State pension in Ireland: A complete guide

Thinking of retiring to Ireland? It’s a popular retirement destination among UK expats, with over 100,000 of them living there¹.

Ireland offers a great quality of life, beautiful natural scenery, vibrant cities and of course, visa-free access for British citizens. So, it’s easy to see why you might be thinking of spending your post-work years there.

One of the first things you’ll need to do before your move is to sort out your pension arrangements. In this guide, we’ll cover everything you need to know about the state pension in Ireland, including whether or not UK retirees are eligible to claim it.

We’ll also touch on alternatives such as transferring over UK pensions, and how to save money when doing this using the Wise multi-currency account. Get UK income paid to you in Ireland using Wise, and you can get lower fees and the real, mid-market exchange rate.

Learn more

But more on this later. Let’s start with some basic facts about the Irish state pension system.

The Irish state pension - how it works

The state pension system in Ireland is based on social insurance contributions, known as Pay Related Social Insurance (PRSI). This is much like the UK, which uses National Insurance (NI) contributions to determine eligibility for the state pension.

The State Pension (Contributory) system is payable to anyone normally resident in Ireland, who’s paid enough into the system through work. It isn’t means-tested, so you can receive it alongside a salary, personal pension or other income.

There’s also a State Pension (Non-Contributory). This is a means-tested pension for people of retirement age who don’t qualify for the contributory pension or only a reduced rate of it, because they haven’t made enough social insurance contributions.

How much is the state pension in Ireland?

If you’re eligible for the Irish state pension, the amount you can expect to receive on retirement depends on two key factors. These are your age, and your PRSI contributions record.

Let’s take a look at the Irish pension rates for 2020²:

• People who qualified on or after 1st September 2012, can expect to receive a personal rate of between €99.20 and €248.30 per week. The lowest rate is for yearly average PRSI contributions of between 10-14, while the highest is for 48+ contributions.

• For people who qualified before 1st September 2012, a personal pension rate is between €124.20 and €248.30 a week.

• Once you reach the age of 80 years old, you’re entitled to receive an additional €10 a week.

This is just a guideline of Irish pension rates, as the rules and conditions are quite complex - so your personal circumstances could mean that you receive a different pension amount. You can find full information on the state pension (contributory) system in Ireland here.

What is the state pension age in Ireland?

The Irish state pension age in 2021 is 66 years old². This is the age at which you officially qualify to receive your state pension, but you don’t have to retire then.

There were government plans in the pipeline to increase this to 68 years old by 2028, but it’s not clear at the moment whether this will go ahead.

Is early retirement possible in Ireland?

Yes, you can retire early in Ireland and still receive some form of state pension.

If you retire before the age of 65 years old, you’ll need to make sure you keep on making PRSI contributions until you reach the official state pension age². Without an uninterrupted PRSI record, you could have difficulty accessing your state pension when you reach the age of 66.

As you’re not working, you’ll need to make voluntary PRSI contributions. You can also keep your PRSI record up to date by applying for Jobseeker’s Benefit and/or Jobseeker’s Allowance³, if eligible. These give you social insurance credits, just like working. This could be a handy option for people who are made redundant or can’t afford voluntary PRSI payments.

Irish state pension eligibility - who can claim it?

The rules surrounding PRSI contributions and state pension eligibility in Ireland are quite complex. You’ll need to look into the specific conditions which apply to your circumstances, but here are the general requirements you’ll need to meet²:

• You need to have started paying PRSI contributions before the age of 56 years old. This is known as your date of entry into insurance, and it can be used to calculate other important things such as your yearly average of PRSI contributions.

• You need enough years of full-rate PRSI contributions to qualify. You’ll need between 3 and 10 years of contributions depending on your age. For example, people reaching pension age before April 2002 only needed three years of qualifying contributions to be eligible for the state pension. But anyone reaching pension age after April 2021 need to pay in for 10 years, although half of their contributions can be voluntary.

• You need a certain yearly average of PRSI contributions. This is where it can start to get very complex, but the basic thing to know is that you must meet a minimum average of yearly PRSI contributions. This is worked out using different calculations depending on your age, but you can find full details on the Citizens Information website.

And of course, to access your Irish state pension, you must have reached the age of 66 years old.

To qualify for the non-contributory state pension, you must be over 66 years old, be legally resident in Ireland and satisfy a means test⁴.

What about self-employed workers?

