Friends First have released their national pensions survey results (available here). One of the results was that 40% of people do not understand the tax relief benefits associated with a pension. It is therefore worth re-iterating the pension tax relief benefits currently in place.
- Tax relief is available on contributions at the marginal tax rate on contributions subject to thresholds/ conditions.
-An Executive Pension Plan allows you to provide for your pension fund independently of the company’s assets and its future profitability. It is designed specifically to take full advantage of the generous tax relief that is granted to company pension arrangements.
- Tax free lump sum drawn on retirement (25% of fund or up to 1.5 times final salary in respect of occupational pension schemes).
-Ability to draw down your pension after retirement as required (for Personal Pensions, Executive Pensions and PRSA’s) giving you flexibility. Currently with occupational pension schemes an annuity is required to be purchased.
For as little as €212* per month you could accumulate a fund of circa €1.5 million by retirement
*Assumes 6% growth. For a 25 year old male. Retirement age of 65. Tax relief at marginal rate for entire contribution. 5% premium escalation.
SmartQuotes.ie have a pension calculator at http://smartquotes.ie/pensions/ and can arrange for a no obligation review with one of our team to discuss pension options.
More details on pensions are available from the Pensions Board here.