years - the first half of which I was working in Ireland and the last 5 years I wasn't working. Do I pay Class II for the first 5 years and Class III for the latter 5 years or would it all be subject to Class III?



That is the gist of it alright but you have to apply to HMRC in Newcastle to determine your eligibility first


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## Sadim

jim said:


> @Sadim im a long way from retirement, just planning ahead. It seems i do qualify for class 2 as i said above and i can go back some years and then fwd for the remaining which i think requires me to buy each remaining year as it comes up.
> I project i will have enough prsi contributions in ireland also thereby entitling me to both pensions.
> 
> I didnt know about the class 3 rate if not in insurable emp. Still, small price to pay.



You are right, it is a cracking deal even at the Class 3 rate. Class 2 is pure icing on the cake. I suppose the thing you have to watch for though is legislation can change the rules of the state pension system. Indeed, we have seen that in Ireland with a) pushing out retirement ages and b) introducing different bases for calculating benefits.

There is nothing to stop the UK bringing in legislation that denies foreigners state pension rights! That said, to some extent we are protected by the Common Travel Area but the UK can change eligibility rules. I still think the risks are quite modest though.


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## Allpartied

I got a notification from the UK pension authorities to say that I have 10 qualified years of NI contributions and I am, therefore, entitled to a partial state pension.  I thought this would be added to my Irish record ( currently 25 years) and I would get a combined pension, at the rate of my country of residence.  Basically, I would get the Irish state pension due to the combined contributions in both countries. 
Are people saying that I could get both pensions, if I make voluntary contributions ( I would need another 20 years of UK contributions)?


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## Sadim

Allpartied said:


> I got a notification from the UK pension authorities to say that I have 10 qualified years of NI contributions and I am, therefore, entitled to a partial state pension.  I thought this would be added to my Irish record ( currently 25 years) and I would get a combined pension, at the rate of my country of residence.  Basically, I would get the Irish state pension due to the combined contributions in both countries.
> Are people saying that I could get both pensions, if I make voluntary contributions ( I would need another 20 years of UK contributions)?



You do not need the full additional 20 years if you do not want to. What you are talking about is voluntary contributions?

10 qualifying years equates to a UK state pension of £44.75pw and each qualifying year you add to that increases it by roughly £5pw. It is entirely up to you how many years you wish to add. I myself had 8 qualifying years and paid for a further 7 => 15 total. Will probably pay more in the future. At current rates 15 years equates to a pension of £67.12pw. It will not support a grand lifestyle but it is an extra, and its an extra at a time your income decreases dramatically anyway.


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## Allpartied

Sadim said:


> You do not need the full additional 20 years if you do not want to. What you are talking about is voluntary contributions?
> 
> 10 qualifying years equates to a UK state pension of £44.75pw and each qualifying year you add to that increases it by roughly £5pw. It is entirely up to you how many years you wish to add. I myself had 8 qualifying years and paid for a further 7 => 15 total. Will probably pay more in the future. At current rates 15 years equates to a pension of £67.12pw. It will not support a grand lifestyle but it is an extra, and its an extra at a time your income decreases dramatically anyway.



Thanks Sadim.  Do you know how this affects my Irish pension?  I had assumed that the two pension records would be combined and I would get the full state pension of the country I was residing in , at the time of my retirement.  Can you get two full pensions?  It seems unlikely to me.


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## Sadim

Allpartied said:


> Thanks Sadim.  Do you know how this affects my Irish pension?  I had assumed that the two pension records would be combined and I would get the full state pension of the country I was residing in , at the time of my retirement.  Can you get two full pensions?  It seems unlikely to me.



I think it is nearly impossible to get full state pensions in each jurisdiction. Think of it, under the new TCA rules you need 40 full years to get a full Irish state pension and under the UK system you need 35 years to get a full UK state pension. I suppose if you maxed out on voluntary contributions for both systems you technically could get near a maximum under each. 

