In this highlight from our newsletter we're looking at options to help you plan for retirement.
Whether you’re an employee, self-employed, or a company director, your pension remains one of the most powerful and tax-efficient ways to save for the future.
Why pensions matter
Pension Season refers to the weeks leading up to the self-assessment tax return deadline. During this time, you can make a pension contribution for the previous tax year, allowing you to reduce your tax bill while boosting your long-term savings.
In practical terms, this means that if you make a qualifying contribution now, you can offset it against your 2024 income, effectively getting the Revenue to help fund your retirement.
In practical terms, this means that if you make a qualifying contribution now, you can offset it against your 2024 income, effectively getting the Revenue to help fund your retirement.
Tax relief is available at your marginal rate, meaning higher-rate taxpayers can get up to 40% relief on contributions. For example, a €1,000 pension contribution might only “cost” you €600 after tax relief. A powerful incentive to make the most of this annual opportunity.
The tax advantages at a glance
Tax relief on contributions
You can claim Income Tax relief on pension contributions at your marginal tax rate (20% or 40%), depending on your income band. This applies to contributions made to approved schemes such as Occupational Pension Schemes, PRSAs, Retirement Annuity Contracts (RACs), and certain overseas plans.
Relief is subject to age-related percentage limits and an earnings cap of €115,000 per year.
Tax-free growth
Funds within your pension grow free from Income Tax and Capital Gains Tax while invested. This means all investment returns - whether from interest, dividends, or capital appreciation - are sheltered from tax, allowing your savings to compound more efficiently over time. This tax-free environment is one of the key advantages of pensions compared to other savings vehicles.
Tax-Free lump sum at retirement
When you retire, you can usually take up to 25% of your pension fund as a lump sum, subject to Revenue limits. The lifetime tax-free limit for lump sums is €200,000 across all pension arrangements.
For company directors and business owners, pensions are even more attractive. Employer contributions are deductible as a business expense, reducing corporation tax, and can often exceed the limits that apply to personal contributions.
It’s a win-win: good for the business and excellent for the individual’s long-term financial security.
Auto-enrolment is coming – be ready
One of the biggest upcoming developments in Irish pensions is the introduction of Auto-enrolment.
This long-awaited system will automatically enrol employees who are not already part of a pension scheme into a new national plan. Both employers and employees will make contributions, with additional top-ups from the State.
While the aim is to improve retirement outcomes for workers, employers need to start planning now.
If you don’t already have a pension scheme in place, you’ll be required to register your eligible employees under the Auto-enrolment system. This will have specific contribution rates, administrative requirements, and limited flexibility compared to private occupational schemes.
As a business owner, it’s worth considering whether it makes more sense to establish your own pension arrangement now. Doing so allows you to:
- Retain control over contribution levels and scheme design
- Choose from a broader range of investment options
- Provide a more tailored benefit for your employees
- Avoid being defaulted into a State-managed system
Helping employers set up and manage pension schemes is a core part of what we do. We can advise you on whether your current arrangements are compliant, competitive, and suitable or, if needed, design a solution that works for your business and your team.
For individuals: don’t leave it too late
For employees and the self-employed, pension planning remains one of the smartest financial decisions you can make. Even modest, regular contributions can grow substantially over time, thanks to the power of compound growth and ongoing tax relief.
If you haven’t reviewed your pension in the past year, now is the perfect time to check:
- Are you contributing enough to meet your retirement goals?
- Are your funds invested appropriately for your age and risk tolerance?
- Could you make an additional contribution before the deadline to reduce your 2024 tax bill?
A short review now could make a big difference later.
The bottom line
Whether you’re an employer preparing for Auto-enrolment, a company director maximising tax-efficient contributions, or an individual looking to make the most of pension season, the key message is simple: take action now.
The combination of generous tax incentives, flexible options, and the upcoming Auto-enrolment framework make this an ideal time to review your retirement strategy.
Do you need help choosing? Let’s talk.
We’re here to help you navigate the choices, compare providers, and ensure you’re getting the best value and performance from your pension plan.
