Can I claim both UK and Irish State Pensions?

There are a lot of Irish people who have previously or are still working in the United Kingdom. While in employment, these individuals would have paid national insurance stamps which count towards a UK state pension entitlement.

 

UK State Pension Requirements

Qualifying for the UK state pension depends on your National Insurance contributions or credits. To receive the full UK state pension, you typically need to have made National Insurance contributions for 35 years.

To qualify for any sort of UK state pension entitlement, you must have a minimum of 10 years of contributions or credits on your national insurance record. These can be earned through employment, self-employment, certain benefits, or voluntary contributions.

You will receive a pro-rata pension based on your national insurance record by state pension age.

To check your National Insurance record and get a personalized forecast of your state pension entitlement, you can use the "Check your State Pension" service on the UK government's official website, if you have a log in. For those that don't have log ins, they can submit Form CF83 to the HMRC.

It's essential to plan for your retirement well in advance and ensure you have the necessary contributions to receive the state pension you expect.

Voluntary National Insurance contributions

You may have the ability to make voluntary contributions in order to bolster your record to bring you closer to the potentially 35 full years required to qualify for a full state pension.

You do not need to be a resident of the UK in order to avail of the voluntary contributions scheme. You can usually pay voluntary contributions for the past 6 years with the deadline being the 5^th of April each year. You can then continue to do this until you reach state pension age.

There are changes to the voluntary national insurance system which are due to come into effect in 2026. The government has closed what it sees as “loopholes” that allowed people living overseas, with only limited UK connections, to build up UK State Pension benefits at very low cost.

From 6 April 2025, even if you have previously been eligible to pay the cheaper Class 2 rate, you will now have to pay the higher costing, Class 3 rate, for any future voluntary contributions.

Going forward, individuals will need to have lived or paid National Insurance in the UK for at least 10 years before they are allowed to make voluntary contributions.
This is an increase from the previous requirement of around three years.

Paying voluntary contributions can improve your eligibility for the State Pension and certain state benefits. However, it's important to assess whether it makes financial sense for your situation.  Please contact us should you wish to review your statement pension forecast as part of your overall financial plan.

 

Irish State Pension Requirements

To qualify for the Irish state contributory pension, you must have a minimum of 520 Pay Related Social Insurance (PRSI) stamps on your record.

To qualify for the full Irish state pension, you need to have 40 full years on your PRSI record by state pension age which is currently age 66.

You will receive a pro-rata pension based on your PRSI record should you have between 10 – 40 years PRSI credits by state pension age.

The "total contributions approach" (TCA) is a method used by some countries to calculate state pension benefits based on an individual's total lifetime or career contributions to the social security system. It's designed to provide a pension that reflects a person's overall contribution to the system rather than just their recent contributions or earnings.

It should be noted that there is also currently a ‘yearly average’ calculation which can be which in certain circumstances can give a full state pension even if the person does not have the full 40 years credits. This will depend on when you first entered insurable employment and the average PRSI credits you paid by the time you reach state pension age. The Yearly Average method is currently being phased out, over a 10 year period with it being fully removed by 2034.

It's important to note that the rules and eligibility criteria for the Irish State Pension (Contributory) can change over time. Therefore, it's advisable to check with the Department of Social Protection in Ireland or visit the official government website for the most up-to-date information on eligibility and pension rates.

Voluntary PRSI Contributions

The scope for making voluntary PRSI contributions is much more narrow in Ireland than in the UK. In Ireland, you can make a voluntary contribution in relation to the current year but an individual does not have the ability to go back over previous years like in the UK where they can pay contributions in relation to the previous 6 years.

If you are getting a social welfare payment, you will also be receiving credited PRSI stamps keeping your record up to date.

 

Can I claim both the UK and Irish State Pensions?

Yes, you can be paid both the UK and Irish state pensions if you qualify for both based on your respective social insurance record in each country. Records cannot be combined in each country if applying for independent pensions.

Exhausting the possibility of claiming both state pensions is one of the first things we do as part of our financial planning process with any client who has worked in the UK.

 

Can I combine my UK and Irish National Insurance Stamps?

Ireland and the UK have a bilateral agreement in place that allows UK national insurance contributions to be taken into account in order to qualify for the Irish State Contributory pension. This can only be done if the individual doesn't qualify for the Irish pension on their Irish record alone and is done at the time of application for the Irish state pension.

As previously noted, the option of purchasing voluntary UK National Insurance Contributions should be explored well ahead of state pension age to try and qualify for both state benefits. It is important to get a retirement plan in place as early as possible.

 

How is the UK state pension taxed in Ireland?

An individual who Irish domiciled and Irish tax resident will be liable to Irish taxes on the UK state pension they receive. This income may be taxable in the UK, but you should get a credit in Ireland for the UK taxes paid.  The UK state pension should be included in the foreign pensions section of the Irish tax return. It will be subject to the normal income tax and USC rates.

Non-Irish domiciled residents, who are taxed under the remittance-based regime, will be liable for Irish tax on the UK state pension income to the extent that they remit it into Ireland. Should they leave the funds outside the country, in a UK bank account for example and not remit the funds into Ireland, they will not be subject to Irish tax. They will however possibly be subject to UK taxes, depending on their levels of income in the UK and their tax status.

You should seek advice in this area to ensure you are tax-compliant.

It's important to note that the tax implications extend beyond just pensions when it comes to holding UK investments while being an Irish tax resident. Irish residents with UK investments such as stocks, bonds, or property may face complex tax considerations. The tax treatment can vary depending on factors like the type of investment, how long it's been held, and whether any income or gains are remitted to Ireland. Given the intricacies of cross-border taxation, it's advisable to consult with a financial advisor who specializes in UK-Ireland tax matters to ensure proper compliance and optimize your investment strategy

What happens to my private and occupational pensions in the UK?

You can leave these pensions where they are and then access them at retirement age in line with HMRC rules, or alternatively, you can transfer them to a pension structure in Ireland.

You can transfer most private sector pensions but most public sector pensions cannot be transferred.  Some people may look to transfer their UK pension to Ireland for the following reasons:

• Consolidation of all pensions
• Better investment options
• To convert the holdings to Euro
• For estate planning
• Fears of change in rules due to Brexit

 

You should always speak to a financial advisor before making such a decision in order to gain a better understanding of the full range of options available to you, as there are many factors depending upon each individual’s specific financial circumstances which need to be considered.

 

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PLEASE NOTE THAT WE ARE A FEE-PAYING FINANCIAL ADVISORY SERVICE AND NOT A GOVERNMENT AGENCY.

We provide advice in relation to state pension entitlements as part of our overall financial advice service.

Please contact us should you wish us to assist you in building a retirement plan.