Instance in my own case I spent 5 years in Scotland in the 1990s so, they are missing from my PRSI record. Straight away let us assume that has me down to 35/40ths of the Irish state pension. Sure, I could add in my UK NI record to top it up and get the max Irish pension. However, my thinking is to leave the Irish as it is and take my 8 years in the UK (5 actual + 3 notional) and pay voluntary under the UK system. At the moment, I have a maximum option of 14 historic years (2006/07 - 2019/20 incl) then I can add 11 more future years up to my UK retirement date (2020/21 - 2030/31) = 33 qualifying years which is near the maximum (35).

- 35/40 x €248.30 = €217.26
- 33/35 x (X or Y) = £156.15 - X and Y is a hybrid of the old and new UK state pensions, cut-off date 5th Apr 2016
- That gives a total of €390pw roughly...... but that is aggressively paying into the UK system for 25 additional years.

The full standard Irish SCP is €248.30 and the UK is £175.20 = €443pw

I would welcome a counterargument!


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## Conan

Allpartied said:


> Thanks Sadim.  Do you know how this affects my Irish pension?  I had assumed that the two pension records would be combined and I would get the full state pension of the country I was residing in , at the time of my retirement.  Can you get two full pensions?  It seems unlikely to me.


If you have NI service in the U.K. and a PRSI record in Ireland, you have two options:
- draw two separate pensions (probably reduced pensions), or
- ask the Dept of Social Protection to add your U.K. years to your Irish record, to improve your Irish State Pension.
You need to work out which option will give you the higher income.


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## jim

You can get both state pensions in full.

For uk pension, as outlined, you will need to buy back years if you are elligble.

For ireland, if you prsi contribution coversni think 40 years youll get it.

For example work three yrs in uk, this is main criteria for elligibility.

Work 40 years in ireland. Its not in concieveable that someone will work 43 years in their life.


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## Sarenco

jim said:


> You can get both state pensions in full.


Can you explain how that’s possible?

@Sadim’s posts would suggest otherwise.


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## jim

Never mind sadim Sarenco. Read the thread man, youve been a significant contributor to it and read the HMRC website again, youve posted a link above.

Work 3 yrs in uk = elligible to pay NI stamps.
Live abroad = qualify for class 2 stamps.
Otherwise pay class 3 stamps which are 5 times more expensive than class 2.

You can purchase voluntary NI ontributions at either class 1 or class 2 and can go back a certain number of years, i think its 6? Maybe longer at the moment due to some nuance in the rule?

Once you have 10 years you get the basic uk pension - 40 quid or whatever.

On a go fwd basis you continue to pay your annual stamp (whether class 2 or 3 - depends on circumstances) so long as you remain in insurable employment in ireland. 

Do the above until you have amassed 35 years you get full uk pension. 

Whats not to undersatnd? 

Now in ireland we need 40 years of prsi contributions - please correct me if im wrong?

Is it not concieveable that an individual works in uk for 3 years and in ireland for 40 years? Of course it is.

There is another interesting twist to this which i am open to correction on.

You can continue to amass irish prsi stamps whilst drawing you occupational pension. Therefore you could retire early and still make up the irish stamps to get full pension. 

The tricky part is in timing you retirement as you need to be in insurable emp in ireland in order to be able to pay uk voluntary stamps. So this would require some planning.


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## 50andOut

Given retirement age is 66/67/68. you are looking at a near 50 year working life - (part time jobs during college also receive stamps)

If you retire early, ensure PRSI continues to be paid until retirement age.

Jim I think you r last point only means you move to class 3 instead of 2, do doesn't stop you paying stamps, just will cost a little more (but value remains)?


