Get to know your CSP

Are you someone who doesn’t fully understand your contributory state pension?

The contributory state pension or CSP for short is often underrated and misunderstood. Yet it is likely to form a significant portion of your income in retirement.

To benefit your financial well-being, it is important that you understand how the CSP works, how much you are likely to get and how to optimise it.

I have been working with my 1-1 clients to do just that. Some clients are pleasantly surprised by how much they will get. This knowledge has alleviated their worry around not having enough income in retirement. In turn, this has led to more pro-activity around private pension provision.

Here are some useful facts about the CSP:

✔The CSP is not means tested. You can still get it even if you have other income, such as an occupational or workplace pension.

✔In Ireland, you can get the State Pension (Contributory) from the age of 66 if you have enough social insurance (PRSI) contributions.

✔40 years PRSI contributions or credits will entitle you to a full CSP currently €14.4k annually payable from age 66.

✔If you have less than 40 years of contributions, you will be entitled to a pro-rata pension. For example someone that has 30 years contributions, would be entitled to a 30/40th or 75% of the full CSP (€10.8k pa) from age 66.

✔You can check your contributions and potentially address any gaps by requesting a Contribution Statement. The quickest and easiest way to do this is through MyWelfare.ie

Different rules may apply if you are a public or civil servant. The rules that apply to you will depend upon when you entered the service and the specific pension scheme that you are in. A recent article I wrote for Public Affairs Ireland called ‘Pensions and Meh’ may be just the catalyst you need to get on top of your pension planning!

Like many people now living in Ireland, some of my client’s spent time working in the UK. I’ve been able to support them to optimise their CSP from that country too. If you or anyone you know worked in the UK for 2+ years, it is vital that you take steps now to check your eligibility and find out whether you can access one of the cheapest forms of pension coverage you can get!

I am writing a separate article covering this process so be sure to check it out if you or anyone you know previously spent time working in the UK. It will guide you on how to act now to optimise your income in retirement as cost effectively as possible 💗💸