Tax relief on your pension contributions
You are entitled to claim generous tax relief on payments into your pension plan. If you are a higher rate taxpayer, for every €1 you save, you can claim back up to 40% in tax relief*.
If you make an overall monthly contribution of €100, this means it will actually only cost you €60 after tax relief. If you pay tax at the standard rate, you can benefit from 20% tax relief.
Tax free growth
Unlike other savings plans, any growth on the investment of your pension contributions is not subject to tax. You pay DIRT of 41% on any interest earned on bank accounts and exit tax of 41% on any gains made on most investments. You pay 0% tax on any growth within your retirement fund.
Up to €200,000 as a tax free retirement lump sum
On reaching retirement, you may be able to take part of your retirement fund tax free, subject to a limit of €200,000**. Even where the retirement lump sum is greater than €200,000, the next €300,000 is only taxed at the standard rate (currently 20%). This very attractive benefit is not available on any other savings plan!
Possibility of a tax free regular income in retirement
You may be able to take a regular income in retirement, without paying income tax. This exemption from income tax is subject to a maximum drawdown of €18,000 a year for a single person or €36,000 for a married couple under current income tax rules.
An Advisor in your Bank of Ireland branch can help you put a plan in place that helps you make the most of the tax advantages available to you. Please note other levies and charges may apply.