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## 50andOut

Worked example of my own situation
Moved from UK to Ireland at age 23  (age at Jan 2021 = 46)

UK Stamps = 8
Irish Stamps = 23

I have recently purchased the voluntary class 2 back to 2006. ++14 years UK
I will continue paying annually voluntary UK class 2 for next 13 years (out of the next 20 years till retirement age) ++13 years UK

*Total UK = 35 (with 7 years spare to purchase if required*)

I will continue working in Ireland paying Irish stamps until retirement age (either through working income or ARF income) ++ 20 years 

*Total Ireland = 43*

This is assuming pension age stays at 66, increases in the pension age obviously increases the period which to accumulate enough stamps.


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## Sadim

Conan said:


> If you have NI service in the U.K. and a PRSI record in Ireland, you have two options:
> - draw two separate pensions (probably reduced pensions), or
> - ask the Dept of Social Protection to add your U.K. years to your Irish record, to improve your Irish State Pension.
> You need to work out which option will give you the higher income.



In actual fact I think the DSP in Sligo do that for you!


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## Sadim

50andOut said:


> Worked example of my own situation
> Moved from UK to Ireland at age 23  (age at Jan 2021 = 46)
> 
> UK Stamps = 8
> Irish Stamps = 23
> 
> I have recently purchased the voluntary class 2 back to 2006. ++14 years UK
> I will continue paying annually voluntary UK class 2 for next 13 years (out of the next 20 years till retirement age) ++13 years UK
> 
> *Total UK = 35 (with 7 years spare to purchase if required*)
> 
> I will continue working in Ireland paying Irish stamps until retirement age (either through working income or ARF income) ++ 20 years
> 
> *Total Ireland = 43*
> 
> This is assuming pension age stays at 66, increases in the pension age obviously increases the period which to accumulate enough stamps.



I wasn't disputing a scenario like what you have outlined, it certainly is possible if you start early. Typically though people retire early 60s and probably spent a few of their early years in college so, I would have seen it a struggle to wrap up a full 40 years in that scenario (which resembles my own). I certainly see myself falling short, perhaps 32 - 35 years total. Say, 35 max will be worth €217.26pw at current rates.

As regards the UK state pension, in my own case, I went to the UK at age 28 and stayed 5 years, got a notional credit for 3 additional years bringing me to 8 qualifying years. I have paid for 7 further years since so, I am at 15 years so far. Plan is to pay for the other 7 historic years some stage soon so that brings me to 22 years and I may pay a further 11 years to my UK retirement date in May 2031. So, even availing of every option open to me I get to 33 qualifying years which at current rates is worth £158.17pw.

Still, the real comparison here is what accumulated fund would you need to buy an annuity from an insurance company giving you roughly €390pw (€20,400).... I reckon about €500k! So, I think maxing out on your state pension options is a pretty good strategy. I am sure there are other that disagree!


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## Sarenco

Thanks for the worked example @50andOut - very clear.


50andOut said:


> Given retirement age is 66/67/68. you are looking at a near 50 year working life - (part time jobs during college also receive stamps)


I think that's the key point - to qualify for a full UK and Irish State pension, you would have start paying NI contributions in your teens and PRSI by your mid-20's.

I still think the facility to back pay NI contributions at such a low cost is a really fantastic deal.


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## SGWidow

Sadim said:


> That is the gist of it alright but you have to apply to HMRC in Newcastle to determine your eligibility first



Thanks Sadim,

Sorry to be a pain. Can I just do a belt and braces on this please? I have been on to the UK people who have confirmed my eligibility. To be honest, it's significantly easier to get an answer here on certain points than from those guys!

So, are you sure my supposition is correct or is it that you think it's probably correct? [Any help genuinely appreciated].




50andOut said:


> I will continue working in Ireland paying Irish stamps until retirement age (either through working income or ARF income) ++ 20 years



50andOut,

With that sort of brain power, no wonder that you managed to successfully head for the hills early!

Now to my question - are you saying, for someone in his 50s, that by paying the stamp due on ARF drawdowns that these PRSI payments work for the purposes of having insurable income to qualify for Class II contributions? Just for clarity also - is there a minimum drawdown/PRSI payment required? (I have a vague recollection of PRSI being set at a minimum of €500?)


