State Pension Benefit Buyback by Former UK residents: 16/04/2023
Those resident in UK and Ireland currently require 10 years of social welfare ..ie PRSI contributions to qualify for minimum state pension benefits. Lots of us have a friend or work colleague who migrated to the UK to pursue career opportunities. Some stayed there as UK resident, some came back to the emerald isle. Those that returned with less than 10 years employment and required social security stamps will have no entitlement to UK state pension benefits.
The Opportunity..
There is an opportunity to buy back years as a UK non-resident and its over 5 times less expensive for UK non-residents to buy back years than it is for UK residents to buy back years. In colloquial terms, for UK non-residents, this opportunity is “a no-brainer”. To qualify a UK non-resident must have a minimum of 3 years paying the required stamps in the UK and can buy back up to 16 years UK state pension benefits, if application is made before 31 July 2023. (The opportunity narrows to being able to buy back to 2016 instead of 2006 after 31st July 2023). An Irish resident that was UK resident for 19 years can buy back 16 years state pension, hence providing a maximum UK state benefit pension benefit of STG£185.15 per week (€210.85 per week). This could be a hugely prudent piece of retirement planning where an Irish resident can avail of this opportunity and avail of Irish state pension benefits and any private pension benefits accrued too.
The cost is manageable for most and very minimal. .. See scenarios below..
For someone with 19 years contributions already, at STG£163.80 per year, you could buy back 16 years for STG£2,620.80 and enjoy STG£10,961.60 per year at state pension age, if 35 years UK state pension benefit years are reached.
For someone with 3 years contributions only, at STG£163.80 per year, you could buy back 16 years for STG£2,620.80 and enjoy STG£10,961.60* 19/35 = STG£5,950 per year at state pension age, if 19 years UK state pension benefit years are reached.
For someone with 9 years contributions already from previous UK residency, you could buy back 1 year of state benefit contributions for STG£163.80 and enjoy STG£2,750.80 per year at state pension. This meagre STG£163.80 single payment is enough in this scenario to provide minimum state pension benits with 10 years of contributions made.
To apply, you will require your NINO (National Insurance Number in UK) and passport. Then go to tax.service.gov.uk/check-your-state-pension/account , where you will get a Gateway ID Number. Then you will then be required to download the Gov.uk ID Check app to verify your identity. Using your Gateway ID, log onto gov.uk/checkstatepension to view your pension forecast. You will see your national insurance record, how many years of contributions you have, and which years of contributions you are missing.
To buy back UK pension years, complete the CF83 application form, which is available at gov.uk/government/publications/social-security-abroad-ni38. Print off the CF38 form and send it to HMRC via registered post. Progress of your application can be viewed after at least two weeks on gov.uk/check-your-state-pension/account using your Gateway ID and password.
