Thanks to what was once dubbed “a wild loophole”, thousands of Irish people have applied for an opportunity to significantly boost their pension pot
“I went over to the UK in 1979 and stayed until 2001,” he said. “I was 19 and wanted to see the bright lights.”
While in England, the Leitrim man painted everything from factories and gasometers to the London Underground.
“I’d start painting the tunnels of the Tube at 11:30 at night and go on till 5:30 in the morning,” he said.
But while browsing Facebook, Mr Doyle came across an ad for XtraPension, a Galway-based company that helps Irish people boost their UK pension entitlements by buying back national insurance (NI) contributions.
He initially thought it was a “scam” but got someone to check out the company and then spoke to John Ring, its operations director.
Mr Doyle had six qualifying years of national insurance (NI) contributions from the UK and XtraPension helped him apply for a one-off opportunity to buy up to 18 years’ NI contributions.
Today’s News in 90 – Tuesday November 18
By accumulating 24 years’ worth of NI contributions, Mr Doyle was entitled to a decent chunk of a UK state pension. People with 35 qualifying years are entitled to the full pension, which is currently worth £12,547.60 (€14,254), and Irish people who’ve racked up enough social insurance contributions in the UK and Ireland can claim a state pension from both countries, worth a combined €30,000 a year
Buying those 18 years’ contributions came with a cost of €3,367 – or €202 for each year, at a so-called ‘class 2’ rate. But because Mr Doyle had already received a tiny lump sum from HMRC in 2024, he only had to pay €300 in total to top up his NI record. After turning 66 last month, he finally received his first pension payment from the UK.
The extra pension has proved life-changing for Mr Doyle and the thousands of other Irish people who’ve been buying UK pension years. He’s been spending his retirement going to the gym, swimming and travelling around the coast with his brother.
“It’s made a big change to my life,” he said. “I’m more chilled out now rather than stressing about paying car insurance and property tax and dealing with cost of living.
“I won’t refuse the king’s penny.”
Many of the hundreds of thousands of Irish people who worked in the UK when the Irish economy was in the doldrums paid little heed to their future UK pension when they returned to Ireland during more prosperous years.
But thanks to what the Financial Times once dubbed “a wild loophole”, thousands of them have applied for an opportunity to significantly boost their UK pension entitlements.
Any Irish people who worked in the UK for at least a year and then immediately spent time working in the EU – including Ireland – were entitled to apply for a temporary scheme that enabled people to increase their UK pension contribution record by up to 18 years by paying voluntary NI contributions, Ring said.
After the April 5 deadline – which had been postponed several times due to overwhelming demand – applicants could only fill in gaps in their NI record for up to six years. UK authorities were so snowed under with applications that they are now about eight months behind in processing them, Nick Charalambous, managing director of Cork-based Alpha Wealth, estimates.
For every 10,000 Irish people who are entitled to a full UK pension by buying back pension years and who live 20 years past retirement age, it would cost the UK exchequer about €2.8bn. Photo: Getty.
“It’s worth over €300,000 if you receive the full UK state pension and live to the age of 85,” said Cyrpus-born Mr Charalambous, who grew up in the UK and moved to Ireland in his early 20s.
He bought 18 years’ worth of NI contributions to boost his own UK pension entitlement and helped 200 clients apply to do the same as part of their financial planning review with Alpha Wealth.
For every 10,000 Irish people who’re entitled to a full UK pension by buying back pension years and who live 20 years past retirement age, it would cost the UK exchequer about €2.8bn, according to an expert who specialises in claiming UK pension entitlements for Irish people but declined to be identified.
XtraPension’s Mr Ring said 4,000 of the firm’s clients in Ireland have successfully applied to buy NI contributions and have paid for those contributions.
“They’re done and dusted and the next stage for them is to need to keep paying annually if they still want to continue buying back years into the future. They’re looking at buying every year.”
Mr Ring’s clients typically spent seven years in the UK, have an average age of 55, and left the UK in 1997, when the Celtic Tiger was in its infancy. Much of his business comes from helping Irish people file an appeal to the UK authorities due to British civil servants mistakenly demanding Irish applicants pay the more expensive class 3 rate of NI contributions, which costs almost €1,000 for every qualifying year, instead of the cheaper class 2 rate, which currently costs about €200.
Niamh O’Kennedy, managing director of Hello Humans, a web and digital marketing agency, applied to top up her NI record herself last year but sought out the help of XtraPension after HMRC deemed she should pay the class 3 contribution rate. She estimates the successful appeal saved her €14,000 in the cost of buying back UK pension years.
“I ended up paying £3,000 as I bought 10 years at €179 each,” O’Kennedy said.
Ms O’Kennedy applied to boost her UK pension record after her parents heard about the loophole on the radio.
Niamh O’Kennedy applied when her parents heard about the loophole on the radio. Photo: Mark Condren.
“They thought ‘she might not have a good pension and this is almost like free money’,” she said. “Now I’ll have an Irish state pension, a UK state pension, and whatever private pensions I’ve accumulated over the years.”
Ms O’Kennedy moved to London in 1995 and worked for advertising agency McCann Erickson. She returned to Ireland in 2000 and worked for ad agencies such as Ogilvy before setting up her own agency earlier this year.
“I have a lot of friends who lived in London at the same time as me and they’ve gone through this process as well,” she said.
“The first step was trying to get my national insurance number. I hadn’t saved any (paperwork) from my time in London. I probably spent hours on the phone trying to get through to someone so I could find the number. Luckily, I remembered most of my London addresses because I’d live with another Irish friend and between us we could remember where we lived.”
Sylvia Splendori – who worked in the UK from 1991 to 1999 – set out to buy 18 years’ NI contributions and filed the application herself. But she hit an obstacle when HMRC informed her that she would have to pay the class 3 contribution rate, which would cost about £17,000. An appeal aided by XtraPension led Ms Splendori to being categorised as a class 2 contributor, which reduced the cost of topping up her NI record to £3,000.
“I started the process about two years ago,” she said. “Before then, I never thought I would have qualified for a UK state pension unless I was living there permanently.
“I had my national insurance number but I didn’t know the exact dates of where I was working and I didn’t understand the impact that would have on my application to pay the class 2 rate.
“To have two regular state pensions will be a lovely thing, and I also have a pension from my employer and a small private pension from the UK. I won’t be going on luxury holidays every year but it’s a contribution that will make life easier. My dream for my retirement is going on a luxury safari in Africa.”
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