Finally, a general question - are Class II contributions not due to stop sometime soon? (I have another recollection of having read this somewhere!)

BIG THANKS to all for the help and guidance here - very much appreciated.


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## Sadim

SGWidow said:


> Thanks Sadim,
> 
> Sorry to be a pain. Can I just do a belt and braces on this please? I have been on to the UK people who have confirmed my eligibility. To be honest, it's significantly easier to get an answer here on certain points than from those guys!
> 
> So, are you sure my supposition is correct or is it that you think it's probably correct? [Any help genuinely appreciated].
> 
> 
> 
> 
> 50andOut,
> 
> With that sort of brain power, no wonder that you managed to successfully head for the hills early!
> 
> Now to my question - are you saying, for someone in his 50s, that by paying the stamp due on ARF drawdowns that these PRSI payments work for the purposes of having insurable income to qualify for Class II contributions? Just for clarity also - is there a minimum drawdown/PRSI payment required? (I have a vague recollection of PRSI being set at a minimum of €500?)
> 
> 
> Finally, a general question - are Class II contributions not due to stop sometime soon? (I have another recollection of having read this somewhere!)
> 
> BIG THANKS to all for the help and guidance here - very much appreciated.



SG, you have to apply to HMRC first.... a Form CF83. I would attach a separate sheet listing my employment(s) since leaving the UK including Name/Address of Employer and dates from/to for each. Tick the Class 2 option in one of the questions. HMRC will tell you themselves what you can pay. There is also an additional criteria.... you must show you worked in the UK and paid NI right up to the date you left the UK. The reason for this is that Class 2 was obviously brought in for the self-employed originally but was extended to those who went abroad on "temporary work assignment" so, the idea is you stopped in the UK on a Friday, left the country pretty immediately and then have worked since. For the period you have worked abroad (Ireland) you should get the Class 2 option, you will get Class 3 for the periods you were not working.

Remember too, you can ignore the Class 3 options and just concentrate on your Class 2 years if you wish. This is a voluntary system.


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## Sadim

Sarenco said:


> Thanks for the worked example @50andOut - very clear.
> 
> I think that's the key point - to qualify for a full UK and Irish State pension, you would have start paying NI contributions in your teens and PRSI by your mid-20's.
> 
> I still think the facility to back pay NI contributions at such a low cost is a really fantastic deal.



As a participant in that deal I am paying to Her Majesty and intend to exercise a lot more options over future years!


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## 50andOut

SGWidow said:


> for someone in his 50s, that by paying the stamp due on ARF drawdowns that these PRSI payments work for the purposes of having insurable income to qualify for Class II contributions? Just for clarity also - is there a minimum drawdown/PRSI payment required? (I have a vague recollection of PRSI being set at a minimum of €500?)
> 
> Finally, a general question - are Class II contributions not due to stop sometime soon? (I have another recollection of having read this somewhere!)
> 
> BIG THANKS to all for the help and guidance here - very much appreciated.



PRSI deductions from ARF will contribute to the Ireland years qualifying years calc only but since this income is not from employment it does not satisfy the UK condition of working abroad for class 2. So I expect to move to class 3 at the point of ceasing work. Yes there is a minimum drawdown to meet the PRSI threshold, I think €500 is right - which is met from the first €12.5k anyhow.

I remember something about class 2 stopping but think maybe it was more about the backdated payments.  That said its all subject to change in the future we can only hope its not too drastic.


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## Sadim

50andOut said:


> PRSI deductions from ARF will contribute to the Ireland years qualifying years calc only but since this income is not from employment it does not satisfy the UK condition of working abroad for class 2. So I expect to move to class 3 at the point of ceasing work. Yes there is a minimum drawdown to meet the PRSI threshold, I think €500 is right - which is met from the first €12.5k anyhow.
> 
> I remember something about class 2 stopping but think maybe it was more about the backdated payments.  That said its all subject to change in the future we can only hope its not too drastic.