If you work for yourself in Ireland, you can still access the Irish state pension. In fact, it’s been mandatory to pay social insurance contributions as a self-employed worker since 1988².

If you meet the qualifying rules and conditions outlined above, you’ll be able to access the Irish state pension on the same basis as an employed worker.

The Irish state pension for UK expats - how to claim it

Now, we come to the important question - can UK retirees access the state pension in Ireland?

In a nutshell, the answer to this is yes. Provided you are legally and habitually resident in Ireland (i.e. you live there most of the time and that is your main country of residence), you should be eligible to receive the Irish state pension.

But you’ll still need to have worked in Ireland and made PRSI contributions to qualify, or pass the means test for the non-contributory state pension if your PRSI record isn’t sufficient.

To apply for the state pension, follow these steps²:

1. Request a copy of your PRSI contribution statement - this can help you work out whether or not you qualify for the state pension. You can do this through MyWelfare.ie, and you may need to apply for a Personal Public Service (PPS) number first.

2. Complete a state pension application form - you can get one from your local Intreo Centre, Social Welfare Branch Office, Post Office or online.

3. Submit your completed form and any required supporting documents at the Department of Social Protection - it’s not possible to apply online, and you must make sure to apply at least 3 months before you reach the state pension age of 66.

Not eligible? Alternatives to the state pension in Ireland

If you’ve not worked in Ireland or are ineligible for the state pension for another reason, it’s good to know that there are alternatives available. Let’s take a look at your options as a UK retiree living in Ireland:

Claim the UK state pension

Provided you’ve made enough National Insurance contributions during your time in the UK, you should be able claim your UK state pension when you move over to Ireland.

Simply put in an application to the International Pensions Centre within 4 months of reaching your UK state pension age. Then, you can have your pension paid into a UK or Irish bank of your choice.

Remember though that this will usually involve currency conversion, which could mean high bank fees and poor exchange rates. A cheaper alternative could be to use Wise to receive UK pension payments in Ireland - we’ll look at how to do this in just a moment.

Private pensions in Ireland

Looking to boost your retirement savings? Whether you’re ineligible for the state pension or you don’t think it’ll be enough for your needs in retirement, you may be able to start a private pension in Ireland. You should have a choice of personal pension plans from banks and other financial institutions, just like in the UK.

Transfer your personal UK pensions to Ireland

The last option is to transfer over personal pension pots from the UK to Ireland. The best way to do this is to find an Irish scheme that is on the HMRC list of Qualifying Recognised Overseas Pension Schemes (QROPS). You can check the list here.

Moving a UK pension to any scheme not on this list could result in an eye-watering tax bill, or the transfer could be refused altogether by your UK pension provider.

If unsure, or you need to find the most tax-efficient pensions solution for your retirement in Ireland, consult a specialist pensions adviser.

Wise - an easy, low-cost way to manage your pension benefits in Ireland

If you’ll be having pensions or any other income from the UK paid to you in Ireland, hold fire before automatically using your bank. These payments will usually involve a currency conversion, which could see you lose money to transfer fees, conversion charges and expensive mark-ups on exchange rates.

Use Wise instead and you could save a bundle, especially if you have a good-sized pension pot. Open a multi-currency account and you can use the available UK account number and sort code to receive pension payments in GBP - without actually needing a UK bank account. Once a payment lands in your Wise account, you can convert it to EUR for just a tiny conversion fee and the real, mid-market exchange rate.

Alternatively, you can spend it right away using your linked Wise debit card. This clever contactless card automatically converts to the local currency at the real, mid-market exchange rate whenever you spend. This means there’s no need to change money or carry cash around, and you still get to swerve those high bank fees.

Even better, you can use your Wise card in 200+ countries without any foreign transaction charges.

Join Wise and start saving money

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So, that’s pretty much it - everything you need to know about the state pension in Ireland. We’ve covered it all, from state pension rates, early retirement, alternatives to the state pension and of course, eligibility rules for UK expats.

It’s not the most straightforward system in the world, but then pensions never are. But with the info in this guide, and a little bit of background reading, you should be able to find a pension solution that works for you during your new life in Ireland. Good luck, and enjoy your hard-earned retirement!

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Sources used for this article:

1. CSO
2. Citizens Information - contributory state pension in Ireland
3. Citizens Information - early retirement
4. Gov.ie - non-contributory state pension

Sources checked on 12th May 2021