What is a pension scheme?
A pension scheme or pension is a long-term savings plan that helps you save for the future. A pension plan allows you to make regular payments and/or transfer one-off lump sums into a fund for retirement. The amounts saved into your pension are called ‘contributions’. Find out why now is a great time to get started with your pension.
Why is taking out a pension so important?
These days we are living longer than previous generations. In fact, most of us can now look forward to 20 or even 30 years of retirement. A pension can help you prepare for these years, whether you want to retire to the country, travel or spend time with your grandchildren.
When is the right time to start a pension?
The money you save into your pension plan is invested so that your fund can grow over time; this is why the earlier you start a pension plan, the more time your fund will have to grow and the bigger your pension pot will be.
What tax reliefs am I entitled to on my pension contributions?
Unlike a regular savings account, money invested in your pension can earn important tax breaks. And when you retire and look for access to your fund, the benefits of your pension can be available in a tax efficient way.
The government encourages us to save for our future by offering valuable tax relief on retirement funds.
| Your monthly pension contribution |
Less tax relief |
Actual cost to you |
| €200 |
40% tax relief* |
€120 |
| €200 |
20% tax relief* |
€160 |
*Based on income tax rates as at January 2021. Source; Revenue.ie. These rates may change in the future.
What is the right pension for me?
There are a few factors to consider when choosing your pension plan, such as your employment status, whether you’re an investor or a novice and your attitude to investment risk. Whatever your personal circumstances are, we can help you choose the type of pension that works for you.
What will my pension be worth?
The value of your pension at retirement depends on how much you can afford to put away each month, the length of time you are making contributions, the type of plan you select and the investment return. one thing we know is that the sooner you start a pension, the bigger it should grow.
How much should I put into my pension?
How much you should contribute to your pension will depend on your specific circumstances. When deciding how much to save into your pension, it is important to think about how much you can afford, but also take into account how long you’ve got until retirement and what kind of income you think you’ll need during your retirement, based on the lifestyle you would like to have and how long you would expect to be in retirement.
At Campion Insurance, our Financial Advisors can help you decide how much you can afford to save and can help you through these important decisions.
State Pension FAQs
What is the State pension?
The State pension (contributory) is paid to people from the age of 66 who have enough Irish social insurance contributions. It is not means-tested and you can have other incomes and still get the State pension. While the contributory State pension is taxable, it’s unlikely to be taxed if it is the only source of income.
How much is the State pension in Ireland?
If you rely on the Irish State pension, the value of your pension will depend on a few factors, such as your age your social insurance contributions. from March 2019, the State pension in Ireland for a person aged 66 or over is €248.30 per week. Could you survive on the State pension alone? What will your finances look like in retirement?
Is everyone entitled to the State pension?
To qualify for the State pension you must have started paying social insurance before reaching 56 years of age. You must have paid at least 520 full rate social insurance contributions and have a yearly average of at least 48 paid and/or credited full rate contributions from the year you started insurable employment until you reach 66 years of age.
If you don’t have the above then you must have a yearly average of at least 10 paid and/or credited full rate contributions from the year you started insurable employment to the end of the contribution year before you reach the age of 66.
How many PRSI contributions do I need to qualify for a State pension?
To qualify for the State pension you must have started paying social insurance before reaching 56 years of age. You must have paid at least 520 full rate social insurance contributions and have a yearly average of at least 48 paid and/or credited full rate contributions from the year you started insurable employment until you reach 66 years of age.
If you don’t have the above then you must have a yearly average of at least 10 paid and/or credited full rate contributions from the year you started insurable employment to the end of the contribution year before you reach the age of 66.
At what age may I qualify for the State pension?
If you were born between 1/1/1949 and 31/12/1954, State pension age 66.
If you were born between 1/1/1955 and 31/12/1960, State pension age 67.
If you were born after 1/1/1961, State pension age 68.
Key Benefits/Did you know?
Did you know you can save tax on:
Your pension contributions;
Any investment growth;
Income in retirement (within limits).
Did you know that your income may drop by almost 70% in retirement?
As the maximum State pension (contributory) is €12,912 a year (€248.30 per week) … but the average wage is €40, 039.
Did you know that you made need an income for up 30 years or more when you retire?
This could amount to up to a third of your life, so it makes sense to save now.
Did you know that higher rate taxpayers can potentially benefit from up to 40% in tax relief on every €1 saved?
A €100 contribution only costs you €60! If you pay tax at the standard rate, you can benefit from 20% tax relief.
Did you know that at retirement, you may be able to take a retirement lump sum (tax free) subject to a limit of €200,000?
Did you know that the sooner you start a pension, the better…
Even if you’re older it’s not too late. You can claim tax relief on a higher percentage of your earnings, so there may still be time to catch up!
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