Well, I found the bit about ARF highly informative myself. I am not really up to speed myself on them. 

To qualify for Class 2 contributions in the UK you must show you were in "insurable employment abroad". Yes, there has been a lot of talk about doing away with Class 2 but it has not happened yet. I remember reading somewhere that it would be replaced by Class 4 but the costs/thresholds/criteria would be similar so, it does not seem like a big change, who knows? 

That is a very important last point to make 50andOut, any state pension system is subject to legislative change unlike your occupational pension which is kind of contractual (although tell that to the Waterford Wedgewood workers) so yes, they can change the rules. Indeed we have seen that in Ireland with the tinkering in 2012 and then changing the retirement age etc. The government also reserves the right to change the rules.


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## SGWidow

Sadim said:


> …..any state pension system is subject to legislative change unlike your occupational pension which is kind of contractual (although tell that to the Waterford Wedgewood workers)



Most pension schemes are subject to change - we don't need to quote extreme examples like WW - the ordinary non-disaster DB plan is inexorably dying - through, typically and sequentially, the closing off to new employees, then the closing off to future accrual, then the closing for good.

DB pensions were a nice idea of socialising later life income but they've had their day as they have been unable to resist the triple challenges of volatile markets, anaemic bond yields and increased longevity.


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## Sadim

SGWidow said:


> Most pension schemes are subject to change - we don't need to quote extreme examples like WW - the ordinary non-disaster DB plan is inexorably dying - through, typically and sequentially, the closing off to new employees, then the closing off to future accrual, then the closing for good.
> 
> DB pensions were a nice idea of socialising later life income but they've had their day as they have been unable to resist the triple challenges of volatile markets, anaemic bond yields and increased longevity.



True, I was a trustee of a semi-state pension fund for nearly 10 years and I definitely remember the issues of solvency arising from 2012 or so. The point I was making though is that it is a lot easier for governments to change the rules with state pensions


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## jim

Anyone know whether its possible to make a payment to HMRC by doing a revolute stg transfer?
I have the HMRC sort code and account number and i have set them up as a "business" (as opposed to individual) payee.
They do accept either an EFT or a stg bank draft for payment of voluntary NICs.
Thanks


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## 50andOut

Yes.

You have set it up and it's your sterling account to pay exact amount. Pretty straightforward. Just make sure to quote your NI number


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## Sadim

jim said:


> Anyone know whether its possible to make a payment to HMRC by doing a revolute stg transfer?
> I have the HMRC sort code and account number and i have set them up as a "business" (as opposed to individual) payee.
> They do accept either an EFT or a stg bank draft for payment of voluntary NICs.
> Thanks



I do not know if they accept Revolut but the bank details for voluntary contributions are as follows


Account Name:HMRC NI ReceiptsBIC:BARCGB22IBAN:GB49BARC20204830944793Free Text Reference:AB123456XICSURNAMEFIRSTNAMEINITIAL (NI Number followed by IC followed by Surname and first initial of christian name)


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## 50andOut

Jim

just as an update. Whilst my STG transfer that I manually initiated from revolut went through with no issue (and I have confirm of the prior tax years being marked as complete) it seems the ongoing DD for future pymts from revolut isn't possible. - Just got a letter today from HMRC advising "unfortunately your bank has advised that they have been unable to sanction your payments by DD"

50+O


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## Itchy

50andOut said:


> Jim
> 
> just as an update. Whilst my STG transfer that I manually initiated from revolut went through with no issue (and I have confirm of the prior tax years being marked as complete) it seems the ongoing DD for future pymts from revolut isn't possible. - Just got a letter today from HMRC advising "unfortunately your bank has advised that they have been unable to sanction your payments by DD"
> 
> 50+O



Did you use a GB IBAN or an LT IBAN? 

Revlout are going through a Brexit related reorganisation. They have sent emails to customers detailing the changes they need to make.


