Reasons to take out a Pension
1. Investing in a pension is a great way to save tax:
- On the payments you make into your pension
- And on any growth in your pension investments.
You can also take a tax-free lump sum when you retire (up to certain limits).
2. Your income could drop by over 70% when you retire
The maximum State Pension (Contributory) is just under €13,800* a year, but the average wage is €48,021** a year. That’s a drop of over 70% which you can reduce by saving into a pension.
*Annual State Pension Contributory www.welfare.ie
**Source: CSO, Average earnings in Q1 2023, Earning and Labour Costs May
3. You may need an income for up to 30 years of retirement
We are living longer. Nowadays, you may need an income for 30 years or more, after you retire. So, it makes sense to start saving into a pension now.
4. Up to 40% tax relief when you pay into a pension
If you are a higher rate taxpayer, you can get up to 40%* in tax relief on every €1 you pay into your pension. This means paying €100 into your pension only ‘costs’ you €60. And even if you pay tax at the standard rate, you can get 20% tax relief.
*Assumes higher rate tax payer. Source: Revenue.ie. It is important to note that tax relief is not automatically guaranteed; you must apply to and satisfy Revenue requirements. Revenue limits, terms and conditions apply.
5. The earlier you start the better
Starting a pension early can have a big impact on your retirement fund. If you start paying €250 a month from age 25, your projected pension pot would be over €243,188 when you hit 65. If you wait until you’re 45 to start, it could be just *€81,761.
*Figures are based on level monthly contributions of €250. This illustration assumes a gross investment return of 4.5% per annum, a 5% premium charge and 1% annual fund management charge. This rate is for illustration purposes only and is not guaranteed. Actual investment growth will depend on the performance of the underlying investments and may be more or less than illustrated.
Get started with our quick and easy calculator. Just tell us when you were born, how much you want to save each month and what your current pension is worth, if you have one. We’ll show you how much you might get when you retire.Pensions Calculator
Pension Pot webinar series
Join our latest Pension Pot series to learn more about the world of pensions. We’ll show you how to plan for your best retirement and how to improve your longer-term, financial wellbeing. Our industry experts will explain how pensions work so you can better understand your options, the very attractive tax reliefs, and why it’s important to know how your pension is invested
Want to know more about the world of pensions?
Our supports section has plenty of material to grow your knowledge from Baz & Nancy’s Pensions Prep, the 3 steps to a better retirement to What’s your pension type? From our Talking Pensions magazine to What a pension meeting looks like with us.Find Out More
Revenue limits, terms and conditions apply. Tax relief is not automatically granted, you must apply to and satisfy Revenue requirements.
Life assurance and pensions products are provided by New Ireland Assurance Company plc., trading as Bank of Ireland Life. The Company may hold units in any funds mentioned on its own account. New Ireland Assurance Company plc., trading as Bank of Ireland Life is regulated by the Central Bank of Ireland. Member of Bank of Ireland Group.
Advice on Bank of Ireland Life products is provided by Bank of Ireland, trading as Bank of Ireland Insurance & Investments. Bank of Ireland trading as Bank of Ireland Insurance & Investments is regulated by the Central Bank of Ireland.
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