Personal Pension

A personal pension can be taken out by anybody who is self employed or by an employed person who is not part of an Occupational Pension scheme.
 
Only the pension holder can contribute to a personal pension policy. An employer may not contribute to these policies on behalf of an employee.
 
Contributions can be made on a regular or an ad-hoc basis.  Traditionally many personal pension contributions are timed to coincide with the Tax Return deadline in October each year
 
As with all types of pension funds, there is a wide range of investment options available ranging from the conservative to the more adventurous.  How the pension performs will be down to the investment choices made by the policyholder.
 

Tax Relief

Tax relief is available on all pension contributions up to certain limits. There is a current earnings limit of €150,000 (May 2010).
 
The limits are based on age and are as follows:

  • Under 30 – 15% of earnings
  • Under 40 – 20% of earnings
  • Under 50 – 25% of earnings
  • Under 55 – 30% of earnings
  • Under 60 – 35% of earnings
  • Over   60 – 40% of earnings

 
At retirement up to 25% of the fund may be taken as a tax free lump sum and the remainder is used to provide an income for your retirement.
 

Did you know?

  • Under Personal Pension legislation, the earnings limit of €150,000 means the maximum contribiution which can be made to a pension fund is only €60,000.   
  • For a single male aged 65 the fund required to provide an annual pension of €60,000 would be €1,094,000.
  • When you retire, it is sometimes possible to take all of your pension fund out as cash if your funds are below a certain threshold

Get a Pension Quote

Gender  
What age are you?  
 
 
 

And / Or
 
 
 
Get Quote

Frequently Asked Questions

  • How much should I save for my pension?

    This depends on the age you start contributing, whether your employer also contributes to your pension plan and what amount of pension income you want for your retirement.  See our online pension calculator which will give you some idea of the amount required.

  • Do I need Additional voluntary contributions (AVCs)?

    Additional voluntary contributions (AVCs) are extra payments you choose to make to your pension fund. You may need them if you find out that your existing contributions may not be enough to give you your expected income at retirement.

  • What happens to my pension if I die before I retire?

    This depends on whether you have an employer pension plan, a personal pension plan or a personal retirement savings account (PRSA).  If you have an employer pension plan there will be rules about what the fund will pay out to your dependants (people who rely on you for financial support) if you die ‘in service', (that is, while you are still employed). These are called ‘death-in-service' benefits.  Death in service benefits allow for a tax free lump sum and an annuity to be paid to a surviving spouse.  The maximum tax free lump sum payable is 4 times your salary. Ask your employer for information about what your plan provides. You should take this into account when deciding how much life insurance cover you need, or when making a will. 
     
    If you have a personal pension plan or PRSA, the value automatically passes to your estate for the benefit of your dependants if you die before you retire. You need to consider the value of your pension plan when deciding how much life insurance cover you need, or when you make a will.

  • What pension do I get if I retire early due to ill health?

    Some employers provide an ill-health pension for their employees if they have to retire early because of illness.  If your employer does not provide these benefits, you may want to consider taking out some form of salary protection insurance such as income protection insurance. This type of policy is not the same as a pension but it can replace part of your income for as long as you are unable to work due to ill health.
     
    If you have a personal pension plan or PRSA and If you become permanently unable to work due to ill-health and have to retire, you can immediately draw on your pension plan, no matter how young you are.
     
    As with voluntary early retirement, the amount you get will be much less than if you contributed up to your original expected retirement age because you have paid fewer contributions and these have been invested for a shorter time.

  • I've just been made redundant. What are my options with my pension?

    Whenever you leave employment through voluntary means or by redundancy, you will usually receive a letter from your former employer outlining your options concerning your pension.  You should study them carefully as this is an important decision for you to make.  The options open to you include transferring your fund to a new employer's scheme if you have found a new position, transfer it to a Buy Out Bond which transfers your fund from your former employer's responsibility and into yours or  transfer it to a PRSA.  You can also choose to leave the fund under the care of your former employer but unless it is a Defined Benefit Scheme, you should give careful consideration to moving it.  In Ireland there is no pension protection scheme and pension schemes may become insolvent leaving you with no pension.  It is important that you consider all of the facts carefully if you find yourself in this position.