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## jim

I paid my vol contribution before christmas but have not heard from HMRC. Does anyone know what the best number to call them on is?
Thanks.


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## Sadim

jim said:


> I paid my vol contribution before christmas but have not heard from HMRC. Does anyone know what the best number to call them on is?
> Thanks.


0044 191 2037010.... The National Insurance helpline. They should be able to confirm payment but I think there is a delay of 2 - 3 months before it is credited to your NI record. With Covid lockdowns etc delays may be longer. I would also submit a request for an updated State Pension Forecast to the DWP in Wolverhampton, it is a Form BR19 and you get it on the gov.co.uk website. That Forecast will then confirm your updated state pension entitlements taking account of the voluntary contributions.


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## 50andOut

Did you set up your revenue gateway access? you can check directly there the forecast status - It will update showing eligible years and anticipated future pension amount.  I did this shortly after sending the payment and then eventually received a letter confirming same - was comforting to know the money was applied. 

As Sadim mentions there is an understandable delay in communications atm due to Covid etc


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## 50andOut

Itchy said:


> Did you use a GB IBAN or an LT IBAN?
> 
> Revlout are going through a Brexit related reorganisation. They have sent emails to customers detailing the changes they need to make.



I eventually rechecked on this and actually I had mistyped part of the acc nr/sort code... so resending correct info.  So Revolut may still be viable option yet.


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## Sadim

50andOut said:


> Did you set up your revenue gateway access? you can check directly there the forecast status - It will update showing eligible years and anticipated future pension amount.  I did this shortly after sending the payment and then eventually received a letter confirming same - was comforting to know the money was applied.
> 
> As Sadim mentions there is an understandable delay in communications atm due to Covid etc


I have tried that Gateway access a number of times and failed each time. It wants a UK address and even when I entered my old address in Scotland, no joy. I reckon its cross-checking against a current address register.... I don't know?


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## 50andOut

Sadim said:


> I have tried that Gateway access a number of times and failed each time. It wants a UK address and even when I entered my old address in Scotland, no joy. I reckon its cross-checking against a current address register.... I don't know?



I cant remember how I went about it but, I have just logged into it to check (as I do not have a uk address), I am registered under my Irish address and with my UK NI nr.


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## Sadim

50andOut said:


> I cant remember how I went about it but, I have just logged into it to check (as I do not have a uk address), I am registered under my Irish address and with my UK NI nr.


I must give it another go so using my Irish address!


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## ArthurMcB

It seems that gateway may only be accessibe if you are in the UK.


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## jim

I was able to access gateway earlier and can see that my contributions were applied


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## Marco 1972

SBarrett said:


> It will always be linked to the occupational pension scheme. You can't access the AVC's ahead of the main DB scheme



I think you have to take a Cost Neutral Early Retirement arrangement for you work pension to avail of  the AVC


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## TheLastBeep

Would anyone who has been able to do confirm their eligibility to purchase years in this manner mind outlining the steps for me? 

I started employment in the UK in 2005, moved to Ireland in 2006 but remained on an UK contract paying tax in the UK until late 2008 so there is a chance I am eligible. Must admit this does sound too good to be true but its certainly worth checking out.


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## Sadim

TheLastBeep said:


> Would anyone who has been able to do confirm their eligibility to purchase years in this manner mind outlining the steps for me?
> 
> I started employment in the UK in 2005, moved to Ireland in 2006 but remained on an UK contract paying tax in the UK until late 2008 so there is a chance I am eligible. Must admit this does sound too good to be true but its certainly worth checking out.



I see an issue there. One of the eligibility criteria for voluntary NI contributions is that you must have lived and worked for 3 consecutive years in the UK. If you started in the UK in 2005 and left in 2006 I do not see how you can satisfy this criteria


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## ArthurMcB

Agree wkth Sadim.

I would suggest reading the hmrc website, there is a wealthnof i fo there and everything you need to know.


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## Sadim

ArthurMcB said:


> Agree wkth Sadim.
> 
> I would suggest reading the hmrc website, there is a wealthnof i fo there and everything you need to know.


Or let me declare my interest in this, I charge a fee to help people through this process!


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## TheLastBeep

Thanks @Sadim  for the response. I am originally from the UK, so lived in the UK up until 2006 when I moved to Ireland. 2005 was when I started permanent employment but I'd previously have had a 1 year work placement in 2003 and various summer jobs before completing my degree in 2005 and starting work. 

When I first moved to Ireland it was a secondment with a view that I would eventually return to the UK, so I stayed on a UK contract during that period and paid tax in the UK - although I didn't live in the UK I was paid into a UK account and payslips may have been sent to a UK address, I can't remember. The move to Ireland then became permanent in 2008 when I signed an Irish contract.

Might be clutching at straws but any hope the above might make me eligible?


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## 50andOut

just write to uk gov and ask for a statement of NI Contributions against your national insurance nr. Assuming you know your NI number, then its not in the slightest bit difficult.





__





						Check your National Insurance record
					

Find out if you've paid enough National Insurance to qualify for the full State Pension - check gaps, contributions and credits, get a National Insurance statement, call the helpline




					www.gov.uk


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## Sadim

TheLastBeep said:


> Thanks @Sadim  for the response. I am originally from the UK, so lived in the UK up until 2006 when I moved to Ireland. 2005 was when I started permanent employment but I'd previously have had a 1 year work placement in 2003 and various summer jobs before completing my degree in 2005 and starting work.
> 
> When I first moved to Ireland it was a secondment with a view that I would eventually return to the UK, so I stayed on a UK contract during that period and paid tax in the UK - although I didn't live in the UK I was paid into a UK account and payslips may have been sent to a UK address, I can't remember. The move to Ireland then became permanent in 2008 when I signed an Irish contract.
> 
> Might be clutching at straws but any hope the above might make me eligible?



Strikes me like you are exactly the case that the cheaper Class 2 contribution was designed for. The Class 2 rate was originally introduced for the self-employed but eventually was extended to UK nationals who went abroad on "temporary overseas assignment". The temporary bit seems to be irrelevant. Anyway, download a Form CF83 from the HMRC website, complete it and send it off to HMRC Newcastle.... takes a while to get a verdict from them though.


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## Sadim

50andOut said:


> just write to uk gov and ask for a statement of NI Contributions against your national insurance nr. Assuming you know your NI number, then its not in the slightest bit difficult.
> 
> 
> 
> 
> 
> __
> 
> 
> 
> 
> 
> Check your National Insurance record
> 
> 
> Find out if you've paid enough National Insurance to qualify for the full State Pension - check gaps, contributions and credits, get a National Insurance statement, call the helpline
> 
> 
> 
> 
> www.gov.uk



Tried that 50, Nope it did not work.... it wanted a UK passport number which I do not have and a credit history report. Mind, I was only asked for that about 10 minutes into the sign up (why they could not ask me at the start I do not know


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## 50andOut

Sadim said:


> Tried that 50, Nope it did not work.... it wanted a UK passport number which I do not have and a credit history report. Mind, I was only asked for that about 10 minutes into the sign up (why they could not ask me at the start I do not know



What needs a UK passport and credit history? If you mean gov gateway I never suggested using that as you had mentioned sign up problems earlier.. 

As I stated, write to the address provided. Actually seems to be a on line form you can complete now making it even easier havent tried this, but might save you a stamp:


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## Sadim

50andOut said:


> What needs a UK passport and credit history? If you mean gov gateway I never suggested using that as you had mentioned sign up problems earlier..
> 
> As I stated, write to the address provided. Actually seems to be a on line form you can complete now making it even easier havent tried this, but might save you a stamp:



Cheers 50, must do that. It would certainly be handier than writing to them every so often